In Other News: Arctic Wildlife Refuge Sale is a Dud

More evidence of the ongoing downsizing of the oil industry.
Arctic under severe threat, but more and more from climate change, less and less from Oil/gas interests, going forward.

New York Times:

In a blow to the Trump administration’s efforts to open the Arctic National Wildlife Refuge to fossil fuel development, only half of the oil and gas leases offered for sale Wednesday received bids, and all but two of those came from the state of Alaska itself.

Only two companies, neither of them major oil producers, made bids to acquire 10-year rights to explore and drill for oil on two tracts totaling about 75,000 acres. A state-owned economic development corporation, offering the minimum of $25 an acre, was the sole bidder on the other tracts, totaling about half a million acres. The rights to another 400,000 acres remained unsold.

Once billed as a potential windfall that, over time, could bring in close to a billion dollars for the federal Treasury, in all the sale netted less than $15 million, with half of that going to the state.

Both the financial results, and the lack of interest from major companies, are quite likely a disappointment to the Trump administration, and to Alaska officials who have long favored oil development for the jobs and revenue it could bring.

President Trump made opening part of the 19-million-acre refuge in northeast Alaska a centerpiece of his program for developing more domestic production of fossil fuels.

Chad Padgett, Alaska state director for the Bureau of Land Management, the Department of Interior agency overseeing the sale, acknowledged that financially, the results “might not meet some of the targets some folks think it should.” But he hailed the sale as a success.

“Obviously it’s a historic day for the nation and a historic day for Alaska,” Mr. Padgett said in a news conference following the sale in Anchorage. “It reflects an interest in the further development of Alaska’s energy resources.”

But the outcome was ridiculed by environmental groups and others who had long opposed it.

“This lease sale was an epic failure for the Trump administration and the Alaska congressional delegation,” Adam Kolton, executive director of the Alaska Wilderness League, said in a statement. “After years of promising a revenue and jobs bonanza they ended up throwing a party for themselves.”

Autumn Hanna, vice president of Taxpayers for Common Sense, a watchdog group in Washington, D.C., said that the way the lease sale was promoted as a major revenue generator “was always a far-fetched fantasy and these results prove it.”

The bidding by the state economic development corporation, the Alaska Industrial Development and Export Authority, had been authorized only last week, out of concerns that there might be no other bids. The authority’s board had given its executive director power to spend up to $20 million. Its winning bids totaled about $12 million, but because the state receives half of that back, its outlay will only be about $6 million.

There remain legal questions about the state jumping in to bid on leases that are typically bought by oil companies. The development corporation does not have the experience or expertise to actually undertake oil development in the refuge, and winning bids on leases elsewhere have sometimes been rejected because the bidder was deemed similarly unqualified.

But Mr. Padgett said that the situation “doesn’t present legal issues from our perspective.”

The Bureau of Land Management, he said, has a long history of cooperating with the state on leasing. “This is kind of an evolution of that.”

Of the two other winning bidders, one, Regenerate Alaska, is an affiliate of 88 Energy, an Australian oil company that has an interest in a drilling project on state-owned lands in northern Alaska. It bid successfully for a 23,000 acre tract on the western border of the refuge.

The other winning bidder, Knik Arm Services, was formed a year ago; information about it was not immediately available.

The results mean that two weeks before the Trump administration leaves power, its goal of opening the refuge to oil development is hardly certain. The Bureau of Land Management has to finalize the leases and the Department of Justice must conduct an antitrust review. Mr. Padgett said those activities had already begun. “We expect to be issuing acceptance notifications soon,” he said.

But if the leases are not finalized before Inauguration Day, they would be in jeopardy. President-elect Joseph R. Biden Jr. is opposed to drilling in the refuge. With new leadership, several federal agencies could reject the leases.

The Hill:

The Trump administration auctioned off oil and gas rights in the Arctic National Wildlife Refuge (ANWR) for the first time ever Wednesday, selling off 1.6 million acres along the coast to primarily one major buyer: the state of Alaska. 

The Alaska Industrial Development and Export Authority (AIDEA) won nearly every bid, a sign that oil companies were largely uninterested in developing the pristine wildlife refuge as many major banks have refused to provide financial backing and public support for the projects has diminished.

The sale raised just $14.4 million dollars, roughly $27 per acre. That figure is far below the billion dollars the 2017 bill projected the government would earn alongside a second sale. Only half the acres up for sale received bids, which were submitted by only three companies.