(CN) - Shell's plans to handle oil spills off the coast of Alaska merit an en banc rehearing before the Ninth Circuit, several judges warned Tuesday, saying the court set "dangerous precedent" in June.
It was in June that the Ninth Circuit upheld Shell's oil-response plans for spills off the coast of Alaska, finding nothing arbitrary in the approval that plans won from the Bureau of Safety and Environmental Enforcement.
Alaska Wilderness League and eight others had challenged the spill-response plan, contending that Shell was unrealistic in claiming that it would achieve a mechanical recovery of 90 percent to 95 percent of any oil spilled in the Arctic.
Though two Ninth Circuit jurists sided with the government, Judge Dorothy Nelson dissented based on her finding that the bureau engaged in agency action that triggered the requirement for a consultation under the Endangered Species Act.
Activists pushed for rehearing, either before the three-judge panel or the full court, but came up short Tuesday, spurring objections by some members of the court.
Joined by Judges William Fletcher and Consuelo Maria Callahan, Judge Ronald Gould accused the June majority of misinterpreting the Clean Water Act as imposing optional duties on companies and thereby neutered the Endangered Species Act.
"The majority's decision in this case encourages federal agencies to abrogate their oversight by deciding that a statute's requirements limit their discretion to the point of taking [the two acts] off the table," Gould wrote.
"The majority invites federal agencies to ignore their ESA and NEPA obligations, await a challenge, and then defend their inaction," Gould added, abbreviating the Endangered Species Act and National Environmental Policy Act.
If the U.S. Supreme Court does not take up the case, the majority's ruling will further preclude judicial review of future oil-spill response plans and send the message to environmental agencies that "we trust you and will rely on your judgment without review by federal agency experts and public input."
Shell has already shelved its plans for offshore drilling in the area, but Gould said the issue is far from over.
"Although the program is on hold, and the administration has recently canceled existing Arctic lease sales, oil markets are cyclical and it is all but certain that higher future oil prices, a warming Arctic, or both will once again make drilling in the Arctic cost-effective," the 20-page dissent states.
Amendments in 1990 to the Clean Water Act required oil companies to prove they could respond "to the maximum extend practicable" to oil spills.
Though the amendments require the government to "promptly review" and then "approve" oil-spill-cleanup proposals from companies, Gould said that the word "shall" in the regulations does not mean agencies "must" approve such plans without discretion over their efficacy.
"By not correcting the majority's holding through en banc rehearing, we have permitted a gross alteration of Supreme Court precedent and given federal agencies unwarranted and unprecedented authority over whether their statutory duties are discretionary or not," Gould wrote.
Though Nelson, the author of the June dissent, did not join Gould's opinion today, she said she would have granted either the panel or en banc rehearing.
The issue represents just one of the hurdles confronting Shell in its years-long effort to develop offshore oil and gas resources in the remote Beaufort and Chukchi seas on Alaska's Arctic coast.
In addition to the lawsuits, Shell exploration efforts have been waylaid by the wreck of one of its drill rigs and the 2010 moratorium on Arctic drilling put in place after the Deepwater Horizon spill.
Some estimate that Shell has spent as much as $7 billion on plans to drill off Alaska's coast, with little oil to show for it.
Audubon Alaska Policy Director Jim Adams had blasted the Obama administration for its "an embarrassing, blinkered rush to rubberstamp Shell's" drilling proposal.
Shell finally scrapped its plans for offshore drilling in the Beaufort and Chukchi seas in September when the initial offshore oil wells came up dry and federal agencies added additional regulatory requirements.
Shell is now fighting with the Obama Administration over whether to renew its Arctic leases.
The Audubon Society has alleged that Shell pressured the Interior Department and other federal agency staffers for drilling approval.
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