When Shell’s prior plans to drill for oil in the Arctic Ocean were challenged by various groups concerned about the impact on the environment and marine life in the region resulting in a lawsuit and a court order for the company to stop drilling, Shell immediately appealed the decision. The big oil company also started working on a revised drilling plan. The original drilling plan was given the go ahead by the Bush administration without the benefit of a full environmental review and was immediately challenged.

The main concern of the groups that were opposed to the drilling plan was this lack of a full environmental review and the fact that the drilling was going to take place in close proximity to the Arctic National Wildlife Refuge.

Earlier this week the U.S. Court of Appeals for the Ninth Circuit dismissed the case when Shell Offshore, Inc. decided to withdraw their drilling plans.

Even though Shell had reduced its drilling plan to one year and planned on having only a single rig rather than the original two planned and had scaled back to two wells instead of a dozen, Native and environmental groups were still concerned.

Shell’s revised drilling plans were not seen as being much of an improvement over the original ones. The company was planning to commence drilling in 2010 in the Beaufort Sea and also the Chukchi Sea, both areas that are major habitats for the endangered bowhead whale. If fact, the new “revised” drilling plan wasn’t seen an improvement over the original plan at all and would still include placing wells offshore next to the Arctic National Wildlife Refuse along with new plans to drill straight through the middle of the bowhead’s migration corridor and indigenous hunting grounds.

And while Shell may have been concerned over the continued backlash to its drilling plans, the decision to withdraw was ultimately about money.

In a speech given on Tuesday to the Resource Development Council for Alaska, Shell’s executive vice president for exploration, David Lawrence, expressed the company’s growing frustration with the mounting cost of a project that has yet to see any returns.

“We didn’t go into the fact that reducing our drilling program would eventually cost Shell tens of millions of dollars,” Lawrence said. “Shell to date has spent $3 billion in Alaska. And to date, we have no monetary return to show for it.”