Alaska senators and Royal Dutch Shell PLC yesterday said foot-dragging by U.S. EPA on needed permits caused the company to cancel plans to drill for oil in the Arctic this year.

Shell yesterday announced it was postponing its plans to drill a well in the Beaufort Sea this summer, citing uncertainty over whether it would receive a Clean Air Act permit from EPA in time for Alaska's short drilling season.

"The recent remand of [EPA's] air permits was the final driver behind the decision to stop continued investment towards a 2011 drilling program," said Pete Slaiby, vice president of Shell Alaska. "Losing any season is like gold falling out of your hand."

While uncertainty lingered over the EPA permit, Slaiby said he was optimistic Shell would soon get a drilling permit from Interior's Bureau of Ocean Energy Management, Regulation and Enforcement and that prospects for drilling in 2012 remained bright.

"We do feel largely positive that there is an understanding that Alaska offshore will play a role in the U.S. energy future," he said. But "as much as you can like your prospects, you can't love your prospects until you drill them."

The delay is expected to cost about 800 jobs, Slaiby said, and will postpone exploration of what is believed to be the nation's second largest oil and gas reserve behind the Gulf of Mexico.

Alaska's lawmakers yesterday took aim at EPA for delaying access to what federal scientists say are 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

"The EPA's refusal, or simple inability, to issue key permits in a timely fashion is indefensible," said Sen. Lisa Murkowski (R-Alaska), in a statement. "Shell has now invested roughly $4 billion and five years attempting to get the permits it needs, without success."

Sen. Mark Begich (D-Alaska), who had said he was optimistic about the pending permit after leaving a meeting last week with EPA's Region 10 administrator, yesterday said the decision will cost not only jobs, but millions of dollars in needed contracting during a sluggish economy.

"I put the blame for this squarely on the EPA and the Obama administration who have taken virtually every opportunity to block responsible development of Alaska's resources," Begich said in a statement. "Their foot dragging means the loss of another exploration season in Alaska."

But environmental groups said the decision to postpone drilling removed artificial pressure for the federal government to approve Shell's plans and prevents an unacceptable risk to Arctic wildlife and human safety.

Athan Manuel, lands protection program director at the Sierra Club, said the BP PLC oil spill in the Gulf of Mexico is a stark reminder of the risks of drilling in frigid Arctic waters.

"In the uncharted and largely unknown conditions of the Arctic and with limited capacity to respond to spills in harsh conditions, the Arctic should not be an option for corporate polluters who are already reaping in massive profits," he said in a statement. "The cold truth is there is no way to clean up an Arctic spill."

Brendan Cummings, senior counsel at the Center for Biological Diversity, said yesterday's announcement marks the third time that Shell's plans to drill in the Beaufort have been halted.

"The polar bear and other wildlife of Alaska's Arctic, as well as the local communities that depend upon a healthy ocean, were granted a well-deserved reprieve today," he said. "The Department of the Interior needs to turn that short-term reprieve into permanent protection of America's Arctic."