Alaska development agency sues federal government over canceled Arctic oil leases

Alaska’s industrial development agency on Wednesday sued the Biden administration in an attempt to revive its Arctic National Wildlife Refuge oil and gas leases.

The lawsuit filed by the Alaska Industrial Development and Export Authority alleges that the U.S. Department of the Interior violated federal laws and its own regulations when it canceled refuge leases last month.

Interior’s actions were politically motivated and illegally deprived AIDEA and the state of the economic benefits that would come from drilling in the refuge’s coastal plain, an area that is known to contain oil, the lawsuit argues.

“Cancellation of the lease agreements eliminates AIDEA’s property rights in exploring and developing these leases and prevents all of the expected benefits that would have come from developing an oil and gas program on these lands, seriously harming AIDEA,” said the lawsuit, filed in U.S. District Court in the District of Columbia.

AIDEA was the main bidder in the ANWR lease sale held in January 2021 as one of the Trump administration’s last actions. One small oil company and one Anchorage real estate company submitted the only two other bids.

Ultimately, the authority wound up with seven leases in the refuge coastal plain and was the last entity holding leases there. The other two participants canceled their bids last year and were refunded.

The debate over oil drilling in the Arctic refuge has raged for decades. Supporters of drilling, including most Alaska political leaders, have argued that the area would provide valuable oil supplies. Opponents say oil development would irreparably damage the environment, including the Porcupine caribou herd, a huge herd that crowds into the narrow coastal plain each year to give birth to its young.

The 2021 lease sale, mandated through the Tax Cuts and Jobs Act of 2017 signed by then-President Donald Trump, was the first competitive auction of exploration rights there.

The sale failed to draw any bids from major oil companies.

President Joe Biden, in an Inauguration Day order, temporarily barred any exploration work on the ANWR leases. That was followed by action in June 2021 by Interior Secretary Deb Haaland that suspended the leases and launched a new study of environmental impacts from oil development in the refuge coastal plain.

Although the leases sold in 2021 are now canceled, the environmental analysis continues for a supplemental environmental impact statement.

AIDEA’s lawsuit over the canceled leases follows an unsuccessful legal attempt by AIDEA to reverse Interior’s earlier suspension of exploration activity on the leases. On Aug. 3, U.S. District Court Judge Sharon Gleason ruled that Interior had the legal right to impose such restrictions.

In an AIDEA statement that noted the lawsuit was filed on Alaska Day, the state holiday marking the transfer of the then-territory from Russian to U.S. governance, Alaska political leaders praised the action.

“The federal government is determined to strip away Alaska’s ability to support itself, and we have got to stop it,” Gov. Mike Dunleavy said in the AIDEA statement. The federal government “is focused on trying to stop our ability to produce oil and gas,” he said.

“The State of Alaska will continue being bold in defending our rights. We will not allow illegal actions to occur against Alaska and I fully support this lawsuit,” he concluded.

U.S. Sen. Lisa Murkowski, R-Alaska, who worked on the portion of the 2017 law that mandated the lease sale, also supported AIDEA’s action.

“This lawsuit wouldn’t be necessary had the Biden administration followed the law that I drafted, consulted with the Alaska Natives who actually live on the North Slope, or simply acted in America’s best interest,” she said in the statement.

The Interior Department press office declined to comment on the new lawsuit.

However, opponents of oil development in the refuge criticized AIDEA for trying to pursue a development idea that they said has already been rejected by the oil industry.

AIDEA “is not an oil company,” said Sarah James of the Gwich’in Steering Committee, which represents Alaska and Canadian tribes opposed to oil development in the refuge. As for the oil companies, “they’re not interested,” she said. “They’re not buying any leases.”

James, who is from the Gwich’in community of Arctic Village and was one of the early leaders of the steering committee, noted that the fight to protect the refuge from development has been waged for about 40 years.

“We’re winning,” she said. “Even during the bad times, the Trump administration, 75% of the people still didn’t want to see gas and oil up there.”

She and other drilling opponents are seeking permanent protection of the refuge’s coastal plain by barring development entirely. “It’s about time we close it up for everybody, not only for the Gwich’in, not only for the caribou, not only for the birds, but for everything,” she said.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.