Trump Administration Drilling Auction for Arctic Refuge Attracts Little Interest
Nichola Groom and Yereth Rosen, Reuters
Wed, 01/06/2021 - 02:09 PM
[Editor's note: This story was updated at 4:19 a.m. CT Jan. 7.]
The Trump administration on Jan. 6 found few takers at its sale of drilling leases in the Arctic wildlife refuge, with an Alaska state agency emerging as the sole bidder for most of the acreage sold.
The sale, which generated around $14.4 million in high bids, marked a rejection by the oil and gas industry of one of President Donald Trump's signature efforts to expand fossil fuel and mineral development in the United States and to Alaska officials' decades-long effort to open up drilling in the Arctic National Wildlife Refuge (ANWR).
Proceeds were a far cry from the Congressional Budget Office estimate from 2019 of $1.8 billion in bids from two ANWR lease sales over a decade. U.S. Bureau of Land Management (BLM) officials called the sale "a success" while environmental groups labeled it an "epic failure."
It came two weeks before the inauguration of President-elect Joe Biden, who has pledged to protect the 19.6 million-acre habitat for polar bears, caribou and migratory birds and to ban new oil and gas leasing on federal lands.
On a day when Trump supporters stormed the U.S. Capitol building, the White House would not comment on the sale.
BLM said it received complete bids on half of the 22 tracts offered, and 50% of the acreage.
The Alaska Industrial Development and Export Authority won nine tracts, while small independent companies, Knik Arm Services LLC and Regenerate Alaska Inc., won two. Alaska has said it hopes to partner with oil companies to develop the leases it won in the auction.
BLM officials would not speculate on why oil and gas companies declined to submit bids in the auction, which the Interior Department pushed for months to deliver before Trump leaves office.
"While it might not meet some of the targets that some folks think it should meet, it's still a successful sale," BLM Alaska State Director Chad Padgett said on a call with reporters.
U.S. Senator Lisa Murkowski, who pushed for Congress to open up ANWR to oil and gas development as part of the 2017 tax bill, said in a statement the sale "did not occur under ideal conditions" but would benefit Alaskans "well into the future."
The American Petroleum Institute, the top U.S. oil and gas trade group, issued a statement citing weaker fuel demand during the coronavirus pandemic and potential federal policy changes for "continued uncertainty" surrounding investment decisions.
Environmental groups that have sued to block energy development in ANWR declared the sale a massive flop.
"This lease sale was an epic failure for the Trump administration and the Alaska congressional delegation," Adam Kolton, executive director of environmental group Alaska Wilderness League, said in a statement.
Canada's Minister of Environment and Climate Change, Jonathan Wilkinson, in a statement also voiced "serious concerns" about the impact of possible oil and gas development on a herd of Porcupine caribou that roams northeastern Alaska and northwestern Canada.
Though the refuge's coastal plain is estimated to contain up to 11.8 billion barrels of oil, it has no roads, established trails, or other infrastructure—factors that likely kept interest from drilling companies to a minimum.
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