In the middle of November 2020, the Trump administration advanced plans to auction drilling rights in the U.S. Arctic National Wildlife Refuge (ANWR) before the inauguration of President-elect Joe Biden, who has vowed to block oil exploration in the rugged Alaska wilderness.
The rush to lease vast tracts inside the refuge’s 1.56-million-acre coastal plain to petroleum companies was another part of Trump’s end-game after he lost the presidential election.
Trump’s advisers’ figured that if the administration sold drilling rights first before Biden takes office on January 20, it would be very difficult to get the formally issued oil and gas leases on government lands reversed.
Well, as it turns out, the federal government’s first-ever sale of oil leases in the Arctic National Wildlife Refuge (ANWR) raised a grand total of $14.4 million in bids, with the majority of the winning bids submitted by the Alaska Industrial Development and Export Authority – owned by the state of Alaska.
Lease sale a big failure
The government received bids on just 11 of the 22 tracts available, and nine of those tracts were purchased at the legal minimum of $25 per acre by the Alaska Industrial Development and Export Authority, according to Reuters.
The 11 tracts amounted to about 550,000 acres out of about 1 million offered. Most of the tracts totaled about 50,000 acres and went for a bit over $1 million. Interior Department deputy secretary Katharine MacGregor called the lease sale a “success.”
The oil lease sale -while generating around $14.4 million in high bids, was actually a huge failure and a direct rejection by the oil and gas industry of one of President Donald Trump’s signature efforts to expand fossil fuel development in the U.S.
The Congressional Budget Office estimated in 2019 that the lease sales would bring in $1.8 billion over a decade. The Anchorage Daily News reports that “the money raised on Wednesday fell far short.”
Major oil companies held back on bidding
Alaska’s top three oil producers, ConocoPhillips, ExxonMobil, and Hilcorp, the owners of the large Prudhoe Bay oil field west of the refuge, didn’t even bother to submit bids. Two small, independent oil producers, Knik Arm Services LLC and Regenerate Alaska Inc won two, of the 11 tracts sold.
It is questionable if the companies who won the leases will be able to go any further in developing the tracts because six of the biggest American banks and five biggest Canadian banks have all pledged not to finance drilling in the refuge, reports EcoWatch.
“This lease sale was an epic failure for the Trump administration and the Alaska congressional delegation,” Adam Kolton, executive director of the Alaska Wilderness League, said in a statement.
Canada’s Minister of Environment and Climate Change, Jonathan Wilkinson, in a statement also voiced “serious concerns” about the impact of possible oil and gas development on a herd of Porcupine caribou that roams northeastern Alaska and northwestern Canada.
Remember those 2017 tax cuts? Well, U.S. Senator Lisa Murkowski pushed for the sale of the ANWR oil leases as part of the Trump administration’s plan to pay for its 2017 tax cuts based on expectations that the sales and oil extraction would net the Treasury $1.8 billion over 10 years.
