California Exploration Halted

A Federal judge halted all oil and natural gas exploration off the California coast, a blow to oil companies hoping to continue drilling operations after years of legal wrangling.

U.S. District Court Judge Claudia Wilken ruled that offshore blocks leased by oil companies could not be explored or drilled pending a full environmental review and approval by the California Coastal Commission, according to Reuters.

Government estimates show the leases, near Santa Barbara, could hold 1 billion barrels oil. The area's possible reserves of natural gas have also been growing increasingly attractive to energy companies as prices soar due to California's unfolding power crisis. Companies holding the leases include Exxon Mobil Corp., Shell Oil Co. and Conoco Inc.

Wilken's order further delays the possible resumption of drilling for new oil or natural gas deposits off California's coast, which has been halted since 1989. In 1999, then Interior Secretary Bruce Babbitt extended approximately 36 offshore leases while ordering a review of their impact on the environment.

The tracts were exempt from the Clinton administration's 1998 ban on new oil drilling because the leases were so old, some dating back to 1979. California's governor and attorney general, as well as the California Coastal Commission, filed a lawsuit against the department, saying the state had been illegally denied the right to review the leases for environmental issues before any action at the federal level, the report said.

While the state's suit did not explicitly seek cancellation of the leases, Davis has expressed reservations about offshore oil drilling and environmental groups have loudly condemned any move which could threaten the state's famous coastline.

Environmentalists have also argued that the Interior Department should scrap the leases, which cost oil companies more than $1 billion when they were granted 25 to 30 years ago.
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