Anchorage — An Alaskan state corporation may bid for acreage in a Jan. 6 federal lease sale in the Arctic National Wildlife Refuge.
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The Alaska Industrial Development Authority, or AIDEA, the state's development finance corporation, will seek approval from its board Dec. 23 to place up to $20 million in bids for the acreage.
In a related development, the US Bureau of Land Management, or BLM, removed 475,000 acres from sale, which originally planned to offer 1.6 million acres for lease, due to environmental sensitivities.
The deleted tracts are in the southeast corner of the coastal plain, the portion of the refuge opened for leasing.
BLM ordered 10 tracts to be deleted after comments from conservation groups highlighted the importance of the acreage as caribou and snow geese habitat.
Alaska's bidding in the sale is a contingency in case bidding from industry is light and some tracts receive no bids, Alan Weitzner, executive director of AIDEA, said.
The authority's board is being asked to give Weitzner approval to submit lease offers if it appears there will be little interest from companies.
If the state obtains leases it would work with companies in a farm-out, or sublease, arrangement, for subsequent exploration, particularly after data from a 3D seismic exploration program set for this winter and spring is available.
It is not clear if BLM will approve the seismic program but it would not be completed in any event prior to the Jan. 6 lease sale.
Concerns on lack of interest from industry
State officials have talked about bidding in an ANWR sale for some time but the recent interest was motivated by former Alaska Governor Frank Murkowski who urged the state to bid after becoming concerned about light interest from industry and opposition to the sale.
AIDEA has participated in financing several small oil and gas exploration and development projects on the North Slope and in Cook Inlet but has not actually sought to acquire leases.
It is likely that geologists from the state Department of Natural Resources, which has access to ANWR geological data, will advise the authority in submitting bids and negotiating farmouts to companies if leases are acquired.
In addition, the state has access to confidential data from the lone exploration well drilled in the coastal plain, a Chevron-BP drilling initiative in the early 1980s.
Information from the KIC No. 1 well has never been released. Although the well data is filed with the state there may be complications in using it in the lease sale, however, since the well was drilled on a private 91,000-acre inholding in the refuge owned by two Alaska Native corporations, Kaktovik Inupiat Corp. and Arctic Slope Regional Corp. If the two Native corporations agree the data could be used.
BLM will conduct the lease sale 10 days before President-elect Joe Biden, who opposes ANWR leasing, is sworn into office.
If the sale comes off -- there are efforts underway by conservation groups to stop the sale in the courts -– the outgoing Trump administration is likely to move to award leases before Biden takes office.
That would create a property right for leaseholders, including possibly the state of Alaska, that could complicate efforts by Biden to thwart drilling on the leases.