By Kennedy Maize
Donald Trump’s empty “drill, baby, drill” mantra has come up short just days before he will be sworn in as U.S. president. A long-stymied auction for the right to drill for oil on Alaska’s Arctic National Wildlife Refuge (ANWR), ordered by 2017 tax legislation Congress passed at Trump’s urging, has drawn no bidders.
The Alaskan coastal plain has large, well-known oil resources. The 1.5 million-acre site, known as the 1002 area, is flat land located at the foot of the impressive Brooks Range that dominates the 19 million-acre refuge. The 1002 area is not wilderness. It was once home to a U.S. miliary distant early warning outpost, with its large dish antenna the only remaining artifact.
The coastal plain is habitat for significant wildlife, including polar bears, migrating caribou, and numerous local and migratory bird species, prompting many regional and national environmental groups to oppose oil exploration and production. An Athabaskan Indian tribe not located on the coastal plain but in the mountains in nearby Canada, the Gwich’n, views the as a sacred hunting ground and opposes oil development.
Native Alaskans, the Iñupiat, who make up most of the local population, including the town of Kaktovik (pop. 283), have long supported oil drilling in their backyard as needed economic development. Drilling has been contentious for over 50 years. Congress finally settled the dispute by ordering the Interior Department to hold a lease sale.
The Interior’s Bureau of Land Management announced on Wednesday (Dec. 8) that it had received no bids for the right to drill. Interior noted, “The expired deadline to submit bids concludes the second congressionally mandated sale required by the 2017 Tax Act, which directed the BLM to hold two lease sales in the Coastal Plain within seven years of enactment. The first sale, held by the previous administration, similarly demonstrated low interest, yielding a total of $14.4 million in high bids on 11 tracts. Congress included the two lease sales in the Tax Act on the grounds that they would generate approximately $2 billion in revenue over 10 years.”
The agency added, “Of the nine leases sold during the previous Administration’s sale, the two held by oil companies were canceled and refunded at the request of the lessees, and the remaining seven, held by the Alaska Industrial Development and Export Authority, were canceled by Secretary of the Interior Haaland due to the multiple legal deficiencies in the underlying record. There are currently no existing leases in the Coastal Plain.”
In this week’s sale, Interior offered 400,000 acres for lease, holding about 1 million acres off the auction block for habitat protection. The oil industry griped that the sale would have been more successful had the entire acreage been up for bids, but there is little evidence to suggest that excuse is true.
The New York Times reported, “Several major banks have said they would not finance any projects in the refuge. Drilling there would be difficult and costly because there are no roads or facilities.” Arctic drilling is particularly difficult and costly. Rigzone.com commented, “The high costs and challenges of Arctic oil development — most vividly demonstrated by Shell Plc’s struggles to mount exploratory drilling in the Chukchi Sea more than a decade ago — led energy companies to forfeit drilling rights in US Arctic waters north of Alaska too, despite the potentially 27-billion-barrel bounty.”
According to the Poynter Institute’s “POLITIFACT” service, as of the end of 2023, there were 6,653 inactive BLM oil and gas drilling permits on federal lands.
Laura Daniel-Davis, acting Interior under secretary, said, “The BLM has followed the law and held two lease sales that have exposed the false promises made in the Tax Act. The oil and gas industry is sitting on millions of acres of undeveloped leases elsewhere; we’d suggest that’s a prudent place to start, rather than engage further in speculative leasing in one of the most spectacular places in the world.”
The oil industry is driven by profits, not production that drives down prices. Bloomberg recently reported, “U.S. shale executives largely backed Trump in the election, but they may take a different view of production prospects. During the past five years, they’ve departed from the ‘drill, baby, drill’ days of the 2010s, when they burned through $350 billion of investor cash and parked two price wars with OPEC that resulted in dozens of bankruptcies.”
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