2019 Arctic Leasing Plan Stalled

Analysis2019 Arctic Leasing Plan StalledAs the end of the year nears, its good news for taxpayers that leasing in the Arctic won’t happen, at least for now.

Energy & Natural Resources,  | Analysis
Dec 11, 2019  | 2 min read | Print Article

The DOI has been working to lease a part of ANWR known as the 1002 Area, a 1.6-million-acre swath of land within the refuge for oil and gas exploration and development.

In a November interview with Reuters news, the Secretary of the Department of the Interior (DOI) David Bernhardt implied the DOI would not likely be conducting its oil and gas lease sale in within the Arctic National Wildlife Refuge (ANWR) in calendar year 2019, as previously planned. Later DOI confirmed it would not happen in 2019 and as the year end approaches, the lease sale appears less and less likely.

The 1002 area gets its name from section 1002 of the Alaska National Interest Lands Conservation Act (ANILCA) which directs DOI along with state and tribal entities to study the region for possible energy development. Congress was reticent to open up the 1002 Area to oil and gas leasing because of the huge liabilities associated with development in a remote, inhospitable, and ecologically sensitive region.

The ANWR sales were authorized based on the assumption the DOI  would generate $1 billion in revenue as a pay-for for the Tax Cut and Jobs Act, the measure that brought sweeping changes to the tax code in 2017. Our own analysis of potential revenues from leasing the 1002 Area shows the $1 billion-dollar figure to be nothing but a pipe dream. Realistically, taxpayers can expect $41.6 million, at most, from oil and gas leasing in ANWR. That is just 4.6 percent of projected revenues.

According to Secretary Bernhardt, the DOI is still working on its record of decision regarding the first sale. Publication of the record of decision will likely be followed by a 30-day comment period for the public to provide input on DOI’s plans.

TCS will continue to follow the Interior Department’s leasing of the ANWR 1002 Area in 2020 as the story develops.