Arctic Drilling Push Comes Down to Trump's Final Days

an episode we ran about three months ago. Back then, Bloomberg News reporter Jennifer to Louis told you guys about how the Trump administration might try to auction off oil drilling contracts for the Arctic National Wildlife Refuge. For those of you who are unfamiliar, this area, also known as anwar, is millions of acres of wilderness in northeastern Alaska that may contain a mother load of oil and gas reserves.

The federal government has been debating about whether to allow drilling in this environmentally sensitive area for a long time, like a really really long time. Don't believe me. Here's President Obama twenty fifteen. It supports caribou and polar bears all manner of marine life. Here's Alaska Senator Lisa Rakowski in two thousand and nine. Drilling operations in Arctic waters. And here's former House Speaker John Bayner in two thousand

and eight. Eight. They're going to great lengths to ensure that they can produce this oil in an environmentally sound way. And here is current House Speaker in Nancy Pelosi also two thousand and eight. You have the go ahead to drill here, Why do you want to drill in the Anmar any one more? Here's former VP nominee and then Senator Joe Lieberman in two thousand and five. One of the reasons I wanted to go to the Senate was to fight to protect the Arctic Refuge, the Arctic plane.

Here's President George W. Bush in two thousand and one. And bring more energy into the marketplace. And a good place to look is going to be in war. And here's Joe Lieberman again, but this time all the way back in nineteen ninety one. In all of that, our capacity to produce the kind of going to get out of the refuge jet, it's most optimistic, will be a minuscule.

So you might be asking yourself, why is this time different. Well, a few months ago, Jennifer said, the Interior Department announced it plan to auction off the rights to drill in anwar as early as this year. Now, in the past few days, it's taken concrete steps to do exactly that. But unlike three months ago, now the administration has a

bit of a tight deadline to get this done. I invited Jennifer back on the podcast to talk about the latest developments with anwhar and also to talk about why, even if the Trump administration meets its deadline, drilling in this Arctic tundra may never actually happen. So, Jen Delouis, you were on this show back in August, we were talking about anwar, and now you're back here again and we're talking about anwar. What has changed in the last

few days. Can you give us an update? Absolutely? So. Back in August, the Trump administration was laying the foundation for a future sale of Arctic oil leases, and now it's actively charting a sale that could occur just days before President elect Joe Biden takes office on Monday, the Interior Department issued what's known as a call for nominations that asks oil companies to nominate tracks that should be up for grabs in a future lease sale and gave

them basically thirty days to respond. But a sale is no sure thing. Even if an auction is held before the swearing in noon on January twentieth, it's not clear that the Bureau of Land Management can actually get through a post sale process of vetting high bidders and actually award those leases. And that's critical because if these leases are formally awarded, the Biden administration has less room to maneuver and make good on his pledge to permanently protect

the refuge. So I want to get into more about the refuge itself. But I noticed that you mentioned the time of the inauguration at noon on the twentieth. Could that be a factor. Could they actually do an auction

like at nine am that day? That might be cutting it a little close, but I would not rule out activity that day to get done with Lisa's I mean, just to give you a sense of how tight this timetable is, Interior just signal to a federal court that they won't issue a notice of sale until after the call for nominations period is over, So that's December seventeenth

at the earliest, and they have to wait. So they have to wait at least thirty days after that to hold a sale, making the earliest auction possibility January seventeenth, but that's a Sunday, and the day after that is a holiday Martin Luther King Day. So unless they decide to do a notice of sale sometime in the next couple of weeks, that looks like a two day margin to hold a sale and undergo a post auction vetting of high betters that you know usually takes a couple

months and involves multiple agencies. So you know, they're under the gun here. They know it. But even sympathetic supporters of Arctic drilling who have worked in the Interior Department have told me they don't quite know how they get it done. So, you know, we're talking about trying to get it done before President like Biden takes office and

potentially hours before President like Biden takes office. But is there another factor going on here in terms of timing, because I get the sense that, you know, the last time that you and I talked, you mentioned that there's a congressional deadline here. This is a legal deadline that's in a law, you know, is that also playing a

role here? Absolutely? You're right. Congress in the twenty seventeen tax overhaul mandated that the Interior Department hold two lead sales of tracks on the Refuges Coastal Plane, one by December twenty twenty one and another by December twenty twenty four. Opponents of Arctic drilling are plotting ways they think the Biden administration can maneuver around that requirement without ever issuing a lease, but it's not clear that they'll be successful.

