Biden administration cancels state-owned oil leases in Arctic National Wildlife Refuge

The Interior Department announced Wednesday it will cancel the last remaining oil leases in the Arctic National Wildlife Refuge and move to restrict drilling on 13 million acres in the National Petroleum Reserve-Alaska.

The Biden administration asserts the ANWR lease sale held in 2021, in the final days of the Trump administration, violated federal law.

The Alaska Industrial Development and Export Authority, a state agency, was the sole owner of the 10-year leases covering 365,000 acres in the refuge’s coastal plain, after two private companies dropped the only other leases acquired in the sale.

Interior Secretary Deb Haaland, speaking to reporters Wednesday, said the Arctic refuge is like no other place on Earth and needs to be protected. It supports millions of migratory birds, polar bears and caribou herds sought by local Alaska Native hunters, she said.

“Climate change is the crisis of our lifetime and we cannot ignore the disproportionate impacts being felt in the Arctic,” Haaland said. “We must do everything within our control to meet the highest standards of care to protect this fragile ecosystem.

“With today’s action, no one will have rights to drill for oil in one of the most sensitive landscapes on Earth,” she said.

A Republican-led Congress approved drilling in the 2017 Tax Cut and Jobs Act. But the 2021 lease sale generated no bids from major oil companies during a period of relatively low oil prices, strong opposition from conservation groups, and with many major banks saying they would not finance new oil and gas projects in the Arctic.

The Biden administration says the Trump-era Interior department did not perform a sufficient environmental analysis for the leasing program under the National Environmental Policy Act, among other flaws.

AIDEA, the state agency holding the remaining leases, said in a statement the cancellation of its leases is illegal and will be followed by court action to uphold them.

“This latest action by the Department of the Interior shows arbitrary disregard for federal law, based on campaign trail rhetoric,” said AIDEA executive director Randy Ruaro. “Campaign promises are not enough to justify this agency action. Under the law, Interior must present real facts and reasons that support this reversal in position.”

Alaska Republican Gov. Mike Dunleavy also said the state will likely take the Biden administration to court over the decision. Other Alaska officials, including the state’s bipartisan congressional delegation and North Slope Alaska Native leaders, joined in blasting the announcement.

“It’s difficult to express our utter shock and disappointment of Secretary Haaland’s decision today. We live in the Arctic! We are the Arctic! And for you to tell us about our region in the name of climate change is outrageous!” Charles Lampe, president of the Kaktovik Iñupiat Corp., said in a statement.

Environmental groups and Alaska Native Gwich’in leaders, who have long fought oil development in the refuge, lauded the Biden administration’s moves.

Bernadette Demientieff, head of the Gwich’in Steering Committee, said AIDEA’s leases were “economically infeasible, unlawful, and threatened the Porcupine Caribou Herd and the Gwich’in way of life.”

She also urged the Biden administration to repeal the oil and gas program and permanently protect the refuge.

Second lease sale still required

Previously, the Biden administration had temporarily suspended AIDEA’s leases, which the agency challenged in court. However, a court last month effectively said that lawsuit was premature.

The Interior Department on Wednesday said it would release a draft supplemental environmental statement analyzing the potential impact of oil drilling in the Arctic refuge, with a 45-day public comment period.

The law requires a second lease sale in the refuge to be held by Dec. 22, 2024, for companies that might want to pursue drilling there.

In the call with reporters, a senior administration official said the Biden administration will follow the law.

But Alaska Republican Sen. Lisa Murkowski on Wednesday suggested the Biden administration’s actions will deter future bids.

“Oddly enough, he’s canceled the (leases) that are in the first round and yet somehow seems to think that he’s gonna move forward with a second, which is incredible to think that people are going to trust this administration on anything related to oil in Alaska again,” she said of Biden in an interview.

Additionally, the department on Wednesday announced it is proposing a rule to limit oil and gas leasing on 13 million acres of the National Petroleum Reserve-Alaska, more than half the reserve. The lands are designated as special areas and provide important habitat for grizzly and polar bears, caribou and hundreds of thousands of migratory birds, the agency said.

Haaland said the administration is providing “maximum protection” for those lands, including 10.6 million acres where Interior is proposing an outright prohibition on new leasing.

The Interior Department had in March announced plans to pursue the additional protections in the petroleum reserve. At the time, the agency also added protections to block offshore drilling in the federal waters of the Beaufort Sea. Those announcements came a day before the administration approved ConocoPhillips’ $8 billion oil development project, Willow, in the reserve.

The proposed rule for the NPR-A would require the Bureau of Land Management to gather public input every five years, or less, on whether additional special areas should be expanded or created. New resources could also receive additional protections in the process. The public will have 60 days to comment on the proposal.

The proposal adds to steps taken by the Biden administration to reverse efforts under Trump to put millions more acres in the reserve on the table for leasing.

Haaland said dozens of Indigenous communities rely on the petroleum reserve to harvest caribou, birds and fish.

“We must honor those communities and their reliance on this pristine landscape,” she said.

“The actions we are taking today to protect America’s Arctic are significant and vitally important to safeguarding these lands for future generations,” Haaland said. “Public lands belong to all Americans, and there are some places where oil and gas drilling and industrial development simply do not belong.”

‘Deeply frustrated’

Conservation groups, which had strongly criticized the Biden administration earlier this year for its approval of the Willow oil project in the petroleum reserve and challenged that decision in court, welcomed the news about the canceled lease sales in the Arctic refuge.

Wilderness Society president Jamie Williams said the move helps protect the Arctic lands and the climate.

“It is nearly impossible to overstate the importance of today’s announcements for Arctic conservation,” Williams said in a statement.

Karlin Itchoak, The Wilderness Society’s senior regional director for Alaska, said, “we are grateful to the Biden administration — which has shown a strong commitment to conservation and Indigenous rights — for taking these meaningful steps.”

Itchoak added that another lease sale in the refuge “can be overturned only by an act of Congress,” and called on Congress to do so.

However, Alaska’s Democratic congresswoman, Rep. Mary Peltola, said she is “deeply frustrated” by the canceled leases and said she will continue to advocate for Alaska resource development and permitting reform.

“This administration showed that it is capable of listening to Alaskans with the approval of the Willow Project, and it is some of those same Iñupiat North Slope communities who are the ones that are most impacted by this decision,” she said in a statement.

Alaska Republican Sen. Dan Sullivan in a statement called the Biden administration’s policy moves “a war on Alaska” that “is devastating for not only Alaska but also the energy security of the nation.”

In an interview Wednesday, Sullivan added, “who the hell in their right mind would invest money in a lease sale when they just watched the first lease sale get yanked?” calling it a “legal charade” and “complete abdication of following the rule of law.”

Kara Moriarty, president of the Alaska Oil and Gas Association, echoed that sentiment in a statement, saying the Biden administration “is sending mixed messages about their energy policy in Alaska.”

“The constant barrage of government regulation changes and whipsaws tells investors that Alaska is not a place to do business,” Moriarty said.

Alaska Gov. Dunleavy said in a statement the state will turn to the courts “to correct the Biden administration’s wrong.”

“It’s clear that President Biden needs a refresher on the Constitution’s separation of powers doctrine,” Dunleavy said. “Federal agencies don’t get to rewrite laws, and that is exactly what the Department of the Interior is trying to do here.”

Alex DeMarban reported from Anchorage and Riley Rogerson reported from Washington, D.C.