Alaska development agency may eye some exploration work next winter in Arctic refuge after ruling

A state development agency might consider doing some oil exploration work in the Arctic National Wildlife Refuge next winter, following a federal judge’s ruling Tuesday that the Biden administration lacked authority to cancel the agency’s oil and gas leases there, an agency official said.

The Alaska Industrial Development and Export Authority may not be able to pursue a full exploration program there next winter, with seismic surveys across the leases, agency executive director Randy Ruaro said in an interview Wednesday. But some seismic surveys — using seismic waves to map the subsurface — may be possible, he said.

That’s because the Biden administration threw up a major hurdle when it issued a decision in December that sharply limited exploration activity there, he said. That hurdle must still be removed, he said.

“They left part of ANWR open, even the Biden administration did, because they had to,” Ruaro said. “But quite a bit of it is zoned out.”

The agency is challenging the decision in court. It can also work with the Trump administration, which supports drilling in the refuge, to reverse Biden’s decision, he said.

“We’ve got a couple options,” Ruaro said.

But it’s unknown how long either option will take, he said.

The possibility of drilling in the refuge took a big step forward in 2017 when the Republican-led Congress passed a law opening the refuge to development.

The state agency acquired the seven leases, totaling 365,000 acres in the northwest corner of the refuge along the coast, in a lease sale held in the final days of the first Trump administration.

No major oil companies bid in that historic sale, and the state agency was the only bidder to hold on to its leases. But the Biden administration canceled the leases in 2023, citing legal flaws with the leasing program.

The 19.6-million-acre area for decades has been a battleground for pro-development advocates who say an oil discovery will help the economy and national security, and conservation and some Indigenous groups who fear it will threaten polar bears and caribou and add to climate pollution.

Judge Sharon Gleason, in her 22-page decision on Tuesday, said the cancellation violated the 2017 law calling for the refuge to be opened, because the Biden administration did not obtain a court order for the cancellation.

She sent the matter back to Interior, where the new Interior secretary, Doug Burgum, said last week that he plans to expand opportunities for oil and gas development in the 1.6-million-acre coastal plain of the refuge.

Alaska Gov. Mike Dunleavy and the Voice of the Arctic Iñupiat, representing elected Iñupiaq leadership from Alaska’s North Slope where the refuge is located, praised the decision.

So did Alaska’s U.S. senators, who helped write the provision in the 2017 law opening the refuge, and freshman Rep. Nick Begich III.

“After the first Trump administration developed a good program and AIDEA secured seven leases, the Biden administration spent four years attempting to turn the program on its head,” Sen. Lisa Murkowski said in a statement from the delegation Wednesday. “While we lost years of development to their willful intransigence, this decision is an important step to getting things back on track.”

Conservation groups and the Gwich’in Steering Committee criticized Gleason’s decision for allowing the agency to keep its leases. They said the state development agency has no ability to extract oil and gas, and has been has been the subject of reports showing it has made poor financial investments.

“AIDEA is the ‘grim reaper’ of Alaska megaprojects — when they show up to spend money, smart investors stay away,” said Andy Moderow, senior director of policy for the Alaska Wilderness League. “We will continue to challenge their misguided attempts to industrialize the Arctic Refuge, so that the Coastal Plain can sustain continued and new traditions for generations to come.”

‘Valuable deposits’

The refuge’s remote location in northeast Alaska, and the controversy over drilling there, has likely limited bidding interest from oil companies. The Biden administration held a second lease sale for the refuge early this year, but receive no bids of any sort.

Gleason’s decision suggested that the agency, which acquired its leases with the idea of working with exploration companies, could be sitting on sizable amounts of oil.

She said environmental reviews conducted under the first Trump administration and under Biden found that the coastal plain houses valuable deposits of oil and gas.

“Although these documents indicate that there are no proven plays, or groups of oil fields, due to the lack of oil and gas exploration in the Coastal Plain, they nonetheless confirm that the Coastal Plain contains valuable deposits according to the federal government’s best estimates,” Gleason wrote.

The U.S. Geological Survey in 1998 estimated that the refuge contains pools of oil that today would be comparable to large discoveries made in recent years in Alaska, far west of the refuge, such as at ConocoPhillips’ Willow field.

Ruaro said AIDEA has reviewed data from old wells drilled west of the refuge on state land. It’s also taken a new look at two-dimensional seismic surveys shot in the 1980s, when Congress allowed oil companies to drill the only well ever allowed in the refuge, he said.

“We think we have a very good idea of what’s in the northwest corner of ANWR, on our leases, and we think there are billions of barrels of oil,” Ruaro said.

The recent announcement of an oil discovery just west of the refuge also highlights the area’s oil potential, Ruaro said. The partners announcing the find included Australian-based Santos and Bill Armstrong, the geologist whose work led to major discoveries in Alaska and prompted ConocoPhillips to take steps that led the company to Willow.

“We think those trends continue into ANWR,” said Ruaro, referring to geological patterns that could support a discovery.

Next steps on possible exploration in the refuge will be considered by the agency’s board, he said. The agency will work with partners like the community of Kaktovik, an Alaska Native village in the refuge, along with the North Slope Borough and the Voice of the Arctic Iñupiat, he said.

“I would say that all options to advance the project and development are on the table, and we’ll get full guidance from our board,” Ruaro said.

The board will likely consider what it will take to soon acquire detailed, new seismic exploration data, known as three-dimensional seismic, which replaced the old 2D seismic technology, he said.

“3D is the goal,” he said.