Trump to Sell Arctic Oil Rights Days Before Biden Sworn In

Trump Sets January 6 Auction of Arctic Refuge Drilling Rights

The Trump administration is racing to sell oil drilling rights in the Arctic National Wildlife Refuge before Joe Biden takes office so the president-elect can’t revoke the contracts.

The Interior Department announced Thursday it will hold the auction on Jan. 6 -- an accelerated timetable meant to ensure the oil and gas leases are formally issued before Biden is sworn in Jan. 20. Biden has vowed to permanently protect the refuge, but formal leases are contracts with the federal government and are difficult to cancel.

“Congress directed us to hold lease sales in the ANWR coastal plain, and we have taken a significant step in announcing the first sale,” Chad Padgett, Alaska director of the Bureau of Land Management, said in a news release. “Oil and gas from the coastal plain is an important resource for meeting our nation’s long-term energy demands and will help create jobs and economic opportunities.”

The Interior Department is required to hold two auctions of oil and gas leases in the refuge’s coastal plain by Dec. 22, 2024 under a congressional plan to offset the cost of the 2017 tax cuts. But environmentalists and indigenous Alaskans, including Gwich’in people who consider the area sacred, say the action imperils a wildnerness home to calving caribou, migratory birds and other species.

They have vowed to fight the new sale plan in court, building on other litigation already challenging the Interior Department’s earlier decision to make all 1.56 million acres of the coastal plain open for oil leasing.

“The Trump administration is hell bent on selling off the Arctic refuge on its way out the door, rules and laws be damned,” said Matt Lee-Ashley, a senior fellow with the Center for American Progress. “But they have made such a mess of the leasing process -- suppressing science, cutting corners, ignoring the rights and voices of the Gwich’in people -- that this whole boondoggle can and should be tossed in the trash by the courts or the next administration.”

The Interior Department is posting the formal sale notice before it finishes soliciting input on what specific tracts should be up for auction. The agency had given oil companies until Dec. 17 to make recommendations and told a federal court that it would publish a notice of sale “subsequently” if it decided to hold an auction.

“Cutting off public input by noticing a lease sale in the middle of an open comment period is politically motivated and legally questionable,” said Brook Brisson, a senior staff attorney with Trustees for Alaska, which is representing groups challenging the administration’s plans in court.

Details of the sale terms -- including minimum required bids -- were set to be released Monday.

The sale date gives the Trump administration two weeks to formally issue any leases sold at auction before Biden is sworn in as president. That process of vetting high bidders and subjecting them to a Justice Department review typically takes months, but Interior officials have been strategizing on ways to accelerate it.

It’s not clear which oil companies might show up for an auction, given the current economic environment, the regulatory uncertainty and the steep public opposition to Arctic drilling. Companies once viewed as potential bidders for Arctic acreage have slashed spending this year as the coronavirus pandemic eroded crude demand and prices. Conservationists have identified a handful of little-known oil explorers, speculators and Alaska interests that could vie for coastal plain drilling rights.

Any investment in Arctic refuge oil rights is unlikely to see action over the next four years. Though the Biden administration has little power to revoke leases, it can block permits essential to mounting any activity on the tracts.

©2020 Bloomberg L.P.