ANCHORAGE, Alaska - A roadblock to petroleum drilling off Alaska's northwest coast was removed Thursday by the federal agency that oversees lease sales.

The Interior Department said the federal Bureau of Ocean Energy Management has corrected flaws in an environmental review that was successfully challenged in court by environmental and Alaska Native groups.

Resolution of the lawsuit was necessary before Royal Dutch Shell PLC, which drilled in the Chukchi in 2012, could return to its leases in 2015. Shell has filed a 2015 drill plan that calls for two vessels to drill during the short summer open water season but has said a decision to move forward will depend on getting permits and legal clearance.

In the announcement, Interior Secretary Sally Jewell said the Chukchi has substantial oil and gas potential as well as sensitive marine and coastal resources used by Alaska Native communities for subsistence hunting and harvests. BOEM's revised environmental review is a major step toward resolving the 2008 oil and gas leases that have been tied up in the courts for years, she said.

Shell was the leading bidder in the 2008 sale, spending $2.1 billion on Chukchi leases.

However, environmental and Alaska Native groups successfully sued, claiming the former Minerals Management Service based its environmental review of the sale on projected extraction of 1 billion barrels of oil. The groups said development was likely to be far more widespread and the 9th Circuit Court of Appeals agreed.

A supplemental review released for public comment in November assumed an extraction of 4.3 billion barrels over the life of the leases and far greater potential impacts.

Leases were suspended after the court decision. The agency has to wait until 30 days after the revised environmental review is published before it can make a final affirmation of the sale. Environmental groups could sue the agency over future Chukchi Sea drilling decisions.

Environmental groups bitterly oppose Arctic offshore drilling and say oil companies have not proven they can clean up a spill in remote waters.

Jewell last month removed five Arctic Ocean areas from consideration for future lease sales, including Hanna Shoal in the Chukchi, where ice floes linger late into the summer and clams and marine worms thrive, attracting walrus.

Mike LeVine, an attorney for Oceana, said the Obama administration appears to take "take one step forward and two steps back" in Arctic waters.

Shell drilling in 2012 faced significant challenges and the company was not allowed to drill into oil-bearing deposits.

A Shell drill barge used in the Beaufort Sea, the Kulluk, broke free as it was being towed across the Gulf of Alaska and ran aground in December 2012 off a small island near Kodiak. In December, Shell's contractor in the Chukchi, Noble Drilling U.S. LLC, was convicted of eight felony environmental and maritime crimes and was fined $12.2 million.

 

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