Biden administration to cancel Alaska oil drilling rights sold by Trump
(Bloomberg) – The Biden administration is taking steps to thwart oil development in remote reaches of Alaska by canceling leases to drill in the Arctic National Wildlife Refuge and setting up plans for more conservation in the state’s petroleum reserve.
The moves come in the wake of the administration’s decision to approve ConocoPhillips’s 600 MMbbl Willow oil project in the National Petroleum Reserve-Alaska. The initiatives announced Wednesday target territory in northern Alaska, long prized for its oil and gas potential.
The Interior Department is canceling leases sold in a January 2021 auction of parcels in the Arctic National Wildlife Refuge’s Coastal Plain that was mandated by Congress, Interior Secretary Deb Haaland said Wednesday. In 2017, Congress mandated two sales of Coastal Plain leases by the end of next year, to pay for tax cuts.
Haaland said the cancellation comes after the department found the Trump administration’s environmental review of the 2021 sale of leases in ANWR’s Coastal Plain was inadequate and not legally defensible. Biden had earlier ordered the suspension of those leases while Interior reviewed the sale.
The affected leases are held by the Alaska Industrial Development and Export Authority, the state’s economic development agency. Another lease sold in the auction had already been forfeited by Regenerate Alaska Inc.
Although it would take years to develop the leases and produce any oil and gas from the tracts, the moves appear to run counter to Biden’s earlier demands that U.S. oil companies boost output. And the announcement is set to follow Saudi Arabia’s decision to prolong a million-barrel-a-day oil supply curb into December that sent the global oil benchmark above $90 a barrel.
The initiative will not affect existing leases in the reserve, including at ConocoPhillips’ Willow project. Yet the effort is likely to inflame tensions with oil industry leaders and their allies on Capitol Hill, who argue the administration is unfairly constraining energy development in the Indiana-sized reserve set aside for oil supply needs roughly a century ago.
