For Immediate Release: Monday, December 28, 2020
Contact: Rick Steiner (907) 360-4503; Jeff Ruch (510) 213-7028; Kirsten Stade email@example.com
Arctic Refuge Becoming Oil & Gas White Elephant
Desperate Last-Minute Government Maneuvers Denote Industry Disinterest
Washington, DC — Facing a December 31st bidding deadline, both the Trump administration and State of Alaska are taking extraordinary steps to counter flagging industry interest in bidding for oil and gas exploration rights in the Arctic National Wildlife Refuge. These frantic measures will prove futile, predicts Public Employees for Environmental Responsibility (PEER), pointing to a mounting number of factors militating against petroleum development in the iconic pristine refuge, known as “America’s Serengeti” for its uniquely rich and diverse ecosystem.
On December 18th, three days before bidding began, the U.S. Bureau of Land Management pulled 10 of 32 tracts, (some 475,000 acres or about a third of the total) off the blocks. BLM’s move signaled its fear there might be no bids on these tracts. The minimum bid is $25 per acre.
On December 23rd in a hastily called meeting, the Alaska Industrial Development and Export Authority, a state-owned entity, voted to devote $20 million to bidding on remaining tracts.
“Throwing public money at this petro-pipe-dream is an admission that this scheme will not fly in the free market,” said PEER Board Member Rick Steiner and retired University of Alaska Anchorage professor, who has called for an official review as to whether AIDEA is eligible to bid since it has no intent or ability to actually engage in drilling operations. “AIDEA’s abysmal track record indicates its investment decisions reflect a special reverse-Midas touch.”
BLM will open the bids on January 6th and proceed immediately to lease sale. This hyper-hurried pace reflects the announced stance of the incoming Biden administration to halt all Arctic Refuge drilling plans, making it unlikely that any awarded lease will be able to obtain permits required go forward. Besides the calendar, drilling plans face daunting barriers, including –
- Lack of financing, as many major banks are eschewing fossil fuel investments, especially in the Arctic and major oil companies are bowing out of Arctic expansion;
- Rock bottom oil prices, as a global glut worsens during the pandemic-induced economic slowdown; and
- The inability of BLM to conduct seismic testing magnifies the crap-shoot nature of bidding since there is little hard geologic data to justify staking big venture capital.
Even if leases are sold, any awarded leases will be tied up in litigation for years. In addition, any leases can be repurchased, resetting the whole process back to zero.
“This last-ditch effort to open the Arctic Refuge has about as much chance of success as Trump’s crazed campaign to invalidate the Electoral College results,” remarked Pacific PEER Director Jeff Ruch. “This frenzy signifies the end of Alaska’s peak oil economy. The transition away from fossil fuel dependence will be harder in the Last Frontier but no less necessary.”