WASHINGTON -- A federal appeals court ruled Friday that the Bush administration didn't adequately study the environmental impact of expanding oil and gas drilling off the Alaska coast, a finding that many of Alaska's leaders reacted to with dismay.

Halting leasing in the Beaufort, Bering and Chukchi seas will "cause a further delay in the development of the oil and gas resources that America still requires to fuel its economy," said Sen. Lisa Murkowski, R-Alaska, the top Republican on the Senate Energy and Natural Resources Committee.

"Alaska's outer continental shelf is America's energy storehouse and it needs to be developed with sensitivity to climate change and marine life," Murkowski said, "but I am troubled that the groups behind this litigation are engaging in the too-familiar tactic of suing on every possible issue, no matter the legal merits."

But many environmental and fishing groups said Friday they're relieved by the ruling, especially because of the unknown environmental consequences of drilling in the fishing waters of Bristol Bay.

"A permanent solution is ultimately needed that places the region's water off limits for good," said Kelly Harrell of the Alaska Marine Conservation Council. "We hope Congress will capitalize on the removal of the immediate threat of leasing and get to work on that solution."

The appellate court in Washington on Friday found that the Bush-era Interior Department failed to consider the effect on the environment and marine life before it began in 2005 to expand an oil and gas leasing program in the Beaufort, Bering, and Chukchi seas.

The appeals court ordered the Interior Department, now run by President Barack Obama's appointee Ken Salazar, to analyze the areas to determine environmental risks and potential damage before moving ahead.

The effect likely will be to postpone, possibly by years, oil and gas exploration in federal waters off Alaska's northern coast.

CLASH OF VALUES

Shell, Conoco Phillips and other oil companies last year paid more than $2 billion for leases in the Chukchi Sea off the northwest coast. The companies, and state officials, believe offshore waters hold gigantic reservoirs of oil and natural gas that could energize Alaska economy in coming decades.

But Natives along the northern coast worry that noisy oil development, and hard-to-cleanup oil spills in icy water, could chase away bowhead whales and other subsistence foods. And salmon fishermen in Bristol Bay fret that drilling in nearby waters could disrupt the flow of sockeye into their nets.

The village of Point Hope and three environmental groups brought the lawsuit. The court rejected most of their claims but upheld their argument that the Interior Department's environmental analysis was weak.

The department issued a statement Friday saying that Salazar is reviewing the court decision.

One of Salazar's first acts as Interior secretary this year was to delay scheduling future offshore lease sales nationwide; Salazar visited Anchorage and Dillingham this week to hear from the public on future leasing.

One environmental advocacy group on Friday urged Salazar to use the court ruling as a springboard for comprehensive energy and conservation planning in the Arctic.

"Secretary Salazar has the opportunity and perhaps an obligation to cease all oil and gas activity related to this plan, and instead develop a precautionary, science-based, comprehensive conservation and energy plan for the Arctic Ocean," said Jim Ayers, vice president of Oceana.

A spokesman for Shell Oil did not return a call seeking the company's comment.

Although the North Slope Borough is not a party to the lawsuit, it has long opposed offshore oil development in the Arctic.

"If they're intent on allowing offshore development, they need to really analyze the impact of development on the marine mammals that sustain us, as well as their habitat," said Edward Itta, borough mayor, of the federal agency. "Instead, MMS prefers to ignore risks to our marine mammals."

The American Petroleum Institute, the industry's trade association which joined the lawsuit to defend the leasing program, said Friday it's reviewing the implications.

"It would be a disservice to all Americans -- and a devastating blow to the economy -- if this decision were to delay further the development of vital oil and natural gas resources," the organization said. "Development in federal waters off the nation's coast provides thousands of well-paying jobs, government revenues and the fuel needed to run America's cars and factories, heat our homes and the feedstock needed to make the materials we use every day."

NEW RULES FOR OIL FIRMS

It is "yet another disappointing decision as led by the extreme environmental groups looking to exploit the Alaskan people for their own gain," said Rep. Don Young, R-Alaska. "They would rather have the United States receive handouts from Hugo Chavez than from its own country."

Sen. Mark Begich, D-Alaska, called the ruling "a huge setback for Alaska" and blamed the decision on the Bush administration for rushing oil and gas leasing. "We will continue working with the Obama administration and the Interior Department to show the careful balance that must be achieved to prevent litigation and achieve positive results for the oil and gas industry in our state, to continue to produce good-paying jobs, and to achieve energy independence for our country," Begich said.

Gov. Sarah Palin also objected to the ruling. "Ironically, putting the brakes on domestic energy production does not prevent global warming or threats to species, but actually increases the problem by shifting resource extraction to less environmentally preferred fuels and locations." Joseph Stanislaw, an independent senior adviser to Deloitte LLP, said it's becoming increasingly clear the rules are changing for oil and gas production under the Obama administration -- changes that are likely to add time and cost to many drilling projects.

Obama's priorities, Stanislaw said, place the environment and climate change ahead of energy security and domestic oil and gas supplies.