Opinions mixed on US order to open northern Alaska to further oil, gas exploration

Alaskans are optimistic but cautious about a new US Department of Interior order opening up land in northern Alaska to further oil and natural gas exploration.

Interior Secretary Doug Burgum ordered March 20 relaxed restrictions on federal lands in the Arctic National Wildlife Refuge, the National Petroleum Reserve-Alaska and the Trans Alaska Pipeline System corridor from the North Slope to Interior Alaska.

Governor Mike Dunleavy, a Republican, applauded the order.

"This will provide more investment opportunities, more jobs and a better future for Alaskans," Dunleavy said in a statement.

However, many in the state reserve judgment until more details are released on Interior's plans.

"I like what I hear but I have questions about how quickly this can be implemented," said Richard Garrard, a petroleum exploration geologist in Alaska. "I'd like to know the timeline. This administration has four years and there will be a different president after that."

Burgum's order generally restates announcements earlier from President Donald Trump on unleashing exploration and development in Alaska with a few more details, but not specific actions planned.

The Arctic National Wildlife Refuge's 1.56-million acre coastal plain was opened to exploration in 2020 under the 2017 Tax Cut and Jobs Act with two lease sales held. The leases were canceled by President Joe Biden's interior secretary, Deb Haaland.

Alaskans knowledgeable about ANWR say the quickest way for Burgum to get exploration underway would be to restore the leases, which were held by a state of Alaska entity, the Alaska Industrial Development and Export Authority, terminated by Haaland.

Lawsuit still pending over contested leases

A lawsuit filed by the state authority, known as AIDEA, in federal court contesting the lease termination is still pending.

Burgum could also hold a new lease sale in the coastal plain area, which would take time, but he would also have to deal with AIDEA's lawsuit and its claim on seven leases acquired in the 2020 lease sale, which was held under the first Trump administration.

One complication is that there are now differing federal environmental impact statements and sets of lease terms and stipulations on ANWR leasing that Burgum will have to resolve.

The first EIS was for the first lease sale, under Trump, which has been called too lenient. The second EIS was revised and tightened by Haaland for a second lease sale in 2024 that attracted no bids.

If Burgum opts to issue AIDEA's leases or hold a new sale under the more relaxed 2020 EIS and lease stipulations, instead of the more recent and restrictive EIS and lease terms issued by Haaland, conservation groups will be quick to sue, said Cooper Freeman, Alaska director of the Center for Biological Diversity.

Burgum will have to explain in court why the lease terms are being relaxed, Freeman said. That could be challenging because it will require scientific explanations over the differences in protective measures for wildlife like polar bears and caribou.

"This could be challenging because it will require scientific explanations on the differences in protective measures for polar bears and caribou," said a person familiar with regulatory programs who asked to remain unidentified.

Bulk of NPA-A reserve is leasable

Another part of Burgum's March 19 order deals with the 23 million-acre National Petroleum Reserve-Alaska on the western North Slope. He announced March 20 that 82% of the reserve will be available for leasing. Currently only about half of the NPR-A is available.

Federal geologists have said that much of the large NPR-A, particularly the southern and western parts, have relatively little oil and gas potential, and companies have expressed little interest in those areas.

The attractive part of the petroleum reserve is in the northeast, where ConocoPhillips has made discoveries and is now developing its Willow project. ConocoPhillips holds a large block of existing federal leases in the area and has said it will explore those.

Similarly, Australia E&P company Santos, now developing its Pikka discovery on state lands near the NPR-A, holds an extensive group of leases to the west in the federal reserve, which has potential.

Garrard, the Alaska exploration geologist, is familiar with the NPR-A and believes it has more potential for large discoveries than ANWR to the east and can be explored with less of the political complications and lawsuits that will come with reopening the coastal refuge.

Sensitive coastal wetlands

One caveat to this, however, is whether Burgum's NPR-A plan will include leasing of ecologically sensitive coastal wetlands north and west of where ConocoPhillips is developing Willow. The Teshekpuk Lake area near the Beaufort Sea coast, for example, is a prime nesting area for migrating waterfowl. The Teshekpuk area is also judged to have significant petroleum potential but has been protected through several presidential administrations including Republican-led ones.

It is unknown whether Burgum will now offer this. If it is proposed for leasing, it will draw intense challenges not only from major conservation groups but also from recreational hunters interested in protecting migratory birds.

A third part of Burgum's order will be of strategic importance to Alaska. It would transfer federal lands in the Trans-Alaska Pipeline System federal land corridor to the state. It has long been a state priority to gain control of this area, Alaska officials said.

The state has worked for years to get an old Public Land Order lifted that restricts access to the so-called TAPS corridor, and that dates from the 1970s. The goal is for the state to assume ownership of the lands through its 1959 Alaska Statehood Act land entitlement, according to Brent Goodrum, deputy state commissioner of natural resources. Lifting the public land order would allow the state to select and control the lands, Goodrum earlier told Platts, part of S&P Global Commodity Insights.

The concern is that the lease of the federal pipeline right of way through the corridor must be renewed periodically and if there could be a future federal administration less friendly to oil and when the lease renewal happens.

"Control of the TAPS corridor," Goodrum said, "is vital to protecting the state's interests in future North Slope oil."