Receive free Oil & Gas industry updates
We’ll send you a myFT Daily Digest email rounding up the latest Oil & Gas industry news every morning.
The White House on Wednesday scrapped controversial oil leases in an Alaskan wildlife reserve that were awarded in the final days of the Trump administration as part of a broad effort to clamp down on Arctic drilling.
The leases in the Arctic National Wildlife Refuge were issued on January 6 2021, days ahead of Trump’s departure from office, but were suspended six months later by the Biden administration’s interior department.
Their cancellation on the basis of “multiple legal deficiencies” comes as President Joe Biden’s White House looks to brandish its environmental credentials in the face of criticism over support for fossil fuel projects.
“President Biden is delivering on the most ambitious climate and conservation agenda in history,” said Deb Haaland, interior secretary. “The steps we are taking today further that commitment.”
The move — which comes alongside tighter restrictions on exploration in Alaska’s National Petroleum Reserve — has been viewed as largely symbolic as there had been minimal interest in drilling in the leased territory, with all the leases ultimately held by a state agency, the Alaska Industrial Development and Export Authority.
“It was helpful to cancel the Trump leases, which had legal and scientific deficiencies,” said Carl Tobias, a law professor at Richmond university. “However, the state of Alaska is the only entity which has expressed interest in drilling in ANWR and it appears that few others have interest in the NPR.”
Although no drilling had been under way in the licensed areas, Wednesday’s announcement drew praise from environmentalists and some indigenous leaders, while pro-industry voices bemoaned an attack on the sector.
The Sierra Club described it as a “historic move” that would protect the state’s landscape. “Oil and gas drilling in the Arctic Refuge is incompatible with the long-term survival of the Arctic,” said Ben Jealous, executive director of the group.
Republican allies of the oil industry in Congress blasted the decision.
“President Biden’s war on American energy continues,” said John Barrasso, a Republican senator from Wyoming and ranking member of the Senate committee on energy and natural resources. “He is ignoring the law and making us more dependent on foreign oil. Not only is this bad energy policy, it’s bad foreign policy.”
The announcement comes months after the Biden administration sparked outrage among environmentalists for its decision to approve ConocoPhillips’s $8bn Willow oil project in the NPR.
The White House also formally proposed rules to protect the NPR on Wednesday, the country’s largest bloc of public land, a move that was signalled in March. The rules will prohibit new oil and gas leasing in approximately 40 per cent of the area.
Biden has walked a tightrope on climate and energy security, setting aggressive decarbonisation targets for a country that consumes a fifth of the world’s oil output — but also urging drillers to boost production to tame petrol prices that rose to a record high last year and remain well above the level when he entered office.
The US Geological Survey estimates that the refuge contains approximately 8bn barrels of recoverable oil, a fraction of US reserves. Drilling in shale deposits in the lower forty-eight states has made the country the world’s largest oil producer.