Trump seeks to accelerate auctions for Arctic refuge drilling

By Jennifer A. Dlouhy on 11/13/2020

(Bloomberg) --The Trump administration is advancing plans to auction drilling rights in the U.S. Arctic National Wildlife Refuge before the inauguration of President-elect Joe Biden, who has vowed to block oil exploration in the rugged Alaska wilderness.

The Interior Department is set to issue a formal “call for nominations” as soon as Monday, kick-starting a final effort to get input on what tracts to auction inside the refuge’s 1.56-million-acre coastal plain. The plans were described by two people familiar with the matter who asked not to be named detailing administration strategy.

Biden has pledged to permanently protect the refuge, saying drilling there would be a “big disaster.” But those efforts could be complicated if the Trump administration sells drilling rights first. Formally issued oil and gas leases on federal land are government contracts that can’t be easily yanked.

The U.S. Geological Survey has estimated the refuge’s coastal plain might hold between 4.3 billion and 11.8 billion barrels of technically recoverable crude. Yet it’s unclear how many oil companies would have the appetite to mount costly operations in the remote Arctic wilderness amid low crude prices, steep public opposition, and regulatory uncertainty. Major U.S. banks have sworn off financing Arctic drilling projects, and conservationists are also pressuring oil executives to rule out work in the region.

Truly Wild

Environmentalists argue Arctic oil development imperils one of the country’s last truly wild places -- a swath of northeast Alaska populated by polar bears, caribou, and more than 200 species of birds.

The Trump administration is also fast-tracking a proposal to conduct 3-D seismic surveys inside the refuge before Jan. 20. The surveys can help pinpoint possible underground oil reserves, but environmentalists warn they are large industrial operations that threaten polar bears hidden in snow-covered dens.

Oil companies that buy leases in the refuge might never get the opportunity to use them while Biden is in the White House. Even if leases are sold and issued before Jan. 20, companies will need permits governing air pollution, animal harm, water usage and rights of way that the new administration could stall or deny.

Congress mandated the Interior Department hold two auctions of coastal plain oil leases before Dec. 22, 2024. But environmentalists, states and indigenous groups have already mounted legal challenges against the leasing plan. Any victory by the conservationists or settlement with the Biden administration requiring more environmental review could jeopardize leases.

Interior Department representatives didn’t immediately respond to an emailed request for comment. The “call for nominations” will help Interior’s Bureau of Land Management decide the contours of an auction. The agency still must issue a formal “notice of sale” before holding one.

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