Arctic Oil Lease Sale Could Come Next Year

The first lease sale in the Arctic National Wildlife Refuge could take place as early as next year, Senator Dan Sullivan from Alaska said at CERAWeek. Officials from the Interior Department were in Alaska to study various aspects of the sale, which was stipulated in the tax reform bill that President Trump signed into law last December, S&P Platts notes.

The law obliges the Interior Department to hold at least two lease sales for the ANWR over the next decade, offering a minimum of 400,000 acres in total. However, there has been strong environmentalist and Democrat opposition to the stipulation. Opponents have pledged to fight the lease sales in the wildlife refuge by all legal means available.

So far, an environmentalist group has launched an ad campaign against four Republican House members who voted in favor of the tax reform bill and whose votes turned out to be crucial for its approval.

Democrats, for their part, are hoping to regain the majority in the House at this year’s elections and launch a legislative offensive against the Arctic drilling provision.

Meanwhile, Alaska’s state administration has asked the legislature for US$10 million to start a seismic survey campaign in the ANWR aimed at encouraging oil and gas companies to consider bidding for the acreage to be offered under the new law.

Related: How Feasible Are Electric Trucks?

It remains to be seen how interested the oil industry will be in drilling in the Arctic, especially in a wildlife refuge. Oil and gas drillers are much more cautious these days than they were a decade ago, and their top priority in the United States is, for now, the shale patch. Arctic drilling is a challenging task in any case, but when environmentalist opposition is added to the equation, the challenges may become one too many.

Alaska’s oil production has been falling, and the state is seeking ways to reverse the trend. The Energy Information Administration has projected that the state will produce an average 500,000 bpd next year. That’s down from 2.09 million bpd 30 years ago.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Nigeria Can Produce Oil At $20 A Barrel
• Shell Takes Major Steps Toward Energy Diversification
• IEA Predicts Nightmare Scenario For OPEC