Opinions

Alaska should bid on ANWR oil leases itself

We have been waiting 25 years for another Arctic National Wildlife Refuge lease sale. Now it has been scheduled for Jan. 6, 2021. Is Alaska ready?

So far, there has been no indication from the producers of an intent to bid on the tracts. We hope some of the smaller independent producers will bid, but we haven’t heard from Exxon, ConocoPhillips or Hilcorp. BP has already left Alaska. Opposition to exploration in the Arctic has been the rallying cry for the national environmental groups for years. The major banks have indicated that they would no longer fund oil and gas development in Alaska’s arctic. Fortunately, the bank regulators, the Comptroller of the Currency has issued a mandate that our banking system must be accessible to everyone on an equal basis.

The oil and gas industry has historically contributed more than 70% of our state’s revenue. We first got ANWR approved for a lease sale back in 1995. Authority was given by a favorable vote in both the U.S. Senate and the House through the efforts of Congressman Don Young, Sen. Ted Stevens and me. Unfortunately, the environmental groups persuaded President Clinton to veto the bill.

Now, through the efforts of Rep. Young, Sen. Dan Sullivan and Sen. Lisa Murkowski, and with the support of President Donald Trump, Congress has again passed a bill in support of leasing. President Trump has made quite a point of declaring that the United States is finally energy independent in oil and gas production and we are no longer held captive by the Middle East oil producers.

When opportunity knocks, we can’t just pull the covers over our heads and hope that someone else will help us out. I have been in contact with numerous Alaskans, including former governors, in expressing our concerns over the prospect of having a federal lease sale with no bidders. After all our efforts, hope and aspirations, Alaska will look like the proverbial paper tiger.

After Clinton vetoed the ANWR bill in 1995, I held a meeting with BP officials and suggested that BP consider acquiring tracts just outside the ANWR border from which it would conduct directional drilling under ANWR. Should it be successful, then because of the “rights of capture” policy, the Department of Interior would have to initiate drilling on its ANWR land to protect its federal holdings. BP said it had considered the idea, but abandoned it because of fear of retribution from the Clinton administration.

Arctic Slope Regional Corporation, Chevron and BP drilled the Kaktovik well in 1986. It was a tight hole. The State has drill logs on the well which have never been released. Perhaps ASRC, in conjunction with Doyon, Ltd., would consider bidding on the lease sale. It would be a shame to allow this resource — for which the state has fought so long and hard — to be abandoned.

I urge the Dunleavy administration to have the state present the lease sale and to bid on a portion or all of the leases with bids meeting at least the minimum. Such an effort could be coordinated by the state’s Department of Natural Resources and the attorney general’s office. If there are other bidders, then the state bids will not be necessary.

But if there are no bidders on the lease sales at all, Alaska will likely never be able to develop our oil and gas potential from ANWR. Funding for the bid need not be difficult. The bid could be funded from acquired revenue receipts or reserve accounts or by the Permanent Fund. Trading investment dollars for developing valuable revenue producing leases, which when operational could generate a handsome return to the investors.

I encourage all Alaskans to urge the Dunleavy Administration not to pass up this opportunity. We can’t wait for another 25 years.

Frank Murkowski served as governor of Alaska from 2002-2006, and previously served as a U.S. senator from Alaska.

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