Energy & Environment

Trump’s sale of Arctic refuge drilling rights earns just a fraction of GOP prediction

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The Trump administration auctioned off oil and gas rights in the Arctic National Wildlife Refuge (ANWR) for the first time ever Wednesday, selling off 1.6 million acres along the coast to primarily one major buyer: the state of Alaska. 

The Alaska Industrial Development and Export Authority (AIDEA) won nearly every bid, a sign that oil companies were largely uninterested in developing the pristine wildlife refuge as many major banks have refused to provide financial backing and public support for the projects has diminished.

The sale raised just $14.4 million dollars, roughly $27 per acre. That figure is far below the billion dollars the 2017 bill projected the government would earn alongside a second sale. Only half the acres up for sale received bids, which were submitted by only three companies. 

The sale, just two weeks before President-elect Joe Biden is sworn in, shows the Trump administration’s determination to kickoff oil drilling in the Arctic before leaving office. Passed as part of the 2017 tax bill, the law requires the sale by the end of 2021.

Environmentalists and Democrats have long opposed drilling in the refuge, saying it will blemish untouched wilderness, harm wildlife and exacerbate the climate crisis to extract a resource the U.S. should diminish its reliance on.   

“Trump is giving away treasured land in the Arctic Refuge at rock bottom prices in today’s oil/gas lease sale,” Rep. Jared Huffman (D-Calif.) said on Twitter, calling the sale a human right violation for the Gwich’in tribe that considers the area sacred. 

Huffman’s bill to block drilling in ANWR passed the House but was never taken up in the GOP-led Senate.

The AIDEA largely serves as Alaska’s economic development wing and is not itself an oil company. It will need to resell the leases to those that can drill — a move that raises a number of legal questions.

Two other companies purchased one tract of land each.

“To my knowledge this has never happened before, that a state bids on federal leases within their own state,” Jenny Rowland-Shea, a senior public lands policy analyst at the Center for American Progress told The Hill.

“It’s very odd because the state of Alaska will get 50 percent of the revenue from lease sales. Basically they will be paying to not make any money on those lease sales.”

The Bureau of Land Management (BLM), which conducted the lease sale, praised the success of the historic sale and defended the state’s ability to purchase the bulk of the leases through AIDEA.

“It doesn’t present legal issues from our perspective,” Kevin Pendergast, BLM’s deputy state director for Alaska said on a call with reporters, describing it as an “evolution” of BLM’s earlier work with the state.

“It’s a new perspective, a new element to the process of working within the Alaska Industrial Development and Export Authority. It’s a corporate entity, and in that sense they’re able to take actions like this, and it meets our regulatory requirements.”

Biden has said he will “permanently protect” ANWR, and the late-stage nature of the sale along with numerous lawsuits could slow the process, giving the incoming administration further avenues to block drilling. 

“The writing is on the wall for any of the bidders. It will be tough to get financing and the incoming Biden administration and opposition in the Senate and even new leadership in the Senate and lots of litigation ongoing over the rushed Trump environmental reviews for these projects — all that will make it difficult for companies to drill,” Rowland-Shea said. 

Though the acreage up for grabs is just 8 percent of the refuge, the total area up for sale was roughly the size of Delaware.

“The Trump administration railroaded this lease sale through amid a global pandemic and economic recession, and absent any real evidence that pursuing Arctic Refuge oil would provide any significant federal returns. Not surprisingly, today’s sale generated significantly less federal revenue than the $1 billion promised by drilling proponents, resulting in a fire sale of some of the most valuable and ecologically significant wilderness remaining in North America,” a coalition of major environmental groups like the Sierra Club and Earthjustice said in a release.


Tags Alaska ANWR Arctic National Wildlife Refuge Jared Huffman Joe Biden
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