A pivotal moment in the decades-old saga to open the Arctic National Wildlife Refuge to oil and gas drilling will take place Wednesday, when a federal agency plans to open bids from entities seeking to lease tracts there for oil and gas development.
A federal judge on Tuesday denied conservation groups’ request to halt the the Trump administration from giving out the leases, though the broader case that seeks to stop the oil and gas program in the refuge has not yet been decided.
The oil lease sale won’t be the end of the drama swirling around the refuge. Actual drilling in the refuge is not expected to happen for years to come, and many want to stop it altogether.
Lawsuits from conservation and some tribal groups will continue. Major banks have vowed they won’t finance oil activity in the refuge. And while the Republican-led Congress in 2017 approved it, President-elect Joe Biden opposes it and could hinder the project for years, or maybe stop it permanently.
Not much is known about the potential for a big oil discovery in the 19-million-acre refuge’s coastal plain in northern Alaska, where the land would be leased.
Congress has let oil companies drill just one well there, in the mid-1980s, using older technology that could have missed big traps of oil. The well’s data has been a closely guarded secret, though a New York Times investigation in 2019 found it might have been a dud.
Over the years, many Alaska residents and political leaders have pinned their hopes on a major oil find there, like Prudhoe Bay to the west that supported the state’s economy for decades. Environmental groups and many others, including some Alaska tribes, fear drilling will compound global warming and put precious wildlife at risk, including polar bears and the Porcupine caribou herd.
What will the sale look like?
Unlike many previous lease sales where oil company executives and reporters would gather in a room as bids were plucked from envelopes and announced, this event will be livestreamed. The federal government is not allowing the general public, the media and industry in the room.
The Bureau of Land Management is holding the lease sale.
Entities that submitted bids by the Dec. 31 deadline are vying for 10-year leases on 22 tracts.
Most tracts run around 50,000 acres. Minimum bids were set at $25 an acre plus other fees, according to the lease plan.
The bids will be opened and announced on video at blm.gov/live, starting at 10 a.m. in Alaska.
Which oil companies might buy leases?
It’s unclear. Oil and gas companies typically keep a tight lid on their bids.
The level of bidding could be limited. Big oil companies face reputational risk amid growing concern over climate change. And the lack of financial support from major banks could hurt smaller investors without the cash flow for costly Arctic exploration.
A BLM spokeswoman on Monday said the agency has received bids for the sale. But she declined to specify how much, or to generally describe the bidders.
The Alaska Industrial Development and Export Authority might have bid up to $20 million. The state-owned agency had planned to place minimum bids on the tracts in case no oil and gas companies came forward, drawing criticism from sale opponents.
AIDEA’s director on Monday declined to disclose whether the agency had submitted bids.
Sparse bidding could still lead to development. In recent years, smaller, risk-taking companies in Alaska have led exploration efforts.
One of those companies, Denver-based Armstrong Oil and Gas, contributed to major new finds on the state’s North Slope, attracting investments from larger companies including ConocoPhillips.
Those opportunities, geologically different from the deeper collections of oil that supported Alaska’s older oil fields, might extend to the refuge, experts have said.
There’s much more to come
What happens after the lease sale will be critical.
Multiple lawsuits brought by conservation and tribal groups are a long ways from being fully resolved. And although issuing the oil leases could move more quickly under the outgoing Trump administration, the Department of Justice still has to launch a review to make sure there are no antitrust issues with the bidding.
Groups fighting oil development in the refuge hope to punt the matter into the hands of the Biden administration. Biden has said he opposes drilling there. Biden’s nominee for Interior secretary, Rep. Deb Haaland, D-N.M., also opposes it.
Experts have said his administration could throw up roadblocks to drilling. Under the right circumstances, such as Democratic control of the executive and legislative branches, Biden might be able to permanently stop drilling in the refuge, one of his campaign pledges.