Biden administration cancels Alaska reserve's 7 remaining oil-drilling leases

By Rachel Koning Beals

Energy sector had shown lukewarm demand in bidding for all available leases

The Biden administration on Wednesday announced the cancellation of controversial oil and natural-gas leases in an Alaska federal wildlife refuge that were bought by a state development agency in 2021.

"With climate change warming the Arctic more than twice as fast as the rest of the planet, we must do everything within our control to meet the highest standards of care to protect this fragile ecosystem," Interior Secretary Deb Haaland said in a statement authorizing the cancellation of the seven remaining leases.

The Trump administration had granted the Alaska Industrial Development and Export Authority the rights to drill in the Arctic National Wildlife Refuge, a largely pristine area home to a number of species and to land considered sacred by the Gwich'in tribe.

Related: Biden administration freezes Alaska oil drilling leases that were among Trump's parting moves

The approval of seven leases came through a day before the 2021 inauguration of President Joe Biden, who had pledged to protect the 19.6-million-acre wildlife habitat.

In June 2021, the Biden administration said it would suspend the leases issued in ANWR pending an environmental review. The state agency sued, but a federal judge last month dismissed that claim, saying the government's delay in implementing the ANWR leasing program for review was reasonable.

For decades, some officials in Alaska, whose economy is fortified by fossil-fuel drilling, have fought for new leases in ANWR. But the oil and gas sector , in part due to regulatory uncertainty and the expense of necessary infrastructure, put up a lukewarm response to the 2021 lease sale, and two entities that participated and won leases at the ANWR sale withdrew from their holdings in 2022.

The Natural Resources Defense Council and other environmental policy groups responded favorably to news of Wednesday's lease-program withdrawal.

"Public lands are a public trust. They must be part of the climate solution -- not the problem," Manish Bapna, president and CEO of NRDC, said in a statement.

Separately, earlier this year, the Biden administration approved ConocoPhillips' (COP) large-scale Willow drilling project on Alaska's oil-rich North Slope.

That permission, although it came with conditions and moved along an approval process that was already well under way, was considered one of Biden's most consequential climate choices to date.

This summer marked the one-year anniversary of a major climate spending bill, the Inflation Reduction Act, which largely promotes tax incentives to switch to alternative energy sources for use in vehicles (TSLA) and homes instead of traditional fossil fuels .

Read: Climate winners and losers as the Inflation Reduction Act hits 1-year anniversary

Republicans, for their part, want to promote a different energy plan ahead of their challenge of Biden and the Democrats in the 2024 election. The GOP is pushing greater U.S. energy independence, which includes new drilling for domestic oil and natural gas alongside private-sector growth of wind, solar, nuclear and hydrogen power sources.

-Rachel Koning Beals

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09-06-23 1726ET

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