Environmental groups sue Port of Seattle over Shell oil fleet

SEATTLE, March 2 (Reuters) - A coalition of environmental groups sued the Port of Seattle on Monday to stop the lease of a terminal to Royal Dutch Shell Plc (Xetra: R6C1.DE - news) 's Arctic oil drilling fleet, arguing a proper environmental review was never conducted, court records showed.

Earthjustice, along with other groups including the Sierra Club, filed the suit in a Washington state court, alleging the drilling operation was substantially different from the terminal's prior use, meaning an environmental review had to be done under state law.

The complaint against the port and Foss Maritime Co, which would work for Shell (LSE: RDSB.L - news) under the two-year lease, also alleged that officials reached the arrangement without public disclosure and that the fleet could pollute the area's water.

"The Port shut out the public and subverted laws that are designed to foster an informed public assessment of controversial proposals like this one," Earthjustice Managing Attorney Patti Goldman said in a statement.

Shell, Europe's largest energy firm, is intent on restarting its Arctic drilling campaign in Alaska's Chukchi Sea this summer. It was suspended in early 2013 following the grounding of a drilling rig.

"We have received a shoreline substantial development permit exemption from the City of Seattle for this use," Port of Seattle spokesman Peter McGraw said in a statement, adding that officials had not yet reviewed the suit.

"The Port of Seattle believes it has complied with all necessary environmental requirements," McGraw said.

Foss did not immediately respond to request for comment but company spokesman Paul Queary told the Puget Sound Business Journal that activity at the terminal would actually decline under the plan.

Late last year, drilling contractor Noble Corp Plc paid $12.2 million to settle felony charges by the U.S. Department of Justice related to safety, environmental and record keeping violations on vessels in Arctic waters in 2012 while working as a contractor for Shell. (Reporting by Eric M. Johnson in Seattle; Writing by Curtis Skinner; Editing by David Holmes)