And regardless, this is something that the Biden administration will have to deal with. These dates are codified in law, so we're talking about, you know, a real race against the clock here. But so it's possible that they could just the administration could just run out of time. But let's say they don't. Are there other things that could scuttle the auctions here? Could a court step in? Could

Congress step in? Are there other outside parties? So absolutely a court could step in, and that's probably the highest risk for the Trump Interior Department. There are currently several pending legal challenges to aspects of this leasing program, and you can bet that environmentalists and indigenous groups will be going to court to seek an injunction blocking any sale that the Interior Department authorizes. Before we get into what's

going to happen afternoon on January twentieth. Let's talk about who wants the rights to drill for oil in Alaska. You know, oil prices are not as low as they were earlier this year, but they're still really low. And as we talked about three months ago, it is not easy to drill for oil in this part of the world. Who is clamoring to get the rights to drill here, right,

I mean, so that's the big mystery. Well, there are two mysteries here really, you know, it's who is clamoring for these rights to drill and why the heck do they want them? And you know, the operational cost on the refuge are really really high. This is an area that is just it's difficult to operate in and costly to operate in. The low price of crude a may dure for some time. The reality is under the Biden administration, a leaseholder is not likely to get permits over the

next four years. So all of those things are obstacles. And that's not even mentioning, by the way that the black Eye publicly that any leaseholder is going to take I mean, arcite drilling is not pup popular with the entire public and an activist have warned oil companies that if they bid, they are risking real reputational damage to their brand and their reputation. So that's all a factor. So then I have to think, you know, you have to think, why do these folks, why would anyone bid

for these tracks? And there's a few schools of thought, but one is they're bidding on a post Biden future, four years down the line, where maybe a friendlier administration will allow them to drill. There's also the possibility that folks who win leases can challenge in action by a Biden Interior Department on those leases and essentially force a legal sediment where that those rights are bought out from

under them are bought back by the federal government. Also, these leases potentially could add to companies oil reserves, the assets that they can book. So there's some opportunity there to add to your assets maybe, and that could be one factor. But ultimately we may be talking about leases that go for two dollars an acre. That's relatively cheap if they want to buy them, even given all these headaches and problems. I think that's not just relatively cheap,

that's cheap in any sense of the word. But I really I'm glad you brought up the reputational risk because that was another thing that I got from your reporting that I thought was really interesting that there are even several banks that have publicly committed to not lend to

any company that is drilling in this refuge. I mean, it's it just sounds like it'd be so hard, like the price of crude would have to be so high to justify the costs of doing this, right, I mean, I guess, and I mean it's not out of the question that we could see higher crude prices again, but I mean, wow, how high would they have to be? Right, right?

I mean, I think the oil companies and people in the industry will say and will say that you know, these are not this is not something that would go into operation four years or even ten years down the line. So what they're doing here is charting oil development and production that might happen, you know, a decade or two decades down the road. So the question isn't really what the oil prices are today, but of course twenty years from now, so it is of course conceivable that you know,

we're looking at triple digit prices in twenty forty. But it's also conceivable that the world will be moving on from oil and will be even more aggressively looking for non fossil alternatives to power our cars and our homes. So, you know, these are all calculations that these companies have to be making. But finally, let's move back to the

more the shorter term than a twenty forty. So let's say that Trump administration wins its race against the clock and is able to get these auction you know, these auction off these rights before or you know, inauguration. You hinted at this earlier, but I want to get a little bit more deeply into this. It sounds like there's still a lot of tools that the Biden administration would have to prevent this from moving forward. Can you talk a little bit about that, about what the Biden administration

could do right? You know, if the leases are sold before Biden takes office, these oil companies have in their hands a contract with the government, and that gives them some rights, but that piece of paper is not a

guarantee they'll ever get to drill. And activists and others who are informing the Biden transition team are very aware of that, these companies will need a slew of permits to mount operations, So that includes, of course a drilling approval, but it also includes Clean Air Act authorations, animal take permits, rights of way, just a slew of authorizations, and every single one of those under a Biden administration that is not inclined to let these folks drill will become an obstacle.

So there's no reason to think they'll get any of these. And even if the Interior Department and other agencies under Biden just moves slowly on every one of these steps, that could block activity for years. A smart analyst reminded folks Monday that slow can also no. That's it for today's episode of Parts per Billion. If you want more

environmental news, check us out on Twitter. We use the handle at environment just that at Environment, I myself am at David B. Schultz if you want to discuss anything with me. Today's episode of Parks Pavillion was produced by myself and Josh Block. Parts Provillion was created by Jessica Coombs and Rachel Daegel. Music for today's episode is a message by Jazar and dash Rhydom by Jamie Wilder and Johann Sebastian Bach. They were used under a Creative Commons license.

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