Curtain closes on another Arctic refuge lease sale after feds receive zero bids

The U.S. Interior Department said Wednesday that it has concluded the second oil and gas lease sale in the Arctic National Wildlife Refuge after receiving no bids from companies.

The bid opening was planned for Friday, but the deadline for bid submission was Monday, the agency said.

It’s the second time in four years that oil companies have shown little to no interest in leasing tracts for potential drilling in the coastal plain of the 19 million-acre area in northeast Alaska. The sales have fallen far short of congressional expectations that they would generate substantial revenue for the Alaska and federal governments.

The zero-bid sale raises questions about the future of drilling in the refuge, but the debate is likely not over. People familiar with the industry in Alaska have said they expect the incoming Trump administration to attempt to hold future lease sales there. The president-elect has vowed to restart efforts to allow drilling in the refuge for the first time.

The Interior Department, conservation groups and the Gwich’in steering committee said in statements Wednesday that the lack of interest in the sale shows that companies recognize the area is too special to develop.

The head of the state agency that acquired the most leases in the original 2021 lease sale said Wednesday that “onerous” rules set on leasing, exploration and development by the Biden administration were a key reason the agency did not submit bids this time. A group representing Alaska Native leaders on the North Slope, where the refuge is located, asserted that the sale shows the Biden administration has sought to hinder development in the Arctic region.

The refuge has been a flashpoint for decades. Opponents have argued that oil and gas activity would hurt polar bears, caribou and other wildlife. Supporters have argued that development of the coastal plain would increase domestic oil production and provide a serious boost to Alaska’s economy.

The state of Alaska this week sued the Biden administration over what it described as strict limitations for the lease sale, including offering the bare minimum of 400,000 acres and widespread restrictions on where construction could occur. The limits were designed to restrict bidding, exploration and development, in contradiction to the 2017 law that required sales there for the first time, the state argued.

“The expired deadline to submit bids concludes the second congressionally mandated sale required by the 2017 Tax Act, which directed the BLM to hold two lease sales in the Coastal Plain within seven years of enactment,” the Interior Department said.

“The first sale, held by the previous administration, similarly demonstrated low interest, yielding a total of $14.4 million in high bids on 11 tracts,” the agency said.

Congress included the two lease sales in the Tax Act on the grounds that they would generate approximately $2 billion in revenue over 10 years, the agency pointed out. The money would have been split between the state and federal governments.

“The lack of interest from oil companies in development in the Arctic National Wildlife Refuge reflects what we and they have known all along — there are some places too special and sacred to put at risk with oil and gas drilling. This proposal was misguided in 2017, and it’s misguided now,” said Laura Daniel-Davis, Interior’s acting deputy secretary, in the statement.

“The BLM has followed the law and held two lease sales that have exposed the false promises made in the Tax Act,” Daniel-Davis said. “The oil and gas industry is sitting on millions of acres of undeveloped leases elsewhere; we’d suggest that’s a prudent place to start, rather than engage further in speculative leasing in one of the most spectacular places in the world.”

The Alaska Industrial Development and Export Authority, a state agency, was the top bidder in the original lease sale held in the waning days of the first Trump administration in 2021.

The Biden administration canceled the agency’s seven leases in 2023 after determining that the first lease sale, also required by law, was legally flawed. The state agency has filed a lawsuit in federal court to retain those leases.

The state development agency for this second lease sale had once again set aside $20 million for potential bidding.

But it held off on submitting bids, said Randy Ruaro, the group’s executive director.

A key reason were the restrictive terms placed on bidders by the Biden administration, he said.

“We believe the terms and conditions of the lease sale are illegal and far more onerous and burdensome than they should be, and they do not allow for, specifically, the successful leasing, exploration, development, production and transportation of oil from ANWR,” he said.

No potential bidder could support those terms, he said.

Secondly, the agency believes it already legally holds the rights to the tracts it has sued over, he said.

The agency has been reviewing and updating old exploration data associated with those tracts, collected in the 1980s during an early exploration effort allowed by Congress, Ruaro said.

Based on that and other data from wells drilled on state land to the west of the refuge, the agency believes “there are billions of barrels of oil in place,” as the federal government has determined, Ruaro said.

The agency has recently submitted arguments to the federal government laying out its case against the Biden administration actions on the lease sales.

After the Trump administration takes office Jan. 20, the agency hopes that the new administration holds a lease sale that “complies with federal law,” Ruaro said.

A spokesperson for Alaska Gov. Mike Dunleavy said Wednesday that the governor had previously predicted that the lease sale was “designed to fail.”

“The upside here is that in a matter of weeks the Trump administration will come into office and prioritize safe oil and gas development that provides stable and secure energy,” Dunleavy said in a social media post last month.

Mark Myers, a former director of the U.S. Geological Survey and an energy and natural resources consultant, said he believes the new administration will seek to hold a lease sale with different terms. The 2017 tax act set deadlines for the first two lease sales in the refuge, but left the door open for additional lease sales.

He said the administration should survey the oil industry to understand if the “onerous” terms were the reason there was no bidding.

Myers said he expects the Trump administration will also attempt to move the ball forward on development by permitting a modern seismic shoot using three-dimensional technology. The shoot would update the understanding of the refuge’s underground oil potential from old data collected in the 1980s.

Kara Moriarty, head of the Alaska Oil and Gas Association, a trade group representing oil companies, said the lack of bids “does not negate the original purpose of the coastal plain, nor the vast potential resource that exists in the area.”

“The current lease sale terms were intentionally limited in scope and the past lease sale is still mired in litigation and regulatory uncertainty, so while disappointing, it is not surprising no one decided to participate in this sale,” she said.

Alaska’s Republican congressional delegation also lamented the terms of the lease sale, in a joint statement.

“I derive no satisfaction in saying I told you so, but the ‘lack of interest’ in this lease sale was an intended consequence of this administration’s efforts to make any development in the Coastal Plain economically unfeasible,” Alaska U.S. Sen. Lisa Murkowski said.

The head of the Voice of the Arctic Iñupiat, a group representing Iñupiaq leadership on the North Slope where the refuge is located, also asserted that there were no bids because of the limits on leasing.

“This is the byproduct of years of inconsistent policy moves by the Biden administration with regard to Indigenous North Slope Iñupiaq lands, intended to stymie economic development in the region,” said Nagruk Harcharek, president of the group.

The group said it has a right to participate in shaping its future and it “will continue to fight against the Biden administration’s attempts to make us environmental refugees in our homelands.”

The Gwich’in Steering Committee, representing some villages that hunt caribou that use the refuge, said the lack of interest shows oil companies recognize drilling in the refuge is not worth the economic risk and liability.

The group is celebrating but recognizes that threats to the refuge will continue, said Kristen Moreland, Executive Director of the Gwich’in Steering Committee.

“We reaffirm our commitment to seeing it permanently protected and remain steadfast in protecting our way of life for our future generations,” Moreland said in a statement.

Conservation groups said Wednesday that they expect battles over drilling in the refuge to continue. So far, no major oil companies have submitted bids in either of the lease sales.

It’s not just oil companies that will stay away from drilling in the Arctic refuge, said Athan Manuel, director of Sierra Club’s program for lands protection.

“Companies won’t bid for it, banks won’t fund it, and insurance companies won’t underwrite it,” he said. “That should make it clear we need to focus on preserving these landscapes for the next generation, not sell them off chasing private profit.”

“The incoming Trump administration still hasn’t gotten the memo, and has vowed to keep trying to sell the Refuge for oil,” said Erik Grafe, an Anchorage attorney with Earthjustice. “We’ll continue to use the power of the law to defend this cherished place, as we have for decades.”