By Timothy Puko
The Trump administration approved an oil leasing program for the
Arctic National Wildlife Refuge Monday, opening up the pristine
19-million-acre wilderness to drilling for the first time and
making it difficult to unwind the decision should Democrats
recapture the White House in November.
Approving the program clears the way to auction oil leases
"right around the end of the year," Interior Secretary David
Bernhardt said in an interview. The decision caps more than 30
years of efforts by oil companies and Alaskan leaders to drill in
Environmentalists have raised concerns about the impact drilling
could have on the polar bears and caribou herds that live in the
remote refuge in northeast Alaska. Congress passed a mandate to
lease oil from part of the refuge in its tax overhaul in 2017, when
both the House and Senate were in Republican control. Mr. Bernhardt
said the drilling can be conducted in an environmentally sound
manner and that Congress has set details into law that will help
the plan withstand challenges from environmentalists.
"Congress gave us a very clear directive here, and we have to
carry out that directive consistent with the directive that they
gave, and consistent with the procedural statutes," Mr. Bernhardt
said. "I have a remarkable degree of confidence that this can be
done in a way that is responsible, sustainable and environmentally
The refuge, often known by its acronym ANWR, is nearly the size
of South Carolina, nestled between the Arctic Ocean to the north
and Canada's Yukon to the east. Congress approved protections for
it in 1980, and its expansive tundra, mountains and coastal plain
are still nearly void of people and roads.
Investors question its value, however, as a source of oil,
especially in an era of lower crude prices and tepid demand. The
industry is glutted with supply world-wide, pushing companies of
all sizes to plan deep spending cuts.
The reserves in ANWR are uncertain and drilling there appears
unpopular with the public. Combined with the sheer expense of
entering Arctic wilderness for the first time, it might all chase
away several of the major companies that could afford such a
Goldman Sachs Group Inc. and Wells Fargo & Co. are among
several banks to rule out funding for ANWR drilling specifically,
and more have broadly ruled out financing for Arctic development.
BP PLC, a pioneer of Alaska oil, decided last year to sell all of
its assets in the state even with an ANWR auction pending -- only
to see the deal temporarily delayed this spring while falling oil
prices caused major banks to balk at financing the buyer, Hilcorp
Mr. Bernhardt reiterated the department's assertion oil can be
drilled in the coastal plain along the Arctic Ocean, at the
northern tip of the refuge, without spoiling the area. The Interior
Department says drilling pads, processing plants and roads needed
for drilling will take up just 0.01% of refuge's 19 million
Pipelines that hover over the ground, however, are largely not
counted toward that limit. Environmentalists contend the area
should remain in a wild state, and have held out hope that drilling
could be averted if Democrats gain the White House or attain a
majority in the Senate.
Oil development threatens wildlife and is likely to worsen
climate change, according to the Alaska Wilderness League, one of
the groups that has opposed opening the Arctic refuge to
"Our climate is in crisis, oil prices are cratering, and major
banks are pulling out of Arctic financing right and left," Adam
Kolton, the group's executive director, said in a statement Monday.
"This rush to drill would culminate in a fire sale of our nation's
most iconic wilderness."
Congress gave Interior until December 2021 to sell oil leases.
Doing so this year, locking the government into contracts with
companies, would make it harder to delay or undo the plan for
drilling in the refuge even if Democrats who oppose the plan come
into power, lawyers have said.
Mr. Bernhardt said all environmental laws were scrupulously
followed, but he also said the department moved quickly given
President Trump's support for boosting U.S. energy production.
"We take our direction from the president. The president has
been very robust on opening additional areas of federal lands, as
appropriate, to resource development," Mr. Bernhardt said. "We've
tried to hit his priorities as expeditiously as we can -- with
Drilling has long been a priority for state leaders, too, as
they seek to keep fueling an economy dependent on oil production.
Alaska has been rocked in recent years by the departure of several
major oil companies. A boom in shale drilling has drawn drillers to
easier-to-reach and less environmentally sensitive areas, and state
leaders have urgently sought ways to lure them back.
When Interior's Bureau of Land Management finished its
environmental impact statement on the project last year, Alaska's
congressional delegation and other state leaders urged Interior to
move forward quickly on leasing the refuge. Sen. Lisa Murkowski
(R., Alaska) said it would "strengthen our economy, our energy
security, and our long-term prosperity."
"This is a capstone moment in our decades-long push," Ms.
Murkowski said in a statement. "New opportunity ... is needed both
now, as Alaskans navigate incredibly challenging times, and well
into the future as we seek a lasting economic foundation for our
Mr. Bernhardt said he believes companies with a long-term vision
will bid on the prospect, even with oil prices around a 15-year
"Under [a] long-term scenario you're still looking at an
incredibly large, conventional onshore prospect that is far less
complex than many, " Mr. Bernhardt said. "And when you look at this
from a world-wide standpoint, I'm very confident there will be
people and entities who are very interested in this as an
His department's environmental impact statement said the
industry would have to develop new ways to find polar bears because
their testing systems had never been used in a place with so many
bear dens and pregnant females.
It said the potential for bear deaths and injuries "could be
high," though "the risks are generally well understood."
Write to Timothy Puko at email@example.com
(END) Dow Jones Newswires
August 17, 2020 11:06 ET (15:06 GMT)
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