Interior Dept. Takes Next Step Toward Sale of Drilling Leases in Arctic Refuge

The Trump administration reached a milestone this week in its plan to open a pristine part of Alaska to oil and gas development with the release of a final report on the environmental impact of the plan.

The report keeps the Interior Department on track to auction leases for the right to drill in the coastal plain of the Arctic National Wildlife Refuge before the end of the year, a long-stated administration goal. Having drilling rights in the hands of oil companies would make it more difficult to stop development in the refuge should Democrats take either the White House or Senate and keep control of the House in the 2020 elections.

Here’s a look at the issues and what has happened so far.

The Arctic National Wildlife Refuge is the largest remaining expanse of pristine land in the United States, an area the size of South Carolina that is largely devoid of human activity and home to migrating birds, polar bears, caribou and other wildlife.

Under a 1980 law, Congress left the possibility that 1.5 million acres — about 8 percent of the overall refuge — along the Arctic Ocean coast could be opened to oil and gas development. But for decades, Democrats, environmentalists and some Republicans derailed efforts to allow oil exploration in the area.

In 2017, with Republicans in control of the White House, the Senate and the House, Congress included a section in a tax bill establishing a plan to sell leases in the coastal plain, billing it as a revenue generator for the federal treasury.

With the passage of the bill in December 2017, the Interior Department began work on the lease-sale plan, largely through one of its agencies, the Bureau of Land Management. The plan calls for two sales of at least 400,000 acres. Owning leases would allow oil companies to begin exploration, but actual production of oil would probably not occur for at least a decade, if at all.

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ImageA herd of caribou in the coastal plain of the Arctic National Wildlife Refuge.
CreditSteven Kazlowski/Alamy

Relatively little is known about how much oil lies under the coastal plain. The only seismic studies — which can give strong clues as to the location and size of oil and gas reservoirs — were done in the 1980s, when the technology was relatively primitive compared with today. In the late 1990s, using an updated analysis of the seismic data and other research, the United States Geological Survey estimated there could be up to 11 billion barrels of recoverable oil in the coastal plain, equivalent to about 18 months of consumption in the United States.

The administration, Republicans in Congress and lawmakers in Alaska have used that estimate to argue for opening the refuge, saying the coastal plain could reduce energy imports and that drilling would provide much-needed jobs in Alaska, where oil production has declined since the boom days of the 1970s.

But some oil experts doubt that estimate, pointing out that some oil wells near the refuge have had disappointing results. And a New York Times investigation found evidence that the only well drilled within the refuge boundaries, the KIC-1 well that was completed in the mid-1980s, was also disappointing.

Environmental groups and many Democrats in Congress have argued that opening the refuge to development makes little sense in an era when the world should be reducing its use of fossil fuels to fight climate change, and that exploration and drilling would cause great environmental damage and harm wildlife in the refuge. Especially vulnerable, they say, is the region’s population of polar bears, which is already in decline because of sea-ice loss related to climate change, and the large migrating herd of caribou that uses the coastal plain as a calving area.

Environmentalists argue that even exploration work, such as new seismic studies, could cause irreparable damage to the delicate tundra in Arctic Alaska.

Doubts have also been raised as to how much revenue the lease sales would generate. The initial administration estimate was $1.8 billion over 10 years; the latest government estimate suggests it would be about half that. A Times analysis of other lease sales in northern Alaska suggested that total revenue could be less than $50 million, or about $5 million a year.

The KIC-1 well results were a tightly held secret of the oil companies involved in the drilling. Beyond that, there is very little data about what lies beneath the coastal plain.

A proposal for new, more sophisticated seismic studies to begin last winter was delayed in part because of work to determine how it could be done with minimal harm to wildlife. The project was shelved earlier this year, but the Interior Department expects that it will be revived this winter. Another proposal, for aerial studies that would provide some information about conditions below the surface of the coastal plain, went nowhere.

Read more about potential drilling in the Arctic
CreditSteven Kazlowski/Alamy

Under federal environmental protection laws, the Bureau of Land Management had to file an environmental impact statement for the lease-sale plan. It filed a draft last December, and after receiving and reviewing about 1.1 million comments and holding hearings in Alaska and Washington, it released the final statement on Thursday.

The draft report had outlined several possibilities for lease sales, largely involving how much of the coastal plain would be opened to development. The final report recommends the broadest approach, allowing drilling rights for most of the acreage to be sold.

At a news conference Thursday, Chad Padgett, Alaska state director of the Bureau of Land Management, said that a decision on how much acreage would be offered for sale was not yet final. But the recommendation, he said, “presents the best balanced approach both to development and environmental concerns such as resource protection.”Mr. Padgett said that it included protections for polar bears, caribou and other wildlife.

Oil industry representatives and members of Alaska’s Congressional delegation hailed the report. Environmental groups and some Congressional Democrats immediately objected to it, saying that among other things it ignored most of the potential impacts, including the harm to wildlife. It also did not take into account the future effects of climate change on the region, they said.

Also on Thursday, the Democrat-controlled House approved legislation that would halt the lease-sale plan. But it is not expected to survive the Senate, where Republicans are in the majority.

A 30-day comment period now starts following the release of the environmental impact statement. Once completed, the Interior Department will issue a “record of decision,” with the lease sales starting after that, most likely in December, the usual month for oil-leasing activity in Alaska. But the eventual outcome remains uncertain, as environmental groups are expected to file court challenges to the plan. And if leases are sold, exploration or production work will require further environmental reviews.

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Source: NYT

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