Alaska Gov. Mike Dunleavy vowed to defend federal oil and gas leases in the Arctic National Wildlife Refuge that are held by a state agency after President Joe Biden’s June 1 announcement that he would suspend leases in a refuge.
“Our leases for oil and gas are valid and cannot be taken away by the federal government,” Dunleavy said in a statement. “Neither the President nor the Secretary (of the Interior) are given the discretion to decide otherwise,” he said.
Dunleavy said the federal Tax Cuts and Jobs Act of 2017 requires the government to conduct lease sales, and that the state development corporation, the Alaska Industrial Development and Export Authority, lawfully acquired leases in the ANWR lease sale held by the Trump administration last January.
The U.S. Bureau of Land Management held the lease sale on January 6, 2021 and issued nine tracts with 10-year leases covering more than 430,000 acres on Jan. 19, one day before Biden became president. Seven of the nine tracts were acquired by Alaska’s state-owned development corporation, the Alaska Industrial Development of Export Authority, which was the sole bidder on the tracts. Two leases were issued to small private companies, but no major oil and gas companies submitted bids.
The Arctic refuge, known as ANWR, is in far northeast Alaska east of the large producing oil fields on the North Slope. Geologists feel the region has potential for major oil and gas discoveries, but U.S. conservation groups have fought fiercely to keep the refuge closed.
Alaska U.S. Sen. Lisa Murkowski supported the governor’s contention that an action by Biden to suspend the leases may be contrary to law. “Suspending leases in Alaska’s 1002 Area is in direct conflict with the 2017 Tax Cuts and Jobs Act, through which Congress mandates an oil and gas leasing program be established on the non-wilderness Coastal Plain (of the refuge) and ordered at least two lease sales by 2024.”
“In addition, the act specifically states that the purpose of the 1002 area of ANWR is oil and gas development,” the senator said, referring to the 1.5-million-acre coastal plain area that that was recognized by Congress for its potential for oil discoveries.
Dunleavy didn’t threaten a lawsuit but said the state would defend its leases. “I oppose this assault on Alaska’s economy and will use every means necessary to undo this egregious federal overreach,” the governor said. The state has been quick to litigate other federal actions that encroach on Alaskan interests recently.
The state development corporation, AIDEA, was sole bidder on the seven leases it won in the lease sale. AIDEA plans to hold the leases, which have 10-year terms, in hopes that industry interest will rekindle. In the 1980s large companies like BP and Chevron were keen on ANWR, and the two drilled a joint exploration well on a private inholding, the results which have been held confidential.
Alaska Congressman Don Young said the decision runs roughshod over Alaska Native people who live on the North Slope. “Make no mistake; this suspension is a grave one, not only for those employed by Alaska’s energy industry but also for the Native community of Kaktovik,” an Inupiat village on the northern border of the refuge, Young said.
“Despite being the primary stakeholders involving policy affecting their land, the pro-development voices of the Kaktovik Iñupiat continue to be ignored by those who believe they know better than the people who actually live in ANWR,” the congressman said.
Kaktovik has a direct financial stake in ANWR through its ownership of a 91,000-acre enclave in the refuge acquired through the Alaska Native Claims Settlement Act of 1971. Arctic Slope Regional Corp., of Utkiagvik, the regional development corporation, owns the mineral rights under Kaktovik’s land.
Alaska’s Native community is split on ANWR, however. Tribal groups in northern Interior Alaska who have opposed ANWR development praised the action. “The rushed January 2021 lease sale was largely seen as a failure, raising less than one percent of the forecasted revenue,’ Gwich’in tribal leaders of Arctic Village and Venetie said in a statement.
Arctic Village and Venetie are Athabascan villages south of the refuge. People in the two communities depend partly on the Porcupine caribou herd for subsistence, which migrates north into refuge lands in the summer. The concern is that oil development in the northern coastal plain, with its resulting network of pipelines and roads, would impede access by caribou to lands used in birthing.
Defenders of leasing point to the success of caribou who coexist with oil development further west, in the large Prudhoe Bay, Kuparuk River and Alpine fields.
Biden seemed to offer Alaskans an olive branch, however, with a formal approval also on Tuesday by the U.S. Interior Department for a Master Development Plan for Willow, a significant oil discovery by ConocoPhillips in the National Petroleum Reserve-Alaska, the large 23-million-acre federal enclave west of the producing North Slope oil fields.
A few days earlier the U.S. Justice Department said it would defend the U.S. Bureau of Land Management’s decision approving Willow in litigation brought by conservation groups, which signaled that Biden would not oppose the project. The approval of the master plan is a definitive statement of support, however.
Meanwhile, the President’s ANWR announcement didn’t revoke the ANWR leases but the said any further action on the leases by the Interior Department would be on hold until an environmental review is conducted.
“The Department (of the Interior) is notifying lessees that it is suspending oil and gas leases in the Arctic Refuge, pending the review, to determine whether the leases should be reaffirmed, voided, or subject to additional mitigation measures. A comprehensive analysis under the National Environmental Policy Act review of the sale will be undertaken,” the Interior Department said in its announcement.
The President himself said, “My review of the Coastal Plain Oil and Gas Leasing has identified multiple legal deficiencies in the underlying record supporting the leases including, insufficient analysis under the National Environmental Policy Act, including failure to adequately analyze a reasonable range of alternatives in the environmental impact statement,” Biden said in his June 1 order.
“Based on those identified deficiencies, the Department of the Interior will conduct a new, comprehensive analysis of the potential environmental impacts of the (leasing) program and address the identified legal deficiencies,” the president said.