Biden Administration Suspends Alaska Coastal Plain Oil, Natural Gas Leasing Program
By Andrew Baker
The Department of the Interior (DOI) on Tuesday suspended the Coastal Plain Oil and Gas Leasing Program launched by the Trump administration in Alaska’s Arctic National Wildlife Refuge (ANWR).
The order signed by DOI Secretary Deb Haaland halts “all activities related to the implementation of” the program, including leases awarded in the program’s first and only sale on Jan. 6 in the waning days of Trump’s presidency.
Activities are suspended “pending completion of a comprehensive analysis under the National Environmental Policy Act,” otherwise known as NEPA, according to DOI.
Haaland has ordered DOI to conduct an analysis of the program’s potential environmental impacts, “and to address legal deficiencies in the current leasing program’s environmental review under NEPA.”
The January sale produced underwhelming results, with just 11 of the 22 tracts on offer receiving bids, and no household names among the three bidders.
Nine areas covering more than 430,000 acres were awarded, with seven of the tracts going to the state-owned Alaska Industrial Development and Export Authority. Knik Arm Services LLC and Regenerate Alaska Inc. were awarded the other two. The leases last 10 years.
Two weeks later on Jan. 20, President Biden issued an executive order instructing DOI to review oil and gas activity in the ANWR.
DOI said that, “after conducting the required review, the Department identified defects in the underlying Record of Decision supporting the leases, including the lack of analysis of a reasonable range of alternatives” in the Environmental Impact Statement conducted under NEPA.
DOI also is conducting a larger review of all oil and gas leasing on federal property, both on land and offshore, with new lease sales halted in the interim.
The American Petroleum Institute (API) expressed dismay at the suspension of the ANWR program and of efforts to curtail federal leasing more broadly.
“Our industry is committed to tackling climate change while safely and responsibly producing American energy,” said API’s Kevin O’Scannlain, vice president of Upstream Policy, in an emailed statement to NGI. “We urge the administration to listen to the majority of Alaskans who want the opportunity to develop these important energy resources domestically, and recent NEPA analysis which shows that ANWR can be developed in an environmentally responsible manner.”
He added, “Policies aimed at slowing or stopping oil and natural gas production on federal lands and waters will ultimately prove harmful to our national security, environmental progress and economic strength.
“At a time of economic recovery, this action only serves to withhold the good-paying jobs and economic revenue that safe and responsible oil and gas development would provide to local Alaskan communities.”
A recent API analysis found a long-term moratorium on federal leasing would cost Alaska an estimated 3,500 jobs and $24 million in revenue.
The extent to which the Biden administration would curtail federal leasing remains unclear.
Wood Mackenzie’s Justin Rostant, principal analyst for the U.S. Gulf of Mexico, told NGI last month, “I don’t think that the leasing program coming out is going to be an outright ban.” He explained that such a ban via executive order would likely be in conflict with existing laws requiring the federal government to make its oil and gas resources available to the public, and would therefore be vulnerable to legal challenges.
What’s more likely, he said, is that the government would make federal leasing less attractive for operators through measures such as increased royalty rates and more stringent environmental requirements.
More than a dozen states already have sued the Biden administration over its pause on federal leasing, citing violation of the Outer Continental Shelf Lands Act and the Mineral Leasing Act.
Analysts at ClearView Energy Partners LLC said after a recent Senate hearing on offshore energy production that they expect the Biden administration “to end or substantially curtail onshore and offshore fossil energy leasing.”
Environmental groups, meanwhile, have welcomed the scrutiny of federal leasing.
The nonprofit Alaska Wilderness League praised Tuesday’s ANWR action, but said more work is needed.
The group’s acting executive director, Kristen Miller, said the ANWR is “one of the last great expanses of untouched wilderness areas in America.” She called the lease sale the result of a “flawed and legally deficient process that must be reversed.
“Until the leases are canceled, they will remain a threat to one of the wildest places left in America.”