The Trump administration on Tuesday issued 10-year leases on nine tracts in the Arctic National Wildlife Refuge, teeing up a last-minute effort to allow oil and gas drilling there that will likely soon be opposed by President-elect Joe Biden and the newly Democratic-led Congress.
Two of the tracts that received bids in the lease sale will not be issued, after the Alaska state agency that bid on them decided not to pursue the leases, an official confirmed Tuesday.
The Bureau of Land Management issued seven leases to the Alaska Industrial Development and Export Authority, a development corporation owned by the state, and one each to Knik Arm Services and Regenerate Alaska, the agency said in a statement on Tuesday. The tracts cover 440,000 acres on the refuge’s coastal plain, the only section of the refuge open to drilling.
The federal agency opened bids for 11 tracts early this month, including nine high bids from AIDEA.
AIDEA said it will not pursue leases for two tracts, said Colleen Bryan with the agency.
The two tracts AIDEA is dropping are the easternmost of the tracts that received bids. It might bid again on those tracts in a future lease sale, Bryan said.
That leaves AIDEA with seven tracts in the western coastal plain, in an area believed to hold larger potential for an oil discovery.
AIDEA is pursuing the remaining tracts to preserve access to oil and gas potential and to limit the footprint of development, Bryan said.
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The lease sale generated only $14.4 million in high bids. AIDEA’s decision not to pursue lease rights to two of the tracts drops that value to about $12 million.
The proceeds from the sale are split evenly between the state and federal governments, so the state will get much of the money it invested in the lease sale back. It invested more than $9 million.
The money will flow into the state treasury, not AIDEA, said Larry Persily, a former deputy commissioner of Revenue for Alaska.
AIDEA will forfeit some money by not pursuing leases on the two tracts, said Lesli Ellis-Wouters, a spokesman with the Bureau of Land Management.
Bidders were required to submit 20% of their bids. AIDEA submitted $575,000 for the two bids, Bryan said. Half that money, or about $290,000, will be forfeited to the federal government, under the law, while the other half will be returned to the Alaska treasury.
Biden, who is inaugurated on Wednesday, has said he opposes drilling in the refuge. Now that the leases are issued, it could complicate his effort to stop oil companies from pursuing activity there.
Still, experts say the Biden administration can take multiple paths to delay or stop drilling, and supporters of drilling in the refuge are not expecting much progress under Biden. Following the results of the Georgia Senate runoffs, Democrats now control a Congress that also could soon take action to overturn the 2017 provision that allowed drilling.
“We look forward to (Biden) taking strong and decisive action to ensure that no oil rig or seismic truck ever despoils an inch of this last great wilderness,” said Adam Kolton, executive director of the Alaska Wilderness League, in a prepared statement on Tuesday.