A three-judge panel of the 9th U.S. Circuit Court of Appeals on Thursday affirmed a lower court decision that said the federal Minerals Management Service properly conducted Lease Sale 202.
State officials immediately praised the ruling.
"This is good news for the state of Alaska," said Gov. Sean Parnell. "Outer Continental Shelf development is critical to the state's long-term economic future."
U.S. Sen. Lisa Murkowski, R-Alaska, said the decision was good news for the nation's energy security and will allow Shell Alaska to move forward with plans to drill up to two exploration wells on its Beaufort leases next year.
The lawsuit was brought by the North Slope Borough, the municipal government that covers more than 15 percent of the state, including northernmost Alaska. The other plaintiff was the Alaska Eskimo Whaling Commission, representing North Slope whaling communities.
They claimed that an environmental review completed in 2003 for three proposed lease sales was inadequate for the 2007 sale and that a supplemental review should have been performed.
The borough and the whaling commission claimed increased industry activities should have been taken into account, including how polar bears and wildlife needed for subsistence hunting are affected by oil industry seismic testing and potentially significant cumulative impacts from seismic testing and climate change. Seismic testing involves blasting sound waves into the ocean floor to map the underground geology, hoping to find formations that might have trapped oil and gas.
The Minerals Management Service (MMS) argued that a supplement to the 2003 review was unnecessary because no significant new information or circumstances relevant to the sale had been identified.
In their four-page ruling, the appeals judges said the plaintiffs failed to identify any specific new information to show the lease sale would have a significant impact on Arctic wildlife.
The 2007 sale resulted in 90 leases covering 490,700 acres, or about 768 square miles, for $42 million.
Shell, the major leaseholder in the Beaufort Sea, was not a part of the lawsuit. Spokesman Curtis Smith said the company was pleased that the court acknowledged the completeness of the process that had made the lease sale possible. He confirmed the company expects to drill next year.
Shell also holds leases in the Chukchi Sea off Alaska's northwest coast, where a Washington, D.C., appeals court ruled in April that the MMS under the Bush administration did not properly study the environmental effect of expanding oil and gas drilling on the environment and marine life. That lawsuit was brought by three environmental groups and the village of Point Hope.
The Anchorage Daily News/adn.com contributed to this article.
Important warning about e-mails purporting to be from the adn.com staff.