Alaska agency sues Biden administration over delays to Arctic refuge oil development

The Alaska Industrial Development and Export Authority says measures the administration has taken to halt drilling in the Arctic National Wildlife Refuge are unlawful.

The Alaska state agency that bought oil leases in the Arctic National Wildlife Refuge on Thursday sued the Biden administration for what it claimed were illegal measures to impede drilling in the environmentally sensitive area.

The Alaska Industrial Development and Export Authority, nearly the only bidder in the controversial lease sale held in the last days of the Trump administration, filed the lawsuit in U.S. District Court in Anchorage. Defendants are President Joe Biden, Interior Secretary Deb Haaland and other top administration officials.

AIDEA, which now holds seven leases resulting from the sale, contends in the lawsuit that Biden and Haaland violated federal laws by imposing a moratorium on ANWR oil exploration work. The Inauguration Day executive order issued by Biden that froze activity and a June 1 secretarial order by Haaland that suspended the leases and resulted in the launch of a supplemental environmental impact statement violated the 2017 tax law passed by Congress that opened ANWR to leasing as well as the Administrative Procedures Act, the lawsuit contends.

In a statement, AIDEA officials attacked Biden and his administration.

“Alaska has been promised the legal right to responsibly determine development of its natural resources,” AIDEA Executive Director Alan Weitzner said in that statement. “Alaska is at stake—our resource-based economy, good-paying jobs for Alaskan families, local and state tax revenue for public services, and sustained throughput into the Trans-Alaska Pipeline System. AIDEA, Alaska, and Alaskans are due the full potential benefit of those leases and we will fight the federal government in court to keep its promises.”

AIDEA offered more than $12 million in bids and ultimately secured seven leases in an effort that its leaders openly described as a backstop effort in case no major oil companies participated in the Jan. 6 lease sale. It turned out that no big oil companies submitted bids. The only other bidders – each of which was transferred a single ANWR tract – were a subsidiary of a small Australian energy company and a recently established Anchorage-based investment company. In all, nine tracts were transferred after the lease sale.

In its lawsuit, AIDEA said the ongoing supplemental environmental impact statement process has created impediments to the work that needs to be done to start exploration on the leases that have been sold. It said the Bureau of Land Management in August informed AIDEA contractors that permit application for archeological survey work would be delayed until after the supplemental environmental impact statement is completed.

A spokesman for the Department of the Interior declined to comment late Thursday on the AIDEA lawsuit.

The AIDEA case was assigned to U.S. District Judge Sharon Gleason, who is already presiding over four lawsuits filed by opponents of ANWR oil development. Those four lawsuits are seeking to overturn the lease sale program and they challenge the validity of the Trump administration’s pre-sale environmental review.

In those cases, Gleason has granted the parties an extended stay that pauses legal action.

The parties must submit future status reports in accordance with a supplemental environmental statement timeframe, Gleason said in a Sept. 10 order. The judge spelled out a timeframe for future status reports that corresponds to milestone dates for the new environmental review. The scoping report is expected to be issued by December, the draft supplemental EIS by June of 2022, the final supplemental EIS by April of 2023 and the new record of decision by June of 2023, Gleason’s order said.

The infrastructure bill pending in the U.S. House would abolish the Arctic Refuge oil program entirely.

Despite AIDEA’s contention that huge economic benefits will flow from ANWR oil development, industry interest in exploring for oil in the refuge or in other parts of Arctic Alaska has not been demonstrated in recent lease sales.

The ANWR lease sale results, with high bids totaling about $14.4 million, fell far short of the more than $2 billion in total high bids that had been predicted by supporters.

More recently, state lease sales for onshore North Slope and offshore Beaufort Sea territory drew only a handful of bids. According to results released on Wednesday by the Alaska Division of Oil and Gas, there were no bids submitted in the state’s annual areawide lease sales for the Beaufort Sea and Brooks Range Foothills and only six bids submitted in the areawide North Slope lease sale. The areawide North Slope lease sale had offered about 5 million acres on the central North Slope, but the bids – none of which came from major oil companies – were for tracts totaling 14,080 acres.

It was the fewest bids ever submitted in an areawide North Slope lease since the areawide leasing program began in 1999, according to state data.

In a statement, Division of Oil and Gas Director Thomas Stokes referred to the results as “modest.”

“When you combine that fact with the limited available acreage around known exploration targets throughout the North Slope, and some banks’ current hesitance to lend money for Arctic exploration, it’s understandable that the modest interest in today’s lease sale focused on opportunities close to development infrastructure,” Stokes said in the statement.