Biden administration cancels last leases in Alaska’s Arctic National Wildlife Refuge

By Yereth Rosen, Alaska Beacon - September 7, 2023
Research biologists working on June 26, 2018, pause among the wetlands of the Arctic National Wildlife Refuge coastal plain, with the Brooks Range in the background. The Department of the Interior on Wednesday officially canceled the last seven oil and gas leases in the narrow coastal plain wedged between the mountains and the ocean. (Photo by Lisa Hupp/U.S. Fish and Wildlife Service)

The Biden administration on Wednesday announced it is canceling the last remaining oil and gas leases in the coastal plain of the Arctic National Wildlife Refuge.

Those seven leases, all held by the Alaska Industrial Development and Export Authority and sold in a controversial auction held in the last days of former President Donald Trump’s administration, have been in limbo ever since President Joe Biden was sworn into office.

On his first day, Biden issued an order requiring a hold on Arctic refuge development to allow for further scrutiny of the lease sale and its environmental impacts. On June 1, Deb Haaland, secretary of the Department of the Interior, put the leases into suspended status. Interior soon after launched a formal supplemental environmental impact statement, a thorough review of the lease sale. The sale was held as a requirement of the 2017 Tax Cut and Jobs Act.

Last month, a federal judge upheld the administration’s actions on the refuge leases, rejecting arguments from AIDEA, that it should be allowed to proceed with exploration.

Haaland, in an online news conference, said the lease cancellation protects the refuge’s coastal plain.

“With today’s action, no one will have rights to drill for oil in one of the most sensitive landscapes on earth,” she said.

However, the administration will abide by the provisions of the 2017 tax bill that require a second Arctic refuge lease sale by the end of 2024, according to an administration official.

Interior on Wednesday also announced a proposal for enhanced protections in the National Petroleum Reserve in Alaska, the 23 million-acre land unit on the western part of the North Slope.

Haaland said the new protections are proposed to respond to accelerated climate change in the Arctic and to protect resources important to Indigenous people.

Caribou herd forage in 2019 on vegetation at the ledge of a hill adjacent to the Hulahula River in the Arctic National Wildlife Refuge. (Photo by Alexis Bonogofsky/U.S. Fish and Wildlife Service)
Caribou herd forage in 2019 on vegetation at the ledge of a hill adjacent to the Hulahula River in the Arctic National Wildlife Refuge. (Photo by Alexis Bonogofsky/U.S. Fish and Wildlife Service)

“Climate change is the crisis of our lifetime, and we cannot ignore the disproportionate impact being felt in the Arctic. We must do everything within our control to meet the highest standards of care to protect this fragile ecosystem,” she said.

President Biden, in a statement issued by the White House, characterized the actions as necessary to protect the many “breathtaking natural wonders and culturally significant areas” in Alaska that should be protected from climate change.

“Canceling all remaining oil and gas leases issued under the previous administration in the Arctic Refuge and protecting more than 13 million acres in the Western Arctic will help preserve our Arctic lands and wildlife, while honoring the culture, history, and enduring wisdom of Alaska Natives who have lived on these lands since time immemorial,” Biden said in the statement.

The president said his climate and conservation agenda is the most ambitious in U.S. history.

“But there is more to do, and my administration will continue to take bold action to meet the urgency of the climate crisis and to protect our lands and waters for generations to come,” he said in the statement.

Proposed rules seek to enhance protections in 2013 activity plan

The proposed new rules for the National Petroleum Reserve would strengthen protections for the five “special areas” designated in a former President Barack Obama’s administration plan, known as an Integrated Activity Plan, made final in 2013. That plan, which put about half of the reserve off-limits to oil development, remains in effect, despite a Trump administration attempt to replace it with one that would have opened almost all of the reserve to drilling.

The new protections include a provision for automatic reviews every five years that may consider whether to expand the existing special areas or add new areas. The new protections also include more rules limiting surface impacts of oil development where it is allowed to occur, along with provisions for expanding Tribal participation through co-stewardship arrangements.

The proposed rules, which are subject to a public comment period, do not affect any existing leases within the reserve, a senior Interior official said in a background briefing.

Two animals in the Teshekpuk Caribou Herd are seen on June 27, 2014. The herd uses the area around vast Teshekpuk Lake. The lake and its surroundings are protected as a one of five special areas in the National Petroleum Reserve in Alaska. (Photo by Bob Wick/U.S. Bureau of Land Management)
Two animals in the Teshekpuk Caribou Herd are seen on June 27, 2014. The herd uses the area around vast Teshekpuk Lake. The lake and its surroundings are protected as a one of five special areas in the National Petroleum Reserve in Alaska. (Photo by Bob Wick/U.S. Bureau of Land Management)

Within the National Petroleum Reserve, there are fields already producing oil or in development stages. The biggest is ConocoPhillips’ Willow field, which was approved in March by the Biden administration and which would produce about 600 million barrels of oil. Peak production if Willow is developed is expected to reach up to 180,000 barrels a day. The Biden administration approval has been challenged in court.

