Court ruling on offshore Arctic leasing creates new obstacle for planned Beaufort sale

A recent ruling upholding Obama-era restrictions on oil leases in the sea could send Trump administration officials back to the drawing board.

By Yereth Rosen - April 4, 2019
Ice floats on the Beaufort Sea in a September 2016 file photo. A federal oil and gas lease sale planned for the sea is now in limbo. (Alek Petty / NASA’s Goddard Space Flight Center)

A planned oil and gas lease sale in the Beaufort Sea off northern Alaska is in legal limbo now that a federal judge has invalidated President Trump’s 2017 order opening up all federal Arctic waters to oil development.

The Trump administration has been planning for a Beaufort Sea lease sale to be held this year. The Beaufort Sea sale was to be among the first in a new Trump-era five-year leasing plan intended to run through 2024 — and intended to replace the Obama-era five-year plan that runs through 2022.

There are now two reasons that the sale cannot be held in the way the Trump administration wants, said Erik Grafe, an attorney with Earthjustice who represented the environmental plaintiffs in the case.

The March 29 ruling by U.S. District Court Judge Sharon Gleason reinstated limits to offshore oil and gas leasing in the Arctic imposed by President Obama — limits that included most of the Beaufort Sea and all of the Chukchi Sea.

The Trump administration, consequently, must abide by the Obama-era withdrawals in any future lease sales, Grafe said. “They can’t lease in the areas that are subject to the withdrawal in the Beaufort Sea,” he said.

The other obstacle to a new Beaufort lease sale is the failure of the Trump administration to make final its five-year leasing plan. That plan was ordered in 2017 by Ryan Zinke, then secretary of the Department of the Interior. The draft schedule calls for multiple Arctic lease sales, along with lease sales in the Bering Sea and Gulf of Alaska and in the Atlantic and Pacific Oceans off the East and West coasts.

That five-year plan will have to be rewritten, Grafe said. “Their leasing plan is certainly expansive in the Arctic and elsewhere. But that, obviously, will have to change because of this ruling,” he said. “They’ll have to go back to the drawing board to do that.”

Even a diminished Beaufort Sea lease sale that complies with the Obama withdrawal would depend on a new five-year plan, Grafe said. The 2017-2022 plan currently in effect does not provide for any new offshore Arctic leasing.

Alaska’s governor and attorney general said they hope Gleason’s ruling will be overturned and that the expansive Arctic leasing program will proceed.

“I am disappointed by this ruling and its implications for the state and national economy,” Gov. Mike Dunleavy said in a statement. “Alaska’s potential offshore oil and gas deposits, if given the opportunity to be safely and responsibly developed, can create jobs, revenue and economic opportunity for decades. One president should not have the power to lock up Alaska’s resources in perpetuity. America needs Alaska’s natural resources.”

“We expect this decision could be appealed all the way to the Supreme Court and my office will participate in any way possible to see this decision overturned,” Alaska Attorney General Kevin Clarkson said in the governor’s statement.

In an email, a spokeswoman for the Department of the Interior declined to comment on either the ruling or the plans for oil and gas leasing in the Beaufort Sea, citing the ongoing litigation.

Obama’s withdrawals were made through a provision of the Outer Continental Shelf Lands Act that allows presidents to remove areas from the offshore leasing program. Trump’s attempt to reverse Obama’s withdrawals — made by a 2017 executive order titled the “America-First Offshore Energy Strategy” — was unlawful, Gleason said in her ruling. The OCSLA allows presidents to take territory out of contention for leasing, but it does not allow presidents to summarily reverse withdrawals and put new territory into the leasing program, she said. Only Congress has the power to do that, she said.

As currently proposed by the Trump administration, the upcoming Beaufort sale would offer all federal territory for auction — including important Inupiat whaling areas that have usually been excluded from past sale offerings.

The National Marine Fisheries Service, the North Slope Borough, Senator Lisa Murkowski and others that whaling had recommended that those subsistence whaling areas be deferred from the lease sale. But Walter Cruickshank, acting director of the Bureau of Ocean Energy Management, rejected those recommendations in November, and his initial call submitted the entire Beaufort Sea for potential leasing.