Well, here we go with ANWR again. The Trump Administration rolled out a comprehensive plan on Monday governing the leasing and eventual development of oil and natural gas deposits believed to lie beneath the northern extent of the Alaska National Wildlife Refuge, otherwise known as ANWR.
The decision issued by Interior Secretary David Bernhardt envisions an aggressive leasing schedule that could offer the entirety of the 1.56 million-acre coastal plain of ANWR for auction by the end of this year in an effort to cement the policy in place before the expiration of President Donald Trump’s first term in office. Besides, as Bernhardt noted Monday, these lease sales have been mandated by congress, and Interior has a duty to follow through.
With all that understood, the question becomes exactly what pressure is creating the inertia behind the Administration’s decision to keep pushing this latest in what seems like a hundred efforts over the past 40+ years to open this northernmost sliver of ANWR (the entire refuge occupies more than 19 million acres) to oil and gas exploration. Or more specifically, who in the industry is pushing for this at this point in time?
ANWR has been an energy-related political football since the Jimmy Carter Administration, when industry interests – including several major integrated oil companies then operating at Prudhoe Bay – began advocating for its opening following the completion of the Trans-Alaska Pipeline System (TAPS). Industry has long believed that billions of additional barrels of crude lie beneath ANWR’s coastal plain, and, given its location just about 50 miles East of Prudhoe Bay, it would be a fairly easy thing to build a new pipeline to carry ANWR crude into the TAPS system.
But that would be the only fairly easy aspect of leasing, permitting, drilling, producing and marketing ANWR crude. This is not 1977 anymore, and every other aspect of such an endeavor would be incredibly complex, controversial and costly, both in dollar terms and in terms of negative impacts to any company’s reputation.
The anti-oil and gas lobby invariably puts up a fierce battle anytime this concept is introduced, which helps to explain why it has served as a political football so many times since 1977. Indeed, this community was already cranking out the talking points on Monday, as reported by the Houston Chronicle:
“An oil spill in this special sanctuary could devastate polar bears and caribou and cause irreparable harm to a pristine Arctic ecosystem,” said Kristen Monsell, an attorney with the Center for Biological Diversity (CBD). “We’ve reached a dangerous new low in the Trump administration’s obsession with expanding the extraction of dirty fossil fuels.” Frightening and scary for sure, and exactly the sort of rhetoric any oil company expressing the slightest interest in obtaining a lease of a piece of the coastal plain would face on a daily basis.
And the fright rhetoric would not be limited to traditional left-wing environmentalist lobby groups like the CBD: As I detailed here in 2018, big ESG investor groups who control trillions in oil and gas stocks and investments decided to become heavily involved in the issue after congress, led by Alaska Senator Lisa Murkowski, had included ANWR leasing approval in a major energy bill. Here is what I wrote at that time:
In a letter made public on May 14, activist institutional investors that manage more than $2.5 trillion in assets urged oil and gas companies to avoid drilling in the Refuge, claiming that companies who do so face “enormous reputational risk and public backlash,” which is not an invalid point. Some companies, like Shell, who have attempted to drill in other areas in the Alaskan arctic region in recent years, have found themselves on the receiving end of a withering onslaught of negative media attention and seemingly endless administrative and court challenges.
Given such a formidable wall of opposing interests, including the notoriously anti-oil and gas 9th Circuit Court of Appeals through which all the inevitable lawsuits must travel, which companies in the industry would become active bidders should a lease sale auction be held? The number of sizable, well-capitalized companies operating in Alaska today has dwindled down to basically ExxonMobil
None of those companies has publicly expressed a great deal of interest in trying to explore in ANWR. The thought that some other company not currently engaged on Alaska’s north slope would want to use ANWR as its opening stage for an entry into that province seems highly unlikely.
It’s all a bit perplexing, but one thing is now certain: The next few months will be marked with a lot of sound and fury coming mainly from the environmental left about ANWR. Whether much, or any, will come from the industry
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