Lands on the western side of the North Slope, within the National Petroleum Reserve and on state territory adjacent to it, have drawn keen industry interest in recent years. ConocoPhillips’ plans for development of Willow and Santos’ plans to develop the large Pikka field on state land just outside of the reserve stem from exploration programs launched by federal leasing that started in 1999 under the administration of former President Bill Clinton. The area is underlain by the Nanushuk and Torok formations, oil-containing rock layers that were previously considered too difficult to develop but which now is being developed through advanced drilling technology.

In contrast, the Arctic Refuge has drawn almost no interest from oil companies. AIDEA was the dominant bidder in the 2021 lease sale. Two other bidders each secured a single lease but relinquished them shortly after. Major banks have refused to finance Arctic refuge development, and major insurance companies have refused to write policies for it.

The Biden administration announcement drew swift reactions from groups on both sides of the development debate.

Opponents of Arctic refuge development celebrated it.

“It is nearly impossible to overstate the importance of today’s announcements for Arctic conservation,” Jamie Williams, president of The Wilderness Society, said in a statement.

He called the 2017 tax bill “an underhanded ploy that opened one of the last great wild landscapes in America to destructive development” and produced “a failed lease” that was rushed and careless.

“But today – with positive announcements on both the Arctic Refuge and the Western Arctic – the Biden administration took huge steps to protect vast, beautiful landscapes for future generations. . .Our climate is a bit safer and there is renewed hope for permanently protecting one of the last great wild landscapes in America,” Williams said.

However, one group, the Center for Biological Diversity, said the NPR-A action amounts to “half-measures” because about half of the reserve remains open for development.

An exploration site at ConocoPhillips' Willow prospect is seen from the air in the 2019 winter season. (Photo by Judy Patrick/provided by ConocoPhillips Alaska Inc.)
 An exploration site at ConocoPhillips’ Willow prospect is seen from the air in the 2019 winter season. Willow is located in the National Petroleum Reserve in Alaska. (Photo by Judy Patrick/provided by ConocoPhillips Alaska Inc.)

“Keeping options open for any new oil and gas drilling could lock us into more fossil fuel emissions for decades to come, and we can’t afford that. We have to end all oil drilling in the Arctic if we want to preserve the region and the polar bears, ringed seals and other wildlife already struggling to survive there,” Kristen Monsell, a senior attorney with the Center for Biological Diversity, said in a statement.

Alaska officials plan legal challenges

On the pro-drilling side, Alaska Gov. Mike Dunleavy promised a lawsuit over the administration’s action.

“The leases AIDEA hold in ANWR were legally issued in a sale mandated by Congress. It’s clear that President Biden needs a refresher on the Constitution’s separation of powers doctrine. Federal agencies don’t get to rewrite laws, and that is exactly what the Department of the Interior is trying to do here,” Dunleavy said in a statement. “We will fight for Alaska’s right to develop its own resources and will be turning to the courts to correct the Biden Administration’s wrong.”

AIDEA also vowed a legal response, calling the administration’s action unlawful.

“This latest action by the Department of the Interior shows arbitrary disregard for Federal law, based on campaign trail rhetoric. Campaign promises are not enough to justify this agency action. Under the law, Interior must present real facts and reasons that support this reversal in position,” an authority statement said.

“Interior’s action leaves AIDEA one choice, we have to go to court to protect our rights in the ANWR leases. This time, we will ask the court to allow us to conduct discovery that could include taking the deposition of Biden’s messenger, Secretary Haaland and possibly other administration officials involved so the real motives are made public,” the statement said.

Despite federal policies and U.S. District Court Judge Sharon Gleason’s ruling last month, AIDEA has been proceeding with plans to develop the leases and with spending to carry out those plans.

The authority in 2020 budgeted $20 million toward ANWR oil development, including the initial acquisition of leases. Of that, according to AIDEA board meeting documents, spending in 2023 was expected to total more than $6.3 million. That sum includes nearly $3.7 million in annual payments for the seven leases – although the Bureau of Land Management offered in July of 2022 to refund the annual payments — $1.5 million for predevelopment work intended to lead to a seismic survey of the coastal plain and over $1.1 million for legal and administrative services.

Seismic surveys, as used by the oil and gas industry, precede drilling. The surveys employ sound waves to penetrate the ground and gather information about geology so that companies can better identify spots within the rock formations where oil and gas might be located.

AIDEA last month published a formal request seeking companies to conduct work to prepare for a seismic survey in the refuge’s coastal plain.

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