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Trump Administration Paves Way for Arctic Drilling Rights Sale

Jennifer A. Dlouhy

(Bloomberg) -- The Trump administration on Thursday took a major step toward auctioning oil drilling rights across every acre of the Arctic National Wildlife Refuge’s coastal plain, hours after the House of Representatives voted to outlaw the activity.

In an environmental impact statement, the Interior Department acknowledged oil development in the refuge’s 1.56 million-acre coastal plain could affect polar bear and caribou that roam through the region. Nevertheless, the document released Thursday sets the stage for an auction later this year; it is a required legal step before the Interior Department can take bids.

The Trump administration’s proposal to open the entire coastal plain for leasing goes far beyond a congressional mandate to make at least 400,000 acres available and hold two auctions of oil and gas leases by 2021 and 2024. Congress lifted decades-old restrictions on oil development in the refuge and required the sales in 2017, as a way to pay for the tax overhaul.

The Interior Department still must make a formal decision to hold a sale, an action expected in roughly a month. The agency could offer less territory as part of that final auction plan.

“We are on track to do what Congress has asked us to do in a safe and balanced way that advances the president’s goals of job creation and energy independence with a minimal impact to the area,” Chad Padgett, Alaska state director for Interior’s Bureau of Land Management, said in a call with reporters.

Environmentalists who have vowed to fight the plans in court argue that drilling threatens to forever alter the pristine wilderness in Alaska, home to polar bears, caribou herds, migratory birds and other species. Although the environmental study lays out protections, such as buffer zones around polar bear dens and timing limitations on activity during Porcupine caribou calving season, conservationists said the safeguards fall far short of what’s needed.

“Driven by its energy dominance agenda, this administration is relentless in its mission to sell off the Arctic Refuge to Big Oil, regardless of the cost to imperiled polar bears, the Porcupine caribou herd, hundreds of migratory birds and the Gwich’in people, who have depended on these resources for millennia,” Defenders of Wildlife President Jamie Rappaport Clark said by email.

The U.S. Geological Survey has estimated ANWR’s coastal plain might hold between 4.3 billion and 11.8 billion barrels of technically recoverable crude. However, it’s not clear how much enthusiasm oil companies will have for tapping it. Relatively low crude prices could suppress interest, even though leases purchased today might not lead to exploratory drilling for several years.

Energy companies contemplating bidding on ANWR acreage also won’t have new geological data to guide their plans. And BP Plc’s decision last month to abandon its decades-long foothold in Alaska is seen as a sign of waning interest in the North Slope.

The move comes the same day the House of Representatives passed legislation that would reinstate a moratorium on oil and gas leasing in ANWR. The measure, which passed 225-193, is not expected to advance in the Senate.

To contact the reporter on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Steve Geimann

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