By Rachel Koning Beals
The Trump administration beginning Tuesday wants oil and gas firms to select where they might want to drill for the first time in the U.S.’s largest pristine tract of wilderness, Alaska’s Arctic National Wildlife Refuge, before President-elect Joe Biden assumes the White House in January.
The “ call for nominations ” to be published in the Federal Register allows companies to first identify tracts on which to bid during an upcoming lease sale on the refuge’s nearly 1.6 million acre coastal plain, which is about the size of Delaware. Leases may prove difficult to claw back once finalized, though court challenges are expected.
The move will open up public lands to drilling, as well as logging, mining and grazing. Biden campaigned on protecting public lands from these activities.
A Republican-controlled Congress in 2017 authorized drilling in the refuge, which is home to tens of thousands of migrating caribou and waterfowl, along with polar bears and Arctic foxes. President George W. Bush had promoted drilling there but ran into congressional roadblocks.
It remains to be seen how strong drilling interest in the refuge might be from major U.S. oil concerns, including Exxon Mobil (NYS:XOM) and Chevron (NYS:CVX) . For one thing, infrastructure and roads have been purposefully kept out of the refuge and would require investment. Historically low oil prices (NYM:CL00) may also preclude investing in expansion. The area is estimated to contain as much as 11.8 billion barrels of recoverable crude.
Hilcorp Energy Co., Exxon Mobil and ConocoPhillips (NYS:COP) already produce oil and gas in Alaska’s north slope. Chevron partnered with BP (NYS:BP) on the only test well ever drilled in the refuge more than three decades ago.
Major banks including Goldman Sachs (NYS:GS) , JPMorgan Chase (NYS:JPM) , Citigroup (NYS:C) , Morgan Stanley (NYS:MS) and Wells Fargo (NYS:WFC) are among the two dozen financial firms that have said they will not fund any new oil and gas development in the Arctic Refuge as part of their own climate-change initiatives.
Smaller participants might be likely to bid on leases. For instance, some Alaska Native tribal corporations have already expressed an interest in conducting seismic tests to identify oil reserves on the coastal plain, the Washington Post reported.
“This call for nominations brings us one step closer to holding a historic first Coastal Plain lease sale, satisfying the directive of Congress in the 2017 Tax Cuts and Jobs Act and advancing this administration’s policy of energy independence,” Chad Padgett, the Bureau of Land Management’s Alaska state director said in a statement.
Opponents have said that extracting oil from the refuge would exacerbate the climate crisis, violate the human rights of indigenous Alaskans who live off the land and is “fraught with financial risk,” given the likelihood of long legal battles over refuge leases. A group of more than 250 signatories, mostly representing environmental, indigenous and investing interests, expressed such concern in a letter released in September.
Opening up the refuge follows a host of fossil fuel-favorable policy moves during the Trump administration, including the roll back of more than 125 environmental regulations or policies. Some of these protections had been in place for decades, spanning administrations from both parties.
Those in favor of the rollbacks have said they are expensive for business and unevenly enforced. But the industry has also spent mightily in Washington to make its case. Lobbying data from the Center for Responsive Politics showed that during the 2017-2018 midterm election cycle, corporations, individuals and trade groups in the fossil fuel industry spent $265,773,915 in lobbying and $93,392,002 in contributions to national-level candidates, parties and outside groups , bringing the total spending by the industry to more than $359 million in two years.
Still in the works are plans to open up much of the National Petroleum Reserve in Alaska to drilling and narrowing the definition of critical habitat for endangered species, including when companies are liable for killing migratory birds.
The government also plans to auction off oil and gas rights to more than 383,000 acres of federal land in the Lower 48 in the next two months, Taylor McKinnon, public lands campaigner for the advocacy group Center for Biological Diversity, told the Washington Post.