Judge freezes Arctic drilling

BP's huge oil spill is affecting Arctic oil and gas exploration in one of the first signs the accident is having repercussions far beyond the Gulf of Mexico.

BP's huge oil spill is affecting Arctic oil and gas drilling in one of the first signs the accident is having repercussions far beyond the Gulf of Mexico. On Wednesday, a judge in Anchorage, Alaska, ordered a halt to drilling in the Chukchi Sea off the north-western coast of the US state, pending a federal environmental impact review.

The district court judge Ralph Beistline said the US Minerals Management Service, which was recently reorganised and renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, failed to abide by federal environmental law when it sold US$2.66 billion (Dh9.76bn) of Chukchi leases two years ago, mostly to Royal Dutch Shell. He ordered the bureau to complete a more thorough evaluation before he would allow the work to resume.

The lease sale "was the product of the same broken system that led to poor oversight of BP's drilling operations", said Michael Brune, the executive director of the Sierra Club, a powerful US environmental group that was one of the plaintiffs in the case. "The past few months have taught us all a painful lesson about the risks of offshore drilling. "An oil spill in the Arctic's broken sea ice would be impossible to respond to. A spill would be the nail in the coffin for Arctic communities and wildlife like polar bears, which are already struggling to survive. And where there is offshore drilling, there are oil spills," he added.

A Shell spokesman said the company was still analysing the ruling and how it might affect operations and drilling plans. Oil production in Alaska also causes problems onshore. Yesterday, Alaska environment officials said about 2,400 litres of oil had leaked from a buried pipeline operated by the US oil company Chevron. The leak was discovered in the Kenai National Wildlife Refuge south of Anchorage.

In May, the Trans-Alaska Pipeline, which is 51 per cent owned by BP, was temporarily shut down after spilling thousands of litres of crude into back-up containers. While those two spills may have inflicted minimal environmental damage, BP was fined $20 million for spilling 6,350 barrels of crude pumped from Prudhoe Bay, off Alaska's north shore, on to the tundra in 2006. The oil contaminated a lake.

This month, BP's Alaska unit said it would probably delay development of an offshore field because of federal and state plans to review the project. "If the government seeks additional review of the project we will, of course, co-operate," said Steve Rinehart, a spokesman for the unit. "While we had hoped to begin drilling the first oil well by the end of this year, it has become clear it will likely be next year before we begin. We will take our time and work safely."

Elsewhere, the UK oil company Cairn Energy has attracted criticism over a decision to start drilling exploration wells in a stretch of ocean between Greenland and Canada dubbed "Iceberg Alley". The area is close to where the Titanic was sunk by an iceberg in 1912. "We think it is completely irresponsible for Cairn to proceed with these operations when the US, Canada and Norway have imposed tough new restrictions on deepwater drilling until lessons can be learnt about what exactly went wrong in the Gulf," said Mads Flarup Christensen, the secretary general of the environmental group Greenpeace Nordic.

Yesterday, The Washington Post reported Shell and the three biggest US oil companies, ExxonMobil, Chevron and ConocoPhillips, would spend $1bn to design, manufacture and store equipment to respond to Gulf of Mexico spills under a plan to reassure worried members of the US Congress about future drilling. @Email:[e-mail]