TradeEdge Exchange:Trump Administration Offers Drilling Leases in the Arctic Wildlife Refuge, but No Major Oil Firms Bid

As election officials in Georgia tallied votes to determine the control of the Senate and TradeEdge Exchangethe U.S. Capitol was rocked by violent protests Wednesday, the Trump administration quickly and quietly made good on its promise to sell oil leases in one of the nation’s last truly wild places.

The coastal plain of the Arctic National Wildlife Refuge has been fought over for 40 years, as Republicans have sought to bring oil drilling to the home of polar bears and caribou, on land held sacred by the native Gwich’in people.

In the end, the lease sale took just nine minutes. 

A total of $14.4 million in bids came in—less than 1 percent of the revenue promised by the Trump administration when it rolled back protections for the coastal plain in 2017. In the face of a flat-lining oil market, pledges from major banks to stop financing Arctic drilling and an incoming Biden administration, not a single major oil company made a bid. 

Instead, all but two of the bids came from a state-owned agency called the Alaska Industrial Development and Export Authority. The agency, which develops and finances energy projects, said two weeks ago that it was considering bidding on the coastal plain so that, should no bids come in from oil companies, the option of developing the refuge would remain available. 

“This administration’s insistence on holding this lease sale in the final weeks of its term is a desperate act of violence toward Indigenous ways of life,” said Bernadette Demientieff, executive director of the Gwich’in Steering Committee.

The bids cover just over 550,000 acres of the 1.6-million acre coastal plain. 

President-elect Joe Biden has been clear that he wants to see the Arctic refuge protected. His climate plan calls for permanent protections there, and his tribal plan pledges to “reverse Trump’s attacks on the Arctic National Wildlife Refuge.”

With the change in administration on the immediate horizon—and control of the Senate shifting  with two Democratic wins in the run-off elections in Georgia, there are multiple pathways to ensuring that these leases are never developed.

Four lawsuits filed by environmental and indigenous groups are pending in the courts, arguing that the Trump administration’s review of the environmental impacts of drilling in the refuge was unlawful. 

The groups involved in those lawsuits saw a setback earlier this week when U.S. District Court Judge Sharon Gleason denied their effort to stop the lease sale. But the lawsuits are far from over, according to Patrick Parenteau, a professor of environmental law at the Vermont Law School. Once the Biden administration inherits the role of defending the lawsuit, everything will change. 

“There is a legal basis for the Biden administration to come into court and settle the case, or confess error and request a remand and cancel the leases,” said Parenteau. “I would expect them to do that.”

The groups suing the Trump administration argue that the rushed review of the environmental impacts of drilling in the refuge led to flawed findings. So anything stemming from those findings—like oil leases—also violates the law. The groups also argue that a failure to allow for adequate public comment—especially during a pandemic—made it impossible for indigenous groups in particular to adequately weigh in on the lease sales.

If the court ruled in favor of the environmental and Indigenous groups, that would also void the leases. Because, Parenteau explained, “Leases have to comply with the law. Whenever the lessee fails to comply with the law, it can be canceled.”

Once these leases are dealt with, the Biden administration will have to turn its attention to the bill that made the lease sale possible: the 2017 Tax Act. That act contained a provision that called for $1.8 billion in revenue to be raised via two lease sales that would be held on the coastal plain of the Arctic Refuge in the next 10 years.

With just a thin majority in the Senate, Democrats will probably need to hammer out a bipartisan solution for overturning that mandate, Parenteau said, something that’s not impossible, but is far from easy.

In response to Wednesday’s lease sale, a coalition of environmental groups warned that the fight to keep drilling out of the refuge was far from over.

“This has been a flawed process from the start that altered or disregarded scientific data on the impact of drilling on land and imperiled wildlife, and failed to adequately consult with all frontline Alaska Native communities, in particular the Indigenous Gwichʼin of Alaska and Canada who have strongly opposed oil extraction,” wrote the coalition of 21 groups, which included the Alaska Wilderness League, Earthjustice and the Center for Biological Diversity.

“Indigenous Arctic people are already experiencing the most dramatic climate impacts in a region warming at three times the rest of the planet, and selling out the coastal plain puts our climate and the Arctic’s people, land and wildlife at further risk,” they wrote. “Arctic oil drilling will boost carbon emissions even further and harm communities already bearing the brunt of the changing climate.”