Nothing is guaranteed

With just enough time to hold lease sale before leaving office, Trump administration asks fossil fuel companies to submit intent in the Arctic National Wildlife Refuge

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Fossil fuel development in the Arctic National Wildlife Refuge (ANWR) is one step closer to becoming a reality as of Nov. 17. With less than two months left in office, the Trump administration announced its intent to conduct a lease sale with a call for nominations so companies can indicate which parcels they are interested in developing despite the industry’s current financial turmoil and widespread public pressure to combat the climate crisis. The announcement comes with just enough time to meet federal regulations for public comment, while also holding the sale before president-elect Joe Biden is inaugurated in January. 

“What it looks like from my perspective is that [Secretary of the Interior] David Bernhardt is trying to throw as much sand in the gears as he can on his way out the door,” says Aaron Weiss, deputy director of Denver-based Center for Western Priorities (CWP), which has been unabashedly critical of Bernhardt’s Department of the Interior (DOI). 

Lease sales in the area have been teased for years (See News, “Drilling in an Arctic Eden,” Nov. 7, 2019), especially since an additional provision in the Tax Cuts and Jobs Act of 2017 authorized exploration and drilling. According to Bernhardt’s Interior, the “leasing program is required by law,” and this current push is by far the closest it’s come to actually occurring. 

At 19.6 million acres, roughly the size of South Carolina, ANWR was established by President Eisenhower in 1960 and to date is the largest parcel in the federal National Wildlife Refuge system. It’s largely roadless, undisturbed by human development and home to a diversity of animals including hundreds of bird species, caribou herds that migrate from Canada each year to calving grounds on the coastal plain and the endangered polar bear. 

“We’re concerned because the national wildlife refuge is one of the last intact pristine ecosystems in this country and even in the world,” says Mary Greene, public lands attorney with the National Wildlife Federation (NWF). “It provides habitat for numerous species, and oil and gas leasing is incompatible with what the refuge represents and what it preserves.” 

The drilling is proposed in a 1.56-million-acre coastal plain region, or about 8% of the refuge according to DOI. BLM estimates the area has up to 11.8 billion barrels of recoverable crude oil.

In August, the NWF, as part of the consortium Trustees of Alaska, filed a lawsuit against Bernhardt, the BLM and U.S. Fish and Wildlife Service, charging the agencies violated a host of federal laws, including the National Environmental Policy Act (NEPA), the Endangered Species Act, the National Wildlife Refuge Administration Act and the Alaska National Interest Lands Conservation Act when finalizing the final environmental impact statement (EIS) that allows the lease sales to proceed. 

“Preferably you’d have the BLM waiting to see what happened with the litigation before offering new sales, because their future is not known right now,” Greene says. “If they lose the litigation, then they may be in the position of having given lease sales that are no longer viable.” 

Will Brendza With the Brooks Range in the background, native caribou roam the Arctic National Wildlife Refuge in Alaska.

But that’s not what’s happening with ANWR. The call for nominations announced on Nov. 17 initiated a 30-day public comment period in which comments have to be sent to Alaska’s BLM state director in Anchorage by mail. No electronic comments are allowed. 

“It’s pretty malicious,” Greene says. “It’s pretty much trying to do everything it can to cut the public out of this.” 

Although the date of the lease sale hasn’t been formally announced, it could come as early as Jan. 17 (30 days after the public comment period ends), squeezing it in just before the Trump administration leaves office a few days later. 

“They are doing this faster than I have ever seen. And absolutely the idea is to get this lease sale done before the new administration,” Greene says. 

Given the extent of development required, it’ll take at least a decade before any company actually extracts oil from ANWR, according to most estimates. Plus, the prospect comes at a time of uncertainty for the oil and gas industry. 

“The ANWR opportunity is more attractive to the historical standard model for oil exploration and production a decade ago,” says Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines. “That model no longer exists.”

For one, there’s mounting public pressure to move away from fossil fuel development in light of the climate crisis. A recent Yale and George Mason universities’ poll found that 67% of Americans oppose drilling in ANWR specifically. What’s more, financial institutions are facing similar pressure to divest from fossil fuel companies. Earlier this year, Morgan Stanley joined Wells Fargo, Goldman Sachs, JPMorgan Chase and Citigroup in refusing to invest in Arctic drilling projects. 

Where the oil companies were once “heavily supported both by Wall Street and by their shareholders,” Bazilian says, “both of those enabling environments are no longer there.”

Add in historically low prices in the midst of a global pandemic and the demand outlook for the oil market is not bright. “While there will likely be a rebound from the lows due to the pandemic, the longer-term demand outlooks all show declines over the next decades — some, very substantial ones,” Bazilian says.  

Recent lease sales in the Gulf of Mexico, for example, have been scant, as fewer companies are bidding less. The Trump administration offered its final sale in the region on Nov. 18, leasing slightly more than half a million acres for $121 million. But as Sami Yahya, a senior energy analyst for S&P Global Platts Analytics, told the Texas Tribune: “Back in the 2014 era, we used to have billion-dollar auctions. We’re really scraping the bottom of the barrel here.” 

Applying this to ANWR, Weiss from CWP says, “Even if there are bidders on these lease sales, we could find them going very cheap because oil and gas companies know there are going to be a lot of barriers to actually drilling there, both regulatory and financial.”

Still, the American Petroleum Institute said the ANWR lease sale and subsequent development in the region is “long overdue and will create good-paying jobs and provide a new revenue stream for the state — which is why a majority of Alaskans support it,” according to several news outlets. 

(Alaskan support of drilling in ANWR is often cited by proponents of the plan, although it’s unclear where they get their data, and as stated earlier, the vast majority of Americans are against it.) 

