AIDEA approves up to $20 million for potential Arctic refuge oil lease bids

The board of the state-owned Alaska Industrial Development and Export Authority voted unanimously Wednesday to spend up to $20 million to prepare and possibly submit bids in an upcoming oil lease sale in the Arctic National Wildlife Refuge.

The Bureau of Land Management, which will administer the sale, is required to hold it in December under provisions of a 2017 law signed by former President Donald Trump.

The board’s approval had been expected. AIDEA was one of three successful bidders in a prior 2021 sale, acquiring seven 10-year leases covering 370,000 acres in the refuge’s coastal plain.

President Joe Biden and his administration oppose that sale and canceled its results. The corporation is challenging that cancellation in court while it prepares for a second round of bidding. Thus far, the BLM has not published details for the upcoming sale.

While Wednesday’s vote allows AIDEA staff to prepare bids, board chair Dana Pruhs told AIDEA executive director Randy Ruaro that he expects a presentation to the board at its December meeting “before actually pulling the triggers.”

Other board members did not speak before the vote, which followed a three-hour, closed-door executive session.

Drilling in the refuge is strongly opposed by environmental groups and residents of Arctic Village, who live south of the refuge but hunt caribou that inhabit the area.

No public testimony preceded Wednesday’s vote, but several opponents said afterward that they were listening by phone and unable to offer testimony because of a problem with AIDEA’s phone line. Many submitted written comments in opposition.

Drilling is supported by residents of Kaktovik, the community within the refuge, as well as the government of the North Slope Borough, the Alaska Legislature and Gov. Mike Dunleavy.

Ruaro told the board that even though the Biden administration clearly opposes drilling as well, the law requires a sale, and the Interior Department has said it will hold one.

“We would not be surprised, given the actions of BLM and the Department of Interior to date, if there were some conditions placed into the sale that would make it virtually impossible to develop ANWR. It wouldn’t surprise us,” Ruaro told the board. “We’re hoping they don’t do that, but we have valid leases that they arbitrarily canceled. So we’re not really putting a lot past them, but we think there will be a sale.”

Before the 2021 lease sale, former Gov. Frank Murkowski urged AIDEA to act as a backstop in case oil companies were uninterested in drilling within ANWR.

After Wednesday’s meeting, Ruaro said it’s too soon to say whether AIDEA will play that role again. It may find a business partner to do a cooperative bid on some tracts, he said.

ANWR is worth pursuing because of its oil potential, Ruaro said.

“We think there are basically large reservoirs over there that make sense to develop. They’re economic to develop, and they would provide jobs and revenue for the state,” he said.

A successful bid could allow AIDEA to conduct surveys that would reveal the area’s oil potential, encouraging development. Even if no oil companies are interested in ANWR right now, a successful find could change that.

Development in ANWR could also encourage similar drilling on nearby state lands by extending the network of petroleum pipelines across the North Slope.

“We would be preserving the ability to develop what we think is a very highly potential area for billions of barrels of development,” Ruaro said. “Development in ANWR could be part of a larger series of developments on both state land and in state offshore waters.”

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