Providing coverage of Alaska and northern Canada's oil and gas industry
September 2023

Vol. 28, No.38 Week of September 17, 2023

A lease sale furor

BLM cancels AIDEA ANWR leases, argues EIS enabling sale legally deficient

Alan Bailey

for Petroleum News

When on Sept. 6 the Bureau of Land Management cancelled the Alaska Industrial Development and Export Agency's Arctic National Wildlife Refuge Coastal Plain oil and gas leases, BLM argued that the 2021 lease sale in which AIDEA obtained its leases had been illegal because of a deficient environmental impact statement for the sale. BLM's ruling has resulted from the publication of a draft lease sale supplementary environmental impact statement, which, the agency claims, has corrected the legal deficiencies in the original EIS.

AIDEA has vehemently denounced the decision to cancel its leases and is threatening legal action. The agency had already been involved in a court case in the federal District Court in Alaska challenging a BLM order to suspend activities on the agency's leases until the SEIS was published. On Aug. 6 the District Court issued an order upholding the BLM lease activity suspension decision. On Sept. 5, the day before BLM published the SEIS, AIDEA requested the court to amend its order, to allow lease related work such as archaeological surveys that does not involve surface disturbance.

A political decision?

AIDEA, in responding to the cancellation of its ANWR leases, accused the Biden administration of making the decision for political reasons, tied to election campaign promises to shut down oil and gas production on federal lands and prevent oil and gas development in ANWR.

"This latest action by the Department of the Interior shows arbitrary disregard for federal law, based on campaign trail rhetoric," AIDEA wrote in a Sept. 6 press release.

Alaska Gov. Mike Dunleavy strongly supports AIDEA's position.

"The leases AIDEA hold in ANWR were legally issued in a sale mandated by Congress. It's clear that President Biden needs a refresher on the constitution's separation of powers doctrine. Federal agencies don't get to rewrite laws, and that is exactly what the Department of the Interior is trying to do here," Dunleavy said. "We will fight for Alaska's right to develop its own resources and will be turning to the courts to correct the Biden administration's wrong."

Alaska's Congressional delegation also expressed vehement disagreement with the BLM decision.

"Having just spent more than a month home in communities across our state, there is palpable anger and frustration among Alaskans about the Biden administration's unrelenting assault on our economy and our ability to lawfully access our lands," said U.S. Sen. Dan Sullivan. "This war on Alaska is devastating for not only Alaska but also the energy security of the nation. This unlawful cancellation of AIDEA's ANWR leases today now brings us to 55 executive orders and actions specifically targeting Alaska since President Biden assumed office."

Native organizations support development

The Inupiat Community of the Arctic Slope, the North Slope Borough and Arctic Slope Regional Corp. issued a joint statement, strongly objecting to the BLM action.

"The cancellation will undoubtedly cause irreparable harm to our communities and the 11,000 residents of the North Slope who rely on these lands to sustain their way of life," the Native organizations wrote. "In the days and weeks ahead, we will be working alongside Alaska's bipartisan congressional delegation and the Governor's office, all stalwart supporters of our people and our region. And we will continue our attempts to be heard by the decision makers in this administration."

"How can the Secretary of Interior make a decision that has such an economic impact on our community of Kaktovik without any formal tribal consultation through our sovereign relationship with the federal government? And to do this under the name of climate change without engaging us as a tribe is completely discriminatory," said Nathan Gordon Jr., vice president, Native Village of Kaktovik, the only village on the ANWR coastal plain. "Native Village of Kaktovik has engaged on this issue at every level -- we were involved in the coastal plain EIS and stand by the record of decision -- you are ignoring us as a tribe."

Gwich'in and environmental organizations oppose

On the other hand, the Gwich'in Native people of northern Alaska and Canada oppose ANWR oil and gas development. The Gwich'in worry about potential impacts on the Porcupine caribou herd that calves on the coastal plain and is a primary subsistence food source for the Gwich'in.

"Cancellation of these leases is a step to rectify attempted violence against our people, the animals and sacred land," said the Gwich'in Steering Committee. "The leases were economically infeasible, threatened the Porcupine caribou herd and the Gwich'in way of life, and if developed would have added to the already deteriorating climate in the Arctic and the world over."

And environmental organizations consistently slam the possibility of oil and gas development in ANWR.

"We commend Secretary Haaland for canceling unlawfully issued oil-and-gas leases in the Arctic Refuge," said Abigail Dillen, president of Earthjustice. "This decisive action undoes an egregious attack on this cherished place and will help to vindicate the rights of indigenous people and protect vital habitat. Looking ahead, we hope to see the strongest possible protections for the Arctic Refuge and the Western Arctic in the years to come."

A Congressional mandate

The Tax Cuts and Jobs Act, passed by Congress in 2017, mandated the conducting of two ANWR coastal plain leases sales. The Bureau of Land Management conducted the first of these lease sales in January 2021, with AIDEA, Knik Arm Services LLC and Regenerate Alaska purchasing leases in the sale. However, in 2021 the incoming Biden administration ruled that the lease sale EIS was deficient. BLM then placed a moratorium on the permitting of ANWR lease related activities until the EIS had been reworked. Knik Arm Services and Regenerate Alaska subsequently relinquished their leases.

The new draft SEIS claims that there were multiple legal deficiencies in the original EIS, including, but not limited to, an insufficient analysis under the National Environmental Policy Act and a failure in the record of decision for the EIS to correctly interpret a section of the Tax Cuts and Jobs Act. And BLM says that the draft SEIS continues to support the statutory mandate for Coastal Plain oil and gas lease sales.

The tax act allowed a maximum of 2,000 acres of total surface disturbance. BLM has told Petroleum News that the ROD was deficient because it had not considered any alternatives with less than 2,000 acres of surface disturbance, on the incorrect assumption that the act required BLM approval of production and support facilities up to that 2,000-acre limit.

A more restrictive alternative

In the context of what the SEIS refers to as insufficient analysis under NEPA in the original EIS, the SEIS has developed a new Alternative D for addressing the mandate for ANWR leases sales. This new alternative incorporates more lease stipulations for environmental protection than any alternatives previously considered and specifies a higher acreage of land where surface operations would not be allowed. In evaluating potentially needed surface operations the lead agencies developing the SEIS took into consideration the potential use of horizontal directional drilling that could extend six miles or more from a surface drilling location.

Alternative A of the SEIS is the customary "no action" alternative, in which no lease sales would be conducted. This alternative clearly violates the Tax Act and would not, therefore, be legal to implement. Alternative B is broadly similar to alternative B of the original EIS and would allow leasing and seismic surveying across the entire lease program area. The alternative would allow a total of up to 2,000 acres of surface disturbance, the maximum allowed under the Tax Act. Alternative C somewhat limits the land available for leasing and only allows seismic surveying in leasable areas. Surface disturbance would be limited to 1,464 acres and there would be more prescriptive required operating procedures than under alternative B. Alternative D is the most restrictive of the alternatives, with surface disturbance limited to 1,040 acres.

BLM anticipates publishing a final SEIS following a public comment period on the draft document. A subsequent record of decision will presumably document a preferred alternative from the SEIS for conducting ANWR lease sales.

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