CALGARY - Environmental groups are calling the regulatory review process broken after a judge decided against revisiting the approval of two Shell Canada Ltd. oilsands projects.

The Oil Sands Environmental Coalition -- made up of the Pembina Institute, the Toxics Watch Society of Alberta and the Fort McMurray Environmental Association -- wanted to appeal a regulator's decision to uphold its approval of the developments.

The Alberta Court of Appeals ruled Thursday that it would not hear the challenge to the Energy Resources Conservation Board's approval of Shell's Jackpine and Muskeg River mine expansions.

The regulator encourages industry and stakeholder groups to hold their own two-way discussions in order to make the regulatory hearing process run more smoothly, said Dan Woynillowicz, with the Pembina Institute.

Talks between OSEC and Shell led to a written agreement, in which Shell agreed to cap its greenhouse gas emissions at the two oilsands mines.

"Those were submitted to the ERCB and the federal government. Both of those projects went through joint review panels, and then as a result OSEC did not present any evidence or take any issue with Shell's greenhouse gas performance," Woynillowicz said.

However, he said it became apparent to the environmental groups that Shell would not agree to cap its emissions, so they asked the provincial regulator and the federal government to re-examine the approval.

The regulators did not agree, so the coalition took asked the court for a leave of appeal, which was denied Thursday.

"What this whole experience that we've gone through, and that ultimately this most recent legal decision has made clear, is that those agreements don't actually have any real value," Woynillowicz said.

"And as a result, certainly from our perspective, it calls into question the merits of engaging in those types of discussions and agreements with companies."

He said it could "throw the whole system on its head" because it means stakeholders may have to resort to more confrontational approaches if they want to have their voices heard.

"Companies can write down whatever they want, commit to whatever they want, put their name and signature to it and the ERCB and the federal government are not actually going to hold them to it," Woynillowicz said.

Shell was pleased with the ruling and said its compliance with carbon dioxide emissions regulations "fulfills the spirit and intent of our agreements with OSEC to reduce CO2 from the oilsands," John Abbott, Shell's executive-vice-president of Heavy Oil, said in a statement.

"We have not and will not set voluntary targets for future oilsands projects because current and emerging regulations will drive us to reduce or offset (greenhouse gas emissions) from oilsands production to a level on par with competing crude oil alternatives. That's our goal."

Shell said it complies with environmental regulations and is in favour of a cap and trade emissions policy.

It said it has met with environmental groups on several occasions.

"We understand and share the concerns of stakeholders on greenhouse gas emissions from oilsands and that is why we allocate significant human and financial resources to addressing our (greenhouse gas) performance and advocating for a level playing field and real climate solutions," Abbott said.

"We want to work with stakeholders on ways to strengthen CO2 and other environmental policies and welcome thoughtful debate on this critical issue."