First ANWR lease sale sees little industry interest, most bids from a state-owned corporation
JUNEAU, Alaska (KTUU) - After four decades in the making, the first oil and gas lease sale of the Arctic National Wildlife Refuge received few bids and little industry interest. Most of the successful bids came from a state-owned corporation and no major oil companies put in offers to lease the land for oil and gas development.
Katharine MacGregor, the Deputy Secretary of the U.S. Department of the Interior, unsealed the bids during a livestreamed event hosted by the Bureau of Land Management. She called the event “historic” and “decades in the making.”
Bids could be submitted for 22 tracts of land, representing over 1 million acres of the coastal plain. Eleven tracts received bids, encompassing 552,808 acres of the coastal plain.
The sale brought in $14.4 million which will be split evenly between the state of Alaska and the federal government. In 2017, the Congressional Budget Office estimated that the oil and gas lease sales of ANWR could raise $2 billion through leasing and development of the coastal plain through 2027.
The Bureau of Land Management will now check through the bidders’ paperwork before formally giving them the leases.
The Alaska Industrial Development and Export Authority was the highest bidder for nine of the 11 tracts of land that received bids after being authorized to spend up to $20 million during the lease sale. Two smaller Alaska-based companies also won leasing rights.
“By acquiring these tracts, Alaska preserves the right to responsibly develop its natural resources. This will create new, good-paying jobs on the North Slope and generate revenue for the local economies of Alaska’s Arctic and the state’s general fund,” said Alan Weitzner, the executive director of AIDEA.
Chad Padgett, the state director for the BLM, called the first lease of ANWR a “success” with three bidders putting offers in to potentially develop the 1002 region for oil and gas production.
Kara Moriarty, the president and CEO of the Alaska Oil and Gas Association, said ANWR has a role to play in ensuring the United States’ long-term energy independence, but acknowledged the lackluster showing from the oil and gas industry.
“While the results may not have been as robust as we might have expected, industry still supports future access to this area,” Moriarty said through a prepared statement. “Today’s sale reflects the brutal economic realities the oil and gas industry continues to face after the unprecedented events of 2020, coupled with ongoing regulatory uncertainty.”
Conservation groups heralded the lease sale as a “colossal failure.”
Andy Moderow, the state director for the Alaska Wilderness League, said it showed that market forces are against developing ANWR. Several major banks have recently pledged not to finance new Arctic oil and gas projects.
“Instead of the state of Alaska receiving millions, like it was promised, the state of Alaska actually spent $12 million on today’s lease sale. It’s upside down, it’s backwards and there’s no way President-elect Biden or Congress is going to let this stand,” Moderow said.
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