Washington (Platts)--14May2008

In a move that could lead to restrictions on oil and gas development in
waters off Alaska, the US government on Wednesday designated the polar bear a
"threatened" species under the Endangered Species Act.

Under the decision, the polar bear's habitat, which includes the
energy-rich Chukchi Sea, could receive protection. For oil and gas companies,
the designation could mean anything from the need to take additional measure
to ensure bears' safety to outright restrictions on development.

The decision to list the bear comes after the Department of Interior
delayed a ruling for months. Under legal pressure, the department in January
2007 said it would make a decision in January 2008. It then extended that
deadline, saying it needed more time to deal with the more than 600,000 public
comments it had received.

The delay allowed a $2.66-billion oil and gas lease sale to take place on
30 million acres of Alaska's Chukchi Sea without conducting additional
environmental reviews an endangered species designation would have required.

Threats to the polar bear are largely based on long-term predictions that
sea ice will decline because of global warming. Polar bears use sea ice to
move around the region and for hunting, and without enough of it, the animals
could starve or drown.

Last year a US Geological Survey report found that a predicted loss of
Arctic sea ice could reduce the global polar bear population two-thirds by
2050.

Critics, however, argue that those sea ice predictions are based on
unreliable computer models and that the polar bear decision is being used as a
backdoor way to regulate climate change. By listing the bear as endangered,
they say, it would force the Fish and Wildlife Service, which oversees
Endangered Species Act decisions, to actively enforce limits on greenhouse gas
emissions.

Interior's delay in making a decision on the bear has led to a series of
lawsuits and the introduction of several bills in Congress designed to force a
decision. Most recently a coalition of environmental groups sued Interior to
make a decision, and a federal judge ordered that Interior must comply by May
15.

--Derek Sands, derek_sands@platts.com