Here’s what you need to know about the Arctic National Wildlife Refuge’s first-ever oil lease sale

An icy, snow expanse of land.
The Canning River in the Arctic National Wildlife Refuge. (Randy Brown/USFWS)

Two weeks before leaving office, the Trump administration is planning to hold the first-ever oil and gas lease sale in the Arctic National Wildlife Refuge.

The sale, scheduled for 10 a.m. Wednesday in Alaska, is a controversial milestone in a 40-year battle over whether to drill for oil in a part of the refuge called the coastal plain.

So, how did we get here after such a long debate? And what will happen next? 

Here’s what we know so far. 

What, exactly, is the coastal plain?

The coastal plain, also known as the 1002 Area, is the northernmost slice of the Arctic National Wildlife Refuge along the Beaufort Sea. 

The Arctic National Wildlife Refuge’s coastal plain is shown in orange. (USGS)

It covers an area roughly the size of Delaware in northeast Alaska, and makes up about 8% of the refuge. 

There’s one village on the coastal plain: Kaktovik, where Inupiaq political leaders support drilling even as residents are divided on the issue. The land is home to migrating caribou, birds, polar bears and lots of other wildlife. It’s also thought to sit on top of, potentially, billions of barrels of oil.

For decades, conservation groups and Gwich’in tribes who live just outside the refuge have fought to protect the coastal plain from oil development, while many Alaska politicians have fought to open the area to drilling.

Dozens of caribou cover an expanse of tundra with mountains in the background.
Porcupine Caribou Herd in the 1002 Area of the Arctic National Wildlife Refuge coastal plain, with the Brooks Range mountains in the distance to the south. (USFWS)

With so much debate, how did the government get to a lease sale? 

Part of the story starts in 1980.

That’s when Congress passed the Alaska National Interest Lands Conservation Act. The act turned the existing Arctic National Wildlife Range into the larger Arctic National Wildlife Refuge as we know it today.

The act designated millions of acres of the refuge as wilderness, but not the coastal plain. Instead, in Section 1002 of the act, Congress asked the Interior Department to study the possibility of oil development in the coastal plain. It subsequently became known as the 1002 Area. Congress also reserved the power to decide later whether to open it to drilling.

And so began the fight over what to do with the land, which went unresolved for decades.

Then came 2017.

What big change happened in 2017?

The Tax Cuts and Jobs Act. 

Republican U.S. Sen. Lisa Murkowski worked with the Trump administration to open the coastal plain to drilling as part of the massive tax bill. It was pushed into the bill as a way to create revenue to offset tax cuts. 

Lawmakers stand around a pdium.
Sen. Lisa Murkowski delivers remarks about the opening of the 1002 area of the Arctic National Wildlife Refuge while President Donald Trump, Rep. Don Young and Sen. Dan Sullivan listen. (Alaska Public Media)

The bill directed the federal government to carry out two oil and gas lease sales in the coastal plain by the end of 2024, with the first by the end of 2021.

The Congressional Budget Office estimated the leasing program could generate $1.8 billion over a decade, to be split between Alaska and the federal government. 

But critics of the sale, including the watchdog group Taxpayers for Common Sense, said they expect the dollar-figure to be much lower.

Since Trump signed the tax bill into law, the federal Bureau of Land Management has led the environmental review process that’s required before a lease sale can take place. 

Opponents of the sale say the administration picked up a lot of speed — too much speed, they argue — in the weeks after the November presidential election to lock-in oil drilling. In early December, BLM set Jan. 6 as the date for a sale, while a 30-day comment window was still ongoing.

What is the Trump administration selling exactly?

It’s offering drilling rights to 22 tracts of federal land covering about 1 million acres of the coastal plain, about 5% of the whole refuge. 

The highest bidder on each tract will get a 10-year oil and gas lease for that piece of land. If a tract gets no bids, no one gets the lease.

A map of the Arctic National Wildlife Refuge coastal plain shows the tracts of land that will be included in an oil and gas lease sale on Jan. 6. The Bureau of Land Management has removed the numbered tracts shaded gray. (BLM)

What happens Wednesday? 

Those interested in buying the oil leases had to submit sealed bids to the government last month.

At 10 a.m. Wednesday in Alaska, government officials will open those bids in an event streamed online, at blm.gov/live, and accept the highest offers.

What happens after the sale?

Leases will not be issued on Wednesday.

The Department of Justice will need to conduct an antitrust review. Winning bidders must also sign paperwork and pay.

The process to issue leases usually takes about two months, but the Trump administration will likely try to finalize the sales in just two weeks, before Democratic President Joe Biden is sworn in Jan. 20.

Wait. Aren’t there a lot of lawsuits? 

Right. Looming over the sale are four lawsuits, filed by environmental organizations, the Gwich’in Steering Committee, tribal groups, and a coalition of 15 states

People sit around a table at a meeting.
Bernadette Demientieff, director of the Gwich’in Steering Committee, testifies at a U.S. House hearing in March 2019. (Liz Ruskin/Alaska Public Media)

In court documents, they argue the Trump administration’s oil-leasing program for the refuge is rushed and legally flawed, and any agreements based on it — including any leases — should, basically, be canceled. 

In three of the lawsuits, the groups requested a preliminary injunction.

That means they wanted U.S. District Court Judge Sharon Gleason to stop the government from issuing any oil leases for the refuge, and from allowing any seismic oil exploration, until the broader lawsuits are resolved.