There are several indigenous corporations eyeing parcels in ANWR for potential oil and gas development, despite vocal opposition from other native tribes like the Gwich’in. In October, the Kaktovik Iñupiat Corporation (KIC) applied for a seismic testing permit in the coastal plain, which could start as early as January, according to Greene, at great risk to winter polar bear dens. It still remains unclear, however, whether or not there will be financial backing to develop these fossil fuel prospects. 

“Looking at the oil and gas markets in general, I think we are in a framework of structural decline,” adds Kyle Tisdel, an attorney with the Western Environmental Law Center. “With the cost of oil and gas at what it is, it is a losing proposition to drill even in areas like the Permian Basin, which you think of as being sort of gangbusters. The proposition that you’re going to go move into ANWR, which has a far higher cost per well, the economics of this are not favorable on industry as a whole.”

The Law Center recently won an injunction on drilling in Wyoming after a federal judge ruled for the second time that the federal government didn’t adequately consider the indirect and cumulative climate impacts as required by NEPA when conducting lease sales on public lands. 

The lawsuit was filed back in 2016 challenging a handful of oil and gas sales in Colorado, Utah and Wyoming approved under the Obama administration. As a matter of process, the litigation started with 300,000 lease sales in Wyoming, before moving to the other states. In March 2019, a federal district court judge ruled in favor of environmental nonprofits, saying there were some core deficiencies in the government’s climate analysis. Essentially, “the federal government had to take a look at things at both a regional and a national scale,” Tisdel says. “You can’t look at a lease sale in isolation. This is obviously a part of a broader oil and gas leasing program. And so you’ve got to consider all of that together.” 

The Trump administration’s BLM was then required to do an EIS addressing the court’s concerns for the Wyoming lease sales, and voluntarily did so on the Colorado and Utah sales as well. But the agency rushed the process, Tisdel says, and the most recent legal win for environmental groups came on Nov. 13, when the courts ruled again that BLM did not sufficiently address climate change impacts in its supplemental EIS. 

“Because they rushed this analysis through, there were errors that were littered throughout the supplemental analysis in just simple math or failing to check themselves,” Tisdel says. Any single error could be overlooked, he continues, but the sheer number of mistakes amounted to a broad failure of the BLM in its analysis. Specifically, Tisdel says, the agency only accounted for accumulative emissions released by individual wells over one year, instead of the lifespan of the well and failed to consider other national and regional lease sales outside of Wyoming.

“The coal, oil and gas emissions off our public lands together make up about 25% of annual U.S. emissions,” Tisdel says. “You start to aggregate or add these things up and you get to a very significant picture of what these emissions mean.” 

The agency also didn’t contextualize the raw emissions data to increase public understanding, similar to what has been done by the IPCC in its analysis of the climate crisis, he adds. 

This legal theory of cumulative climate impacts has also been successfully used in a number of cases across the country challenging other Trump administration-approved oil and gas leases, resulting in millions of acres of oil and gas leases that have been invalidated by the courts, Tisdel says. In Weiss’ estimation, Bernhardt’s Interior has cut corners to such a degree that it’s lost 70% to 80% of court cases when it comes to oil and gas development on public lands. It’s a track record that — combined with campaign promises from President-elect Biden — many hope will save ANWR should the lease sale go through before Trump leaves office. 

“This is another example of rather poorly designed and transacted policies by the Trump administration,” Bazilian says. “Any companies who do take leases understand that the Biden administration can take regulatory actions that make it very unattractive.”

As part of Biden’s plan for a clean energy revolution and environmental justice, released in July, the president-elect vowed to permanently protect ANWR, while also banning new oil and gas permitting on public lands and waters. These measures could reduce the country’s greenhouse gas emissions 280 million metric tons or 5% by 2030, according to a 2018 study from the Stockholm Environment Institute that looked at the potential effects of a ban on new and renewed oil and gas leases on public lands. While these policies don’t go as far as outright banning fracking across the entire country, as suggested by the more progressive wing of the Democratic party in the Green New Deal, it would be a significant step in addressing the climate crisis. 

Will Brendza ANWR, as seen from a helicopter, “is one of the last intact pristine ecosystems in the country,” according to Mary Greene from NWF.

There’s still the fact, however, that developing oil and gas production in ANWR is part of federal legislation that can only change by an act of Congress, not the executive branch. 

 “But I do think that under the Biden administration, they certainly start at the beginning and conduct an EIS that is much more substantial,” Greene says. 

Tisdel adds that even if the lease sales do go through, they would only be conditionally granted, with the expectation that they comply with the law and a provision allowing the Interior Secretary to cancel them following environmental analysis. 

“I think, and certainly my hope would be, that we’re going to get a far more aggressive position on the management of our public lands and oil and gas leasing and development,” under Biden’s leadership, he says.  

 Although, an incoming administration will also have to deal with significantly weakened NEPA regulations pushed through by Trump’s DOI (See News, “Death by a thousand cuts,” Jan. 16, 2020), which are still facing litigation. And ANWR is not the only area the Trump administration, under its energy dominance policy, is preparing for oil and gas lease sales. BLM has scheduled several other lease sales in New Mexico, California and the Eastern states before Trump leaves office, while also planning sales in a variety of regions in March, including in Colorado. 

Regardless of what Biden is able to reverse once he takes office, the climate crisis has only worsened in the last four years as public tolerance for inaction has waned. Many expect the new administration to take bold steps toward addressing climate change, while reversing much of the damage left in the wake of the Trump administration. But if history has taught us anything, it’s that nothing is guaranteed.   

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