ANWR lawsuit, lost revenues

Is the fear over developing the Arctic National Wildlife Refuge 1002 area warranted? The State does not think so.

In September of 2019, the Department of the Interior’s (DOI) Bureau of Land Management (BLM) issued a 515 pg Environmental Impact Statement (EIS) pertaining to oil and gas leasing on the coastal plain of the Arctic National Wildlife Refuge (ANWR). In January of 2021, the BLM announced that it had approved the first nine leases on the coastal plain of the Arctic National Wildlife Refuge (ANWR). This was the first oil and gas lease in this area after decades of discussion, and volleying between agencies and industry interests. At the time, the United States Geological Survey (USGS) stated the recoverable oil under the coastal plain neared 8 billion barrels.

The 10-year leases totalled 437,804 acres on some of the most highly prospective land on the North Slope.Lease awardees include Alaska Industrial Development and Export Authority (AIDEA): 7 tracts; Knik Arm Services, LLC: 1 tract, and Regenerate Alaska, Inc.: 1 tract.

That same month President Biden assumed office. On his first day, he issued Executive Order 13990, directing the DOI to review the oil and gas leases in the Refuge. It’s not a surprise that the Department identified “defects” in the initial Record of Decision supporting the leases.

Just six months later, in June 2021, the DOI suspended all activities related to the implementation of the new coastal plain oil and gas leases under Secretarial Order 3401. They announced that a new environmental analysis would be implemented to address potential “legal deficiencies” in the existing leases, and then subsequently they would determine whether the leases should be reaffirmed, cancelled, or subjected to additional mitigation measures.

National Petroleum Reserve-Alaska (NPR-A) and the Arctic Coastal Plain, Arctic National Wildlife Refuge (ANWR). Source https://esajournals.onlinelibrary.wiley.com/cms/asset/f2df8400-3875-45b5-a3c6-a4698946035a/eap2143-fig-0001-m.jpg

What’s not shown in this image above are the four caribou herds that call this entire area home, including the Western Arctic Caribou Herd and the Teshekpuk Caribou Herd which calve in the NPRA, the Central Arctic Caribou Herd which calves just south of Prudhoe Bay, and the Porcupine Caribou Herd which calves in the 1002 area, the northern portion of ANWR as well as further to the east in Canada in some years. In addition to caribou, polar bears, grizzly bears and the random muskox round out the large mammals that roam the coastal plain. There is no doubt that these areas are incredibly important to the wildlife here and the people who depend on them.

But, is it too dangerous to develop these areas for oil and gas?

In September 2023, the Biden Administration issued their answer: YES, and they cancelled the leases in ANWR. While the Secretary of the Interior has the authority to cancel oil and gas leases, it is only in the case of a violation of statute or regulation. The State has consistently contended there are no such violations in the ANWR leases.

The Biden Administration went one step further. They also proposed new regulations prohibiting oil and gas development for the NPR-A, an area specifically created as a source of oil for the U.S. Navy and later congressionally designated for oil and gas development.

Nothing to see here, move along.

To this day, the volley is ongoing and the question is still being debated as to whether or not it is too dangerous to develop oil and gas in these areas. Industry says they can do it safely. Environmental groups say it’s not possible.

ANWR has become so political, it’s hard to know if the opponents to oil and gas development even follow new technology and drilling trends. Can they ever be sold on the idea of responsibility and sustainability of development in this area?

The State of Alaska is not going to wait forever. Yesterday, July 2nd 2024, the State of Alaska filed suit in the United States Court of Federal Claims seeking to recover lost revenues from nine of the leases that the Biden Administration canceled on the coastal plain.

“We know these resources can be developed safely and responsibly, and with the support and involvement of the local communities that live within the 1002 Area,” said John Boyle, Commissioner of the Alaska Department of Natural Resources.

Under federal law, the State is entitled to 50 percent of the royalties paid under the leases. While updated planning documents suggest only 7 billion barrels of oil in the area, development of half of these resources would give the State a return of nearly $25 billion in royalty revenue on top of the State share of the lease rental fees and bonus payments.

By canceling the ANWR leases, Alaska says that the United States breached its obligations. The ramifications of which deprived State of billions of dollars in statutorily-provided revenues.

Lawsuits are expensive, but federal overreach does not end until a new federal administration takes over (even if then) or the court says it does.

This lawsuit adds to the growing list of challenges to federal actions affecting Alaskans, including a recent filing in federal district court and the Court of Federal Claims challenging the EPA’s decision to put off limits 300 square miles of State lands to mineral development and is asking for $700 billion in compensation.

The football is still in play.

In other news… while the Department of Energy halted all new approvals of LNG export permits to non-free-trade agreement countries in January of this year, a federal judge on Monday blocked President Biden’s ban on liquified natural gas export permits. This was a welcomed ruling on a case filed by Alaska’s attorney general and 15 other states in March. U.S. District Judge James Cain of Louisiana ruled that Biden’s LNG ban “be stayed in its entirety, effective immediately.”

If Alaska does not continually fight back, we will continue to be overriden by Washington DC at every turn.

If we win this one, and we get to drill in ANWR, we must do it right. The Gwich’in Steering Committee and the Voice of the Arctic Iñupiat will be the first to make sure.

There’s no room for error. The short-term development of our non-renewable resources simply cannot trump our need for our renewable resources for years to come.

Barren Ground Caribou. Source: ADFG