How interested is the petroleum industry in the Arctic National Wildlife Refuge? Despite all the hype, we really don’t know.
The federal government will soon have a good indication after it issues a “Request for Nominations” from explorers, a normal procedure in the government’s leasing process where it asks companies what tracts they are interested in.
The nominations are confidential because explorers don’t want competitors to have this information, but it is important the government in knowing how much acreage to make available for bidding in the 1.5-million-acre coastal plain of ANWR. The public won’t know anything, however, until the lease sale is held, and the results are evident.
A call for nominations must be published in the Federal Register and companies submit them 30 days later, the U.S. Bureau of Management’s Alaska officials say.
U.S. Department of the Interior officials released the final Environmental Impact Statement, or FEIS, for ANWR leasing last week. It is an important regulatory step that clears the way for a Record of Decision, which typically comes 30 days after the FEIS is published. Interior officials say they still hope to hold a sale by the end of the year, said Chad Padgett, Alaska Area Manager for the U.S. Bureau of Land Management. A notice of the sale will be published 30 days in advance.
Meanwhile, lawsuits are expected to be filed by conservation groups and those could delay the lease sale. Critics of the ANWR leasing and exploration say the EIS was developed in a hurried manner. That may provide openings for legal challenges.
Interior officials defended the environmental review. “After rigorous review, robust public comment, and a consideration of a range of alternatives, today’s announcement is a big step to carry out the clear mandate we received from Congress to develop and implement a leasing program for the Coastal Plain, a program the people of Alaska have been seeking for over 40 years,” U.S. Secretary of the Interior David Bernhardt said in a statement.
Leasing of lands in the refuge was approved last year in the federal Tax Cuts and Jobs Act of 2018. The tax act requires a minimum of 400,000 acres to be offered but the final EIS evaluated and has recommended leasing of the entire 1.5 million acre area, Padgett said, so if the action proposed in the EIS is approved BLM will be able to offer tracts anywhere in the 1.5 million acres of coastal plain. It is possible that only certain parts of the coastal plain will be offered with some areas withheld for a future offering. Alternatively, the BLM could open the entire coastal plain area to bidding, an “area-wide” lease sale like those done by the BLM in the northeast National Petroleum Reserve-Alaska, which BLM also administers.
The state of Alaska offers similar areawide sales on its lands in the central North Slope and Cook Inlet.
In ANWR, the environmental stipulations and lease operations rules recommended in the EIS are similar to those now in effect for existing leases in the National Petroleum Reserve-Alaska, Padgett said. Stipulations on the leases offered will include setbacks with no surface activity allowed along streams and around waterbodies, and seasonal restrictions, for example during periods of caribou calving.
Padgett said about one million public comments were received by BLM during the draft EIS stage earlier this year but that only 4,000 of these were “substantive,” meaning the bulk of the comments were essentially duplications. “Those 4,000 substantive comments were helpful in helping us prepare a comprehensive analysis,” of the leasing, Padgett told reporters.
It’s unclear just how much interest in ANWR there is within the industry. The area is adjacent, and east, of state-owned lands where there have been small oil discoveries and one significant gas and condensate find at the Point Thomson field just west of the ANWR boundary.
Major companies with experience and knowledge of the Point Thomson area, such as Exxon Mobil Corp. and BP, have been largely silent during the years of fierce debates in Congress over leasing, as have other companies. BP holds an interest in data from one exploration well on a private land inholding on the coastal plain but recently announced that this will be included in a sale of BP Alaska assets to Hilcorp Energy, a Texas-based independent. Some people familiar with the industry see this as a signal that BP didn’t put a huge value on the confidential data from the well.
However, the silence within the industry shouldn’t be taken as a signal that the lease sale will not draw a lot of attention. Companies are usually quiet about their intentions prior to a competitive-bidding sale.
After years of listening to fierce debates over ANWR many Alaskans believe that the coastal plain holds another super-giant oil and gas field like Prudhoe Bay, but the odds are against this. It seems likely that some oil and gas will be found, at least in the western part of the area. That is just east of ANWR’s boundary with state of Alaska lands along the Canning River. BP and ExxonMobil discovered a major natural gas and liquid condensate field at Point Thomson a few miles west of the ANWR border and BP made a small oil discovery virtually on the border. An independent explorer, Jade Energy, will drill another exploration well to further test this prospect and there are indications that part of the underground deposit extends under the Canning River and into the refuge area.
Meanwhile, oil and gas exploration in the refuge is strongly opposed by U.S. conservation groups. The Natural Resources Defense Council, a major U.S. conservation group, called the federal government’s ANWR plan “flatly illegal,” a signal that lawsuits will be filed.
In a statement, the NRDC identified key weaknesses that it thinks make the action legally defective.
“It prioritizes the most aggressive leasing option, or Alternative B analyzed in the EIS, of offering the entire coastal plain to the oil and gas industry with no meaningful protections for Alaska Native cultural values and ways of life, sacred lands, wildlife, water, and the area’s iconic wilderness characteristics,” the NRDC said in a statement.
“It (also) ignores the extensive testimony and traditional knowledge of the Gwich’in Peoples of Alaska and Canada, which demonstrated that oil and gas exploitation of the coastal plain would have significant impacts on the calving and nursery grounds for the Porcupine Caribou Herd, and diminishes the deep physical, social, cultural, and spiritual connection of the Gwich’in to the caribou, which they rely on for food and their culture.
“It fails to disclose and underestimates the impacts of oil and gas activity on iconic species like polar bears, caribou, and millions of migratory birds, as well as the tundra and permafrost that support the Arctic ecosystem. The Arctic Refuge contains the greatest biodiversity of any protected area north of the Arctic Circle. It is one of the United States’ most majestic places,” the NRDC said.
The entire Arctic National Wildlife Refuge covers a large 19.2-million-acre area in far northeast Alaska, with most of it declared a federal Wilderness area, meaning no motorized access. A portion of the coastal plain was excluded from the Wilderness designation in the 1980 Alaska National Lands and Conservation Act, or ANILCA, because of its oil and gas potential.
ANILCA directed the interior department to study the potential and the region was subsequently recommended for leasing by the agency subject to final approval by Congress. Congressional approval came decades later, however, in the 2019 tax law.