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Energy

Biden blocks drilling in ANWR, among his first acts as president

The Arctic National Wildlife Refuge's coastal plain in summer. (Loren Holmes / ADN archive)

President Joe Biden signed an executive order placing a temporary moratorium on oil and gas activity in the Arctic National Wildlife Refuge, hours after his inauguration on Wednesday and one day after the Trump administration issued nine oil and gas leases in the refuge’s coastal plain.

The moratorium was one of several actions Biden issued during his first hours, sending a strong signal that the new presidential administration will take a vastly different approach to Alaska resource issues than the previous one. It fell under a wide-ranging executive order, billed as an action to protect public health and the environment and to address climate change.

“In light of the alleged legal deficiencies underlying the program, including the inadequacy of the environmental review required by the National Environmental Policy Act, the Secretary of the Interior shall, as appropriate and consistent with applicable law, place a temporary moratorium on all activities of the Federal Government relating to the implementation of the Coastal Plain Oil and Gas Leasing Program,” the order said.

The moratorium, which drew immediate blowback from Alaska’s political leaders, falls short of permanently protecting the refuge, as promised on the Biden-Harris campaign site. But it could be a step in that direction with Democrats controlling both chambers of Congress and the White House.

Drilling in the 19-million-acre refuge had made enormous gains under former President Donald Trump. A Republican-led Congress approved it in the 2017 Tax Cut and Jobs Act, requiring lease sales by the end of 2021 and 2024, achieving a decades-old dream of Alaska’s congressional delegations.

The first sale was held early this month, but it fizzled amid intense opposition from conservation groups, vows by major banks not to finance exploration in the refuge and challenging market conditions. Only two small companies and the Alaska Industrial Development and Export Authority, a state agency with limited experience in oil and gas activity, purchased leases. Oil production in the refuge, if it ever occurs, is not expected to happen for at least a decade.

Issuing the 10-year leases gives the owners a legal right to take steps to pursue exploration. The issuance will create extra legal hurdles for Biden to overcome, but experts have said Biden’s administration has avenues to delay or stop it.

The oil and gas leases will be reviewed, Biden’s press secretary, Jen Psaki, said in a briefing with reporters Wednesday.

The order also says the Interior Secretary “shall review the program and, as appropriate and consistent with applicable law, conduct a new, comprehensive analysis of the potential environmental impacts of the oil and gas program.”

‘Right to have a job’

Alaska’s Republican leaders quickly condemned Biden’s order.

Gov. Mike Dunleavy in a statement said the decision to “shut down” ANWR development was expected, and said the new administration sees the state as “more of a territory or colony, as opposed to an equal state in the union.”

“I’m prepared to use every resource available to fight for Alaskans’ right to have a job, and have a future by taking advantage of every opportunity available to us,” Dunleavy said.

“Well that was fast,” U.S. Sen. Dan Sullivan said in a statement. “Today, in his inaugural address, President Biden called for national unity and healing. However, just hours earlier, his administration took their cues from radical environmentalists in issuing punitive and divisive actions against Alaska, many other resource development states, and whole sectors of our economy.”

Sen. Lisa Murkowski said she was “astounded” to see Biden put jobs at risk on his first day in office.

“In the past month, we have seen significant progress with the sale, signing, and issuing of leases in the non-wilderness (coastal area of the refuge),” she said. “The Biden administration must faithfully implement the law and allow for that good progress to continue.”

“This is not the time to roll back our progress in ANWR, especially amid an economic downturn caused by a global pandemic,” said Rep. Don Young.

‘Protecting sacred lands’

The U.S. Geological Survey has estimated that the refuge’s coastal plain could contain billions of barrels of oil, and Alaska leaders have long looked to the prospect of drilling there as a way to sustain the state’s future economy. But drilling opponents say oil and gas activity would exacerbate global warming and endanger the sensitive Arctic region and the polar bears and Porcupine caribou herd that use it.

The Gwich’in Steering Committee, advocating for Alaska Native people who depend on the Porcupine caribou herd for food, thanked Biden and Harris early Wednesday.

“Mashi’ choo, President Biden. The Gwich’in Nation is grateful to the President for his commitment to protecting sacred lands and the Gwich’in way of life,” said Bernadette Demientieff, executive director of the Gwich’in Steering Committee.

“We know there’s so much work ahead, and are thankful that the president will take early action to help protect these lands forever,” Demientieff said.

Dan Kish with the Institute for Energy Research in Washington, D.C., a group that analyzes energy market regulation and supports development in ANWR, said the leaseholders will have an opportunity to sue if they feel the Biden administration is not meeting the lease terms.

“If the government drags its feet on things, they can be litigated or purchased for considerable sums,” Kish said. “I’ve seen circumstances where leases have been vacated by government action. There were big payouts.”

“And there was much less potential energy than lies in ANWR,” he added. “You are talking about estimated quantities (of oil) that are worth enormous sums of money that could potentially be the government’s obligation.”

Kara Moriarty with the Alaska Oil and Gas Association said it’s disappointing to see the Biden administration moving quickly before interacting with stakeholders.

“These swift decisions will impact the long-term future for Alaskans and the country,” she said. “The demand for oil and gas is not going away in the next few decades. We stand ready to work with this administration to find common ground on future issues. Our state’s economy depends on a vibrant industry.”

‘A giant pause button for ANWR’

Matt Newman, an attorney with the Native American Rights Fund — representing Alaska Native tribes from Arctic Village and Venetie that have sued to stop the leasing program in the refuge — said the issuance of leases will create additional legal hurdles for the Biden administration to follow, if it plans to revoke them.

But Newman said there are multiple paths the administration can take to stop drilling. The courts could also rule that the leases should be revoked, if multiple lawsuits filed against the leasing program are successful.

As for following through with the moratorium, Biden can temporarily suspend the leases or decline to issue federal authorizations needed for oil and gas activity to proceed in the refuge, including for a proposed seismic program that would explore for oil in the refuge, Newman said.

”This is a guessing game, but I do think a giant pause button for ANWR is about to be hit,” Newman said.

He said the federal government has suspended leases before. Former President Barack Obama’s administration suspended oil and gas leases in Montana in an area sacred to the Blackfeet Nation. Federal courts have upheld the decision.

“It’s not an uncommon thing for Interior to suspend activities on the leases in light of new information that arises or a concern for how the original decision-making was done,” Newman said.

What happens long-term to leasing in the refuge, given that it’s called for in the 2017 tax act, is more of an unknown, Newman said.

Larry Persily, a former Alaska deputy commissioner of revenue, said a moratorium on drilling in the refuge should have no near-term impact on the state’s economy. The limited interest in the lease sale indicates that not much activity, if any, would be happening there anyway, he said.

“Alaskans need to stop dreaming about ANWR and start thinking about other things,” he said.

A spokeswoman with the Alaska Industrial Development and Export Authority, which acquired seven leases in the refuge’s western coastal plain for about $9 million, said the agency will not speculate on what Biden might do and would not provide additional comment.

David Wall, head of Australia-based 88 Energy, owner of a subsidiary that was issued a single tract in the refuge, said he hopes to develop tracts held by the company on state land, just west of the refuge. That might allow his company to drain oil from beneath the refuge, without setting foot within it.

He said Biden can halt drilling in the refuge, but the next president might open it back up again.

“It’s obvious (Biden) would do something like this,” Wall said. “It’s not that concerning to us.”

He said the company is focused on the long-term.

“Nothing is permanent,” Wall said.

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