A state North Slope lease sales normally held in November has been postponed until January, a state official said.
Meanwhile, a federal lease sale in the National Petroleum Reserve-Alaska, or NPR-A, also typically held in late November or December is highly likely to be delayed
Similarly, a sale of leases in the Arctic National Wildlife Refuge that Interior Department officials hoped to conduct in 2020 will likely not happen. A federal law requires the Interior Department to hold a sale in 2021, however. Whether that will happen in the new federal administrated led by President-elect Joe Biden is uncertain.
The state sale – technically two separate lease sales – are “areawide” offerings of unleased state acreage in the onshore central North Slope and state-owned submerged lands in the Alaskan Beaufort Sea. These are delayed until Jan. 13, said Tom Stokes, director of the state Division of Oil and Gas.
“This is our first Northern Alaska lease sale through EnergyNet (online bids). We are using the extra time to improve data availability and GIS Geographic Information System) shape files for the EnergyNet site. Public notice is anticipated by November 20. We will have our (on-line) ‘bid openings’ at 9 a.m. January 13,” Stokes said in an email.
The U.S. Bureau of Land Management has not has not yet scheduled its normal end-of-year sale in the NPR-A, also an areawide sale. The annual sales in the petroleum reserve have been held since 2010.
No reason for the delay has been given by BLM but it could be related to uncertainties in the coming change in the federal administration after the Nov. 3 election. Low crude oil prices could discourage company participation, too. The BLM has had NPR-A lease sales in the past during low-price cycles when no bidders showed up. All three factors could discourage industry competition for leases.
However, the outcome of a ballot initiative in the Alaska Nov. 3 general election that would have raised taxed on petroleum production including on federal lands could reinforce bidding when the federal is held. Ballot Measure 1, the tax initiative, was defeated by voters.
One other consideration BLM managers could be weighing is a new land management plan has been finalized to reopen large blocks of acreage closed by President Barack Obama’s administration. The plan awaits only a final agency signature that could come at any time. Whether the outgoing Trump administration will approve the plan or leave it in limbo is unknown.
BLM is now looking at a date sometime in January, according to sources familiar with the matter. The agency must give a 30-day notice of a lease sale before it is held, Ellis said. In theory, final approval of the plan could allow newly-offered acreage to be offered in a lease sale, but it seems unlikely given the stiff opposition from conservation groups opposed to leasing lands that would be reopened in the new land plan.
The new land plan would open areas in the northeast part of the reserve that are considered highly prospective for discoveries but that were closed by former Interior Secretary Sally Jewell to protect sensitive wildlife habitat. Richard Garrard, an exploration geologist familiar with the NPR-A, said industry could be very interested in the area if it is offered.
Some of these lands were leased in years of the Bush administration prior to Obama, Garrard said. Exploration wells were also drilled prior to the closure by Jewell. There’s now new interest among companies, Garrard said, because seismic data recently made available by the state of Alaska shows indications that the promising Nanushuk geologic formation, in which companies have made major discoveries on nearby lands, extends through the area that could be made available.
“Interest in the leasing and development of the NPR-A remains generally strong. In 2019 BLM had one of its most successful NPR-A sales in recent years, generating $11,268,709,” BLM’s Ellis said.
As for the Arctic National Wildlife Refuge, a Record of Decision on leasing was signed in August. BLM may be holding off on the sale because of uncertainties over industry interest in bidding. Geologists say ANWR’s coastal refuge is highly prospective for discoveries but the change in federal administration will give companies pause because of opposition to drilling in the refuge among many of President Biden’s supporters. Although ANWR is managed by the U.S. Fish and Wildlife Service the BLM was given responsibility to carry out lease sales under the 2019 federal tax act, which included provisions allowing leasing in the coastal plain, the part of the refuge most prospective for discoveries.
Lawsuits have already been filed by conservation groups seeking to block ANWR lease sales. Polar bear protection is one of the major points at issue. The major challenge is the ability of companies to spot polar bear dens as they are exploring in winter. Polar bears are protected under federal law and procedures used to spot dens in winter, when they are snow-covered, are considered ineffective in terrain of the coastal plain.