Auction for Oil & Gas Leases in Alaska Arctic Refuge Draws Little Interest
Arctic National Wildlife Refuge by Zodiac in Demarcation Bay in Alaska. (Source: Danielle Brigida, U.S. Fish and Wildlife Service)
Just two weeks before leaving office the Trump administration proceeded with a controversial lease sale of drilling rights in Alaska’s Arctic National Wildlife Refuge (ANWR).
On Wednesday the Bureau of Land Management received 13 bids for 11 tracts totaling 552,802 acres in the Coastal Plain of Alaska’s Arctic National Wildlife Refuge (ANWR).
The sale constitutes a last minute effort by the Trump administration to open up the previously protected wildlife refuge to oil drilling and is the first auction of oil and gas leases in ANWR.
Interest in the lease sale was very limited, raising only $14.4 million. The BLM received bids for only 11 out of 22 available tracts seemingly affirming that expectations of Alaska state officials and the Trump administration to raise billions of dollars of revenue from auctions are unrealistic.
Wednesday’s auction proceeds fall far short of the up to $1.8bn in total revenue calculated by the Trump administration. Other estimates for revenue from ANWR leases sales were as high as $4-6bn as recently as 2014.
Efforts to open up ANWR, which go back several decades, picked up steam in 2017 when Alaska Senator Lisa Murkowski managed to place a provision into the bill on the 2017 tax cuts requiring two leases sales in 2021 and 2024.
Oil Majors Pass on Auction
International oil and gas majors did not participate in the auction and the largest bidder was the Alaska Industrial Development and Export Authority (AIDEA) submitting the highest bid for nine out of 11 tracts. Since AIDEA is a public corporation of the State of Alaska, the state defacto participated in and bid on its own lease sale.
“Instead of the federal treasury and the state of Alaska making billions, today the state of Alaska had to spend money to make an Arctic Refuge lease sale happen,” explains the Alaska Wilderness League in a statement.
Despite the lack of interest Alaska officials praised the auction as a milestone in securing the state’s future in oil and gas development and a commitment to the industry.
“Today is a great day and the result of many Alaskans’ tireless efforts over the course of decades. The first lease sale in the non-wilderness 1002 Area did not occur under ideal conditions, but it will benefit Alaskans both in the short-term and well into the future,” said Senator Lisa Murkowski.
Murkowski’s statement was echoed by Alaska’s other Senator, Don Sullivan: “Today is a momentous and historic day for all Alaskans. After forty years and extensive congressional and administrative consideration, we have finally achieved a lease sale for the 1002 Area of ANWR as Congress mandated in 2017.”
Rush to open ANWR before Biden takes office
The sale is, for now, the culmination of decades of political and legal battles. The outgoing Trump administration will likely attempt to review and finalize the bids, a process that traditionally takes up to a year, in the next 14 days before President-elect Biden, who opposes the opening of ANWR, takes office.
Environmental groups remain harshly critical of the attempt to open up ANWR, one of the largest undamaged, intact ecosystems left on the planet.
“This lease sale was an epic failure for the Trump administration and the Alaska congressional delegation. After years of promising a revenue and jobs bonanza, they ended up throwing a party for themselves, with the state being one of the only bidders. We have long known that the American people don’t want drilling in the Arctic Refuge, the Gwich’in people don’t want it, and now we know the oil industry doesn’t want it either,” explained Adam Kolton, executive director of the Alaska Wilderness League, in a statement.
Less than a day before the auction a U.S. District Court struck down a restraining order and injunction filed by environmental activists and Alaska Native groups aiming to halt the sale. Efforts to open up ANWR will continue to face a host of legal challenges before any development or drilling activity would occur, Kolton confirms.
“Ultimately, we believe the courts will find the Trump administration’s Arctic Refuge drilling scheme to be illegal, violating bedrock environmental laws and ignoring its responsibility to protect the food security of Indigenous peoples and the refuge’s irreplaceable wildlife and wilderness values.”