The Trump Administration’s Mad Dash to Open up the Arctic to Drilling

ANWR, Oil & GasThe Trump Administration’s Mad Dash to Open up the Arctic to Drilling

Energy & Natural Resources,  | Quick Take
Dec 3, 2020  | 5 min read | Print Article
UPDATE: 12/3/2020, 2:40pm

Today, the Bureau of Land Management announced it will post the required Notice of Sale to auction off federal oil and gas leases in the Arctic National Wildlife Refuge (ANWR) on Monday, December 7. The announcement and publication of the Notice set the stage for the Bureau to hold the sale for leases to drill in the Coastal Plain of ANWR on January 6, 2021.

Today’s announcement comes just more than two weeks after the Bureau posted a call for nominations of tracks for the sale (see below). Typically, a Notice of Sale is only posted after the nomination period ends and the Bureau can incorporate the feedback it receives about which parcels need to be leased with special stipulations. Regulations do not mandate such diligence, however, and posting the Notice ahead of the nomination period’s end on December 17 demonstrates the Trump Administration’s aggressive push to open up the Arctic Refuge to drilling before Inauguration Day.

Leasing land to oil and gas companies in the remote Refuge is a bad idea for taxpayers. From baked revenue assumptions to faulty math, the prospects have always seemed bleak, but rushing the process at the 11th hour of the Administration during a pandemic and oil glut is blatantly irresponsible and fiscally reckless.

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On Tuesday, the Trump Administration took another step toward leasing land in the Arctic National Wildlife Refuge (ANWR) for oil and gas development. The Bureau of Land Management, which is running the ANWR leasing process, published a call for nominations of tracts of land for lease in the Federal Register. The call for nominations is a standard step in the run-up to a federal lease sale and allows the Alaska Governor, local governments, Native corporations, the oil and gas industry, and the general public to submit input on what land should be available for lease. The input can include information on environmental concerns, multiple-use conflicts, industry interest and suggestions about tract sizes and which tracts warrant special analysis. The Bureau official in charge of the sale then uses the information to put together a final Notice of Sale which lists the tracts that will be put up for auction.

The timing of the Bureau’s action suggests the Trump Administration is trying to squeeze in a lease sale before Inauguration Day – Wednesday, January 20, 2021. Unlike other oil and gas lease sales, the Bureau has already stated which tracts it wants to lease in the leasing program’s Environmental Impact Statement, namely, as much of the Coastal Plain of ANWR as it can. That might allow the Bureau to quickly post a Notice of Sale following the nominations period, which is set to run through December 17. A lease sale can only be held 30 days after the Notice of Sale is posted, which could mean the Bureau will try to post the Notice on December 18 and hold the lease sale on January 18. Rushing environmental analysis specific to certain tracts in the proposed list could open up leases issued from the sale to legal challenge.

If the sale moves forward, taxpayers stand to lose hundreds of millions of dollars. When Congress authorized leasing in the Coastal Plain of ANWR in the 2017 tax bill, it counted on generating roughly $900 million in federal revenue from auction bids. That was never realistic, and taxpayers can expect to receive just $14.7 – $27.6 million in revenue based on the average bid price per acre for onshore sales in the Arctic region over the last five years. The difference will directly add the budget deficit, and the liabilities associated with drilling in the remote Arctic mean taxpayers may have to pay even more later. Drilling in ANWR to raise revenue now was always a façade, and rushing the process, during a pandemic with an oil production glut will only increase the risk to taxpayers.

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