Mandated ANWR lease sale challenged by politics

  • The coastal plain of Alaska’s Arctic National Wildlife Refuge is seen in this file photo. Although a lease sale is mandated for the ANWR coastal plain under 2017 legislation, the upcoming presidential election and multiple court challenges along with depressed energy markets may ultimately decide its fate. (Photo/File/AP)

The window for the Trump administration to hold an effective lease sale for the Arctic National Wildlife Refuge coastal plain could be closing, but the potential for an administration change in January alone can’t change the requirement for one.

That’s because executing a coastal plain oil and gas lease sale in strict accordance with the Tax Cut and Jobs Act of 2017 means doing so “in a manner similar” to the way lease sales are handled for the National Petroleum Reserve-Alaska on the western North Slope, as directed by Congress in the law.

NPR-A lease sales held typically in early December are preceded by a call for nominations, in which the Bureau of Land Management attempts to gauge industry’s interest in leasing acreage in the reserve at a given time. The 30-day call often starts in early August so bureau officials have time to review the comments, determine what will be offered and get the administrative wheels turning ahead of the late-fall sale.

Interior officials repeatedly said during the two-year environmental impact statement process that a sale would be held in 2019, but that date has subsequently been pushed back. Interior Secretary David Bernhardt said the first sale would be held by December 2021 when he signed the record of decision for the environmental review of the sale Aug. 17. A second would come by the end of 2024.

However, for the sale to generate legitimate interest companies likely need to have some prospect of political stability given the constant tug-of-war between the parties over what to do with the coastal plain, according to industry analysts and Interior officials involved in the work.

An Interior Department spokeswoman did not respond to questions in time for this story.

Holding a sale without a call for nominations is an option to get it done ahead of the Nov. 3 election, but that could open the department up to additional legal challenges given the directive from Congress for the process to mirror that from the NPR-A.

A sale held shortly after a Nov. 3 win by President Trump would be the best scenario for Republicans and industry advocates, as it would keep them in control of the development process for at least another four years.

And while it’s generally believed that a sale held after a Joe Biden victory — either pre- or post-inauguration — would be of little value given Democrats’ vow to reverse or effectively nullify the tax rider, it would not be the end of the story, either.

Democrats also need to maintain control in the House and as well as take over the Senate to truly overturn the legislation authorizing the coastal plain leasing program, which was inserted in the tax bill so it could be passed with a simple majority vote and avoid the traditional 60-vote threshold in the Senate for non-budget legislation.

Otherwise, if the Biden administration were to attempt to stall the congressionally mandated lease sale program — the tax bill calls for two sales of at least 400,000 acres each by 2027 — with a Republican-controlled Senate, the fight over development of the coastal plain would likely move to confirmation hearings and votes over administration appointments.

Alaska Oil and Gas Association CEO Kara Moriarty said she has absolutely no idea what the industry’s interest will be in the coastal plain if or when a sale is held given all of the political and economic factors at play.

While some companies may be limited by the amount of capital they have to immediately invest in obtaining leases with currently depressed energy markets, companies will not be making the decision of whether or not to bid in an ANWR sale based on current markets, Moriarty emphasized, as oil production from the area is at least a decade away.

She also noted that a lease does not come with a license to drill and additional permitting would be required for any on-the-ground activity.

“There is absolutely no harm in offering a lease sale,” Moriarty said.

Many observers believe that while the fight over exploration in the coastal plain garners the national attention, the nearly-completed overhaul of the land-use plan for the NPR-A — aimed at opening more of the western Slope to development — will attract much more interest from industry given the recent large Nanushuk formation oil discoveries made in the area.

However, all of the political permutations are largely rendered moot if the BLM’s environmental impact statement for the coastal plain leasing program can’t hold up in court, and it’s getting plenty of scrutiny.

The Gwich’in Steering Committee, a group of leaders from Interior Alaska Native villages, and a coalition of conservation groups sued Bernhardt and Interior agencies Aug. 24 in part for failing to consider the cumulative impacts of development in the environmental review of the lease sale.

The Tribal governments of the communities of Arctic Village and Venetie also sued Interior Sept. 9, alleging agency officials ignored the impact that disruption of the Porcupine caribou heard, which calves on portions of the coastal plain, could have on residents of the villages that are outside of the immediate development area.

The attorneys general of 15 states took their shot at Interior as well Sept. 8, filing a joint lawsuit to stop the leasing program. The states — from across the country — contend the Trump administration did not analyze a sufficient range of leasing alternatives in its review and, among other things, did not consider the contribution the oil produced from the coastal plain could have on the climate.

The Justice Department has not yet responded to the complaints.

Elwood Brehmer can be reached at [email protected].

09/16/2020 - 9:34am