Judge: Fed regulators botched Alaska offshore lease sale

A federal appeals court has ruled that federal regulators conducted inadequate environmental studies before selling $2.7 billion in petroleum leases off Alaska's northwest coast.

The decision could affect leases acquired in 2008 by Royal Dutch Shell in the Chukchi Sea. The company is considering additional exploratory drilling there this year.

A three-member panel of the 9th Circuit Court of Appeals ruled in a split decision Wednesday that federal regulators prepared an environmental assessment based on recovery of just one billion barrels of oil.

Environmental groups said development was likely to be far more widespread in the Chukchi, home to polar bears, walrus, ice seals and endangered whales.

Appeals Court judges agreed and said the environmental assessment should have been based on a full range of likely production.