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Offshore Arctic Drilling Project Cleared By Court

(This post was revised to correct the statement that the 9th Circuit decision cleared the way for the exploratory drilling. It allows the process to move forward which means Shell will still need permits.)

A federal appeals court removed an obstacle Thursday from Shell Oil's path towards drilling exploratory offshore wells along Alaska's coast later this year.

Coming as it does as BP's underwater oil gusher continued to flow unchecked in the Gulf of Mexico following an explosion and fire on the Deepwater Horizon rig, the decision by the Court of Appeals for the Ninth Circuit was likely to draw considerably more attention than it would have a month ago.

NPRs' Jeff Brady tells me Interior Secretary Ken Salazar's office says: "Shell still must get approval for its applications for permits to drill. A decision on that won't be made until the current safety review is completed by May 28th."

An excerpt from the Associated Press:

A three-judge panel of the 9th U.S. Circuit Court of Appeals rejected a case that challenged federal approval of Shell's exploratory drilling plans in the Chukchi and Beaufort seas.

The expedited ruling followed oral arguments last week in Portland, Ore.

The court determined that the federal Minerals Management Service met its obligations to consider the potential threat to wildlife and the risk for disaster before it approved Shell's Arctic Ocean project.

Shell Oil, a unit of Royal Dutch Shell PLC, hopes to drill three exploratory wells in the Chukchi and two in the Beaufort this summer with a 514-foot drilling ship, the Frontier Discoverer.

Chris Krenz, Arctic project manager for Oceana, one of the plaintiffs, said the decision was disappointing in light of the ongoing BP crude oil spill in the Gulf of Mexico.

"Oil companies have tapped the easy oil off of our coasts," he said. "They are now pushing the limits and increasing the risk by heading to the deep water of the gulf and the remote and unforgiving Arctic."

He said BP was not ready to deal with an oil spill tragedy in the gulf, and "Shell will have far fewer resources to contain and address an accident in the Arctic."

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