But Gleason denied those requests late Tuesday afternoon.

RELATED: Federal judge denies requests to block Arctic refuge oil leasing

The lawsuits, however, will still continue.

What do we know about who will bid on the oil and gas leases?

Not a whole lot. 

BLM spokeswoman Lesli Ellis-Wouters said Monday the agency has received bids, but declined to say how many or who they came from.

Oil and gas companies aren’t talking publicly about their plans for the sale either. 

A spokesman for the Arctic Slope Regional Corporation, which seemed a likely contender to participate in the sale, confirmed on Tuesday that it’s not bidding. 

Oil industry analysts have said they expect interest in the sale to be lukewarm for many reasons.

A major one is the opposition.

RELATED: The Trump administration is moving to sell leases in ANWR, but will anyone show up for a sale?

People standing in front of white capitol dome holding banners that say protect the Arctic.
Rep. Deb Haaland, at podium, spoke at a rally in Washington, D.C. to oppose drilling in the Arctic National Wildlife Refuge in 2018, a few weeks before she was sworn in. President-elect Joe Biden has nominated Haaland to lead the Department of the Interior. (Liz Ruskin/Alaska Public Media)

Opponents to drilling in the refuge have raised concerns about its impact on Indigenous people, the global climate and wildlife, including caribou that give birth in the coastal plain and polar bears that den there.

They’ve lobbied oil companies, banks and other financial institutions to stay away from developing the refuge. A number of major banks say they won’t fund oil projects in the Arctic.

RELATED: Dunleavy wants state to cut ties with banks that won’t fund Arctic oil projects

Analysts say drilling in the Arctic is also expensive, and the costs will likely limit interest, especially after last year’s oil price war, paired with the pandemic, hit the industry hard.

a polar bear walks along the edge of a town. a building in the background and a snowmachine in the foreground
A polar bear walks along the edge of Kaktovik, the only village within the Arctic National Wildlife Refuge’s coastal plain. (Jeff Chen/Alaska Public Media)

On top of that, there’s uncertainty around future oil demand, how much oil actually exists under the coastal plain and the changing presidential administration. 

RELATED: The lease sale is set, but how much oil actually is under ANWR’s coastal plain?

Citing concerns about limited industry interest, Alaska politicians recently advocated for the state to participate in bidding. 

In a very unusual move, the board of the state-owned Alaska Industrial Development and Export Authority voted to bid up to $20 million on the leases.

An AIDEA spokeswoman declined to say this week whether the corporation actually decided to submit any offers.

Who can bid on the leases?

The federal rules are kind of vague, saying potential lease holders include pretty much any private, public or municipal corporation organized under the law. 

Ellis-Wouters, with BLM, said bidders must have an intent to develop the land.

Who supports drilling in the refuge and who opposes it?

It’s a complicated answer. 

Alaskans are divided on the issue, as is the country. 

A view from an airplane of vast tundra.
A view of the Arctic National Wildlife Refuge’s coastal plain on Friday, June 14, 2019, from a flight from the village of Kaktovik to the village of Fort Yukon. (Nat Herz/Alaska’s Energy Desk)

Many Alaska politicians, including the current congressional delegation, have long fought to open the coastal plain to drilling. Oil and gas industry trade groups also support developing the coastal plain, along with the Kaktovik Iñupiat Corporation, the Arctic Slope Regional Corporation and Alaska’s governor. They argue it’d be good for jobs, the economy and state revenue, and say drilling can happen without harming the land and animals. 

On the other side, environmental groups have long tried to keep oil rigs out of the refuge. They counter that there’s no way oil development can happen in the coastal plain without harming wildlife and the tundra — and without exacerbating climate change in a place that’s already warming fast. Among some of the most vocal opponents are the Gwich’in, an Indigenous group who say the land is sacred and whose members hunt caribou that commonly give birth in the refuge.

light-boards spell out "#ProtectTheArcticRefuge" over a highway
Defend the Sacred AK, a group opposed to oil development in the Arctic National Wildlife Refuge, set up a light-board banner across the Glenn Highway on Jan. 5, 2021, the night before the federal government plans to hold the first-ever oil lease sale for the Refuge. The light-board banner reads “#ProtectTheArcticRefuge.” (Jeff Chen/Alaska Public Media)

President-elect Joe Biden says he also opposes drilling in the refuge, but can he reverse oil leasing?

If the oil leases are finalized before Biden takes office, it would be more difficult to reverse course.

It’s possible Biden could try to buy the leases back.

Also, just because a company has a lease doesn’t mean it can immediately develop the land. Companies need permits and approvals for everything from searching for oil to building infrastructure. Analysts have said it’s possible a Biden administration could hold up that permitting process.

“What they would try to do is make it so difficult, so onerous, to get the array of permits that the companies just kind of say, ‘Well, we’re not going to spend 10 years just trying to get a simple permit, we’re going to put our money and our investment elsewhere,’” said Andy Mack, a former Alaska natural resources commissioner.

Meanwhile, in federal court, the lawsuits are expected to continue winding through the legal system, and a judge could later rule to cancel the leases. 

Still, the 2017 tax law exists. And it orders a second lease sale in the coastal plain by the end of 2024. Congress would have to pass a law to undo that part of the tax act if it doesn’t want to follow through. 

What questions do you have that we missed? Email reporter Tegan Hanlon at thanlon@alaskapublic.org

Alaska Public Media’s Nat Herz contributed to this report.