Alaska coastal oil drilling challenge revived by court

|By:, SA News Editor

Alaskan coastal drilling by oil companies including ConocoPhillips (COP) and Royal Dutch Shell (RDS.A, RDS.B) may be further delayed after a court revived a challenge by environmental groups claiming the government violated existing laws in opening acreage on the continental shelf to energy exploration.

Sierra Club and other groups sued the government after the $2.6B sale of development leases for the Chukchi Sea off Alaska's coast in 2008, saying the amount of oil from the leases was far higher than the 1B barrels the U.S. Interior Department had estimated in an environmental review.

In a decision that reversed a judge's 2012 ruling dismissing the lawsuit, the U.S. Court of Appeals in San Francisco today concluded the estimate was “chosen arbitrarily,” and the government “based its decision on inadequate information about the amount of oil to be produced pursuant to the lease sale.”