The Alaska Industrial Development and Export Authority has filed a lawsuit in federal court in Washington, D.C., contesting the Biden administration’s September 6th decision to annul seven oil and gas leases within the Arctic National Wildlife Refuge. This region, spanning 19 million acres, is a haven for diverse wildlife, including grizzly and polar bears, snowy owls, and caribou, and is significantly impacted by climate change.
The state agency, which held the leases before their cancellation, is urging the U.S. District Court for the District of Columbia to reinstate them. They assert that the federal government’s actions contravene a specific Congressional mandate outlined in a 2017 tax bill, which aimed to open up the Arctic for drilling.
Governor Mike Dunleavy, a Republican from Alaska, issued a statement, expressing his concerns over the federal government’s efforts to curtail the state’s self-sufficiency. The U.S. Interior Department has declined to comment on the matter.
The canceled leases were originally sold during the closing days of the Trump administration, marking the culmination of a long-standing campaign by Alaskan officials to pave the way for drilling in the Arctic refuge. The hope was to bolster the state’s economy, heavily reliant on the petroleum industry.
The Alaska Industrial Development and Export Authority emerged as the sole bidder for most of the acreage after major oil and gas companies chose to abstain from the 2020 sale, which generated approximately $14.4 million. This was a far cry from the 2019 Congressional Budget Office’s estimate that two auctions in the refuge over a decade could generate up to $1.8 billion in bids.
While it is believed that the refuge’s coastal plain could contain up to 11.8 billion barrels of oil, the region lacks roads, established trails, or any other infrastructure. These factors, coupled with oil market volatility, legal challenges, and political uncertainty regarding the transition between presidential administrations, likely deterred drilling companies from participating.
In September, the Interior Department justified the cancellation of the remaining seven leases, asserting that the previous administration’s lease sale was fundamentally flawed and failed to consider climate change impacts resulting from oil and gas production in the North Slope.
The lawsuit filed on Wednesday contends that these concerns do not validate the Interior Department’s actions, as the 2017 tax law did not grant the agency the discretion to evade such impacts by withholding the issuance of leases.
