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Shell's Alabama Offshore Drilling Plans Challenged In Court

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ATLANTA -- Environmental groups urged an appeals court on Wednesday to block Shell from drilling 10 new deep-water wells off Alabama's coast, arguing that federal regulators haven't properly reviewed the risks of undersea drilling in the aftermath of the 2010 Gulf of Mexico spill.

The coalition of green groups told the 11th U.S. Circuit Court of Appeals that federal regulators merely "rubber-stamped" Shell's plans to drill the wells in the same canyon where the blowout of BP's Macondo well triggered an explosion that killed 11 rig workers and unleashed a gusher that spewed more than 200 million gallons of oil into the Gulf. Netherlands-based Shell is a subsidiary of UK-based Royal Dutch Shell PLC.

It claims the government approved Shell's plans to dig wells in waters 2,000 feet deeper than BP's well after a 30-day cursory review, and that regulators ignored the potential damage the new wells could have on vulnerable aquatic wildlife.

"The Bureau of Ocean Energy Management was essentially rubber stamping plans with no adequate environmental review, and the commission that reviewed that accident noted that as a leading cause in that accident," said Catherine Wannamaker, an attorney with the Southern Environmental Law Center. "We're back to the same old, same old two years later."

Government attorneys say the permits were thoroughly vetted and environmentally sound. And Shell's lawyers argued that new government safety regulations put in place after the oil spill have led to vast improvements in the permitting process designed to prevent another blowout.

"Nothing can be said to never happen again," said Chilton Varner, a Shell attorney. "But these new regulations represent enormous improvements."

Shell's plan was submitted to federal regulators in October 2010 and approved last May, one of the first deep undersea oil wells to be permitted in the Gulf after the BP spill.

Regulators concluded that the wells would not significantly affect the environment, but the environmental groups say the risk analysis is based on outdated historical data and a policy that was found to be flawed after the spill.

Attorney Monica Reimer of the Gulf Restoration Network compared the federal review to a doctor who assessed the risks of a 50-year-old man purely by looking at historical data – and not actually screening the patient.

"We have evidence the government has failed to look at fundamental risk factors in drilling in the ocean," she said.

Federal regulators, though, said in court filings they took a "hard look" at Shell's application and delved into environmental impacts even though a catastrophic spill was deemed very unlikely. After the thorough review, regulators found that the spill wouldn't significantly affect the environment, said Michael Thomas Gray, an attorney for the Bureau of Ocean Energy Management.

"We've adopted new safety measures and there's an increased awareness in the industry," he said. "This is a low probability event."

After BP's oil spill, the White House imposed a six-month moratorium on deep-water oil drilling in the Gulf of Mexico. It was lifted in October 2010 under heavy pressure from the oil industry and Republicans and Democrats from Gulf states where thousands of jobs were affected by the ban.

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