ANWR

The U.S. Bureau of Land Management issued a formal solicitation Monday for interest from petroleum companies for tracts in the Arctic National Wildlife Refuge, or ANWR.

The agency will put up the entire 1.6 million acres of ANWR’s coastal plain for lease. The area is thought to have high potential for major oil and gas discoveries.

BLM plans on offering 32 tracts in the coastal plain in a sale that will follow the receipt of nominations from companies as to which tracts they are most interested in.

The deadline for these is Dec. 17. A subsequent announcement will announce the sale at least 30 days prior to the lease offering, BLM said Monday.

That timing could put an ANWR coastal plain lease sale no earlier than Jan. 17, three days before President Donald Trump leaves office. President-elect Joe Biden, who will be sworn in Jan. 20, has said he opposes leasing in the Arctic refuge.

The call for tract nominations is BLM’s first step in the lease sale.

“Receiving input from industry on which tracts to make available for leasing is vital in conducting a successful lease sale,” BLM Alaska State Director Chad Padgett said in a statement.

The 2017 tax act authorizing the lease sale changes the purposes of refuge management to include oil and gas development in the coastal plain area along the Arctic coast.

The legislation directed the Secretary of the Interior to carry out competitive leasing to allow more oil production and throughput in the 800-mile Trans Alaska Oil Pipeline System connecting Alaska’s North Slope to an oil shipping terminal at Valdez. TAPS is now operating at about 500,000 b/d, one-fourth of its original design capacity of 2 million b/d.

National conservation groups have fought drilling in the refuge, citing impacts on polar bears and migrating caribou. BLM recently approved a Record of Decision on a Final Environmental Impact Statement for leasing.

Major conservation groups are criticizing the action and have filed lawsuits over BLM’s decisions on the Record of Decision. They may seek a court injunction to stop a January lease sale.

“The Trump administration is barreling forward with a last-minute lease sale in America’s most iconic wilderness after sidestepping the environmental review process mandated by the National Environmental Policy Act,” said Jody Potts, a spokesperson for the Han Gwich’in Native Movement, a coalition of indigenous groups opposing ANWR drilling.

“The Interior Department’s own documents show it has altered or disregarded scientific data on drilling’s impacts on imperiled wildlife, including threatened polar bears who den on the coastal plain; drastically overestimated potential leasing revenue,” Potts said in a statement issued Nov. 13.

In preparing for the sale the Interior Department failed to adequately consult with the indigenous peoples of the Gwich’in Nation of Alaska and Canada, she said.

The Gwich’in make their home along the migratory route of the Porcupine caribou herd and rely on the herd for their survival, Potts said.

The industry’s appetite for leases in the refuge is highly uncertain, despite its potential. The intense politics and controversy connected with any effort to drill and develop discoveries could dampen bidding, and low oil prices have cut into the cash available to companies for bids.

The area is also remote and discoveries will have to be large to justify the costs of development. There’s not a ot of information available to companies on which to base their bids. There is no seismic, or geophysical, data in the region other than from an industry “group shoot,” in the 1980s, where data was shared among companies sponsoring the work.

The work was done using older seismic technology. A proposal has been made for a new seismic program using modern technology made by SA Exploration, an Alaska-based geophysical company, but it has not yet been approved by BLM. There is not enough time for it to be done for a lease sale in January.

One exploration well has been drilled. Chevron Corp. and BP hold information on the only test well in the refuge, the KIC No. 1 well drilled in the early 1980s within a 91,000-acres private inholding in the northern part of the coastal plain.

BP’s ownership of the well data is now owned by HIlcorp Energy, a major independent company that purchased BP’s Alaska upstream assets earlier this year.

Meanwhile, major conservation groups have already filed lawsuits over the adequacy of BLM’s Environmental Impact Statement for ANWR leasing and are likely to seek a court injunction if BLM proceeds with the sale.

However, if the sale is held before Trump leaves office companies bidding for tracts could establish property rights that could be a complication for the incoming Biden administration. The new administration could make it difficult for companies to secure permits to develop any discoveries made, however.

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