While riotous insurrectionary terrorists stormed the U.S. Capitol building on Wednesday, a bit of otherwise big news regarding the federal government went largely unnoticed. The White House’s push to rush sales of oil and gas drilling leases in the Arctic National Wildlife Refuge resulted in a big dud. The lease sale was announced back in November, with the apparent goal of holding the sale just days before the Biden administration took office. But only half of the 22 tracts available for lease were sold; most of them were bought by the state of Alaska with the hope oil companies will some day want them.
Because they sure didn’t want them when the sale was held this week. Not a single major oil company bid on one of the tracts. The only two other tracts not purchased by Alaska were bought a sole real estate investor and an Australian energy company, and it’s unclear whether either party has the desire or ability to drill on the properties, or if they’re simply hoping to flip them.
All in all, only about $14 million dollars was raised in the lease sales. It was hoped by officials in the White House that the lease sales would generate close to $1 billion.
But oil companies weren’t clamoring over themselves to develop an oil extraction infrastructure in ANWR. The crashing price of oil as well as an energy future that will increasingly move away from fossil fuels meant that hugely expensive projects like recovering, storing, and shipping oil from remote Alaska wasn’t a clear financial gain for established fossil fuel companies.
Such a financial windfall “was always a far-fetched fantasy and these results prove it,” said Autumn Hanna, vice president of Taxpayers for Common Sense, a watchdog group in Washington, D.C. in a New York Times story.
Kara Moriarty, head of the Alaska Oil and Gas Association, said in a statement: “Today’s sale reflects the brutal economic realities the oil and gas industry continues to face after the unprecedented events of 2020, coupled with ongoing regulatory uncertainty.”
“It was, in the oil industry terms, a dry hole. A bust,” said Larry Persily, an oil and gas expert in Alaska, in an Alaskan Public Media story. “They had the lease sale, the administration can feel good about it, but no one’s going to see any oil coming out of ANWR.”
Next, the 10-year leases that were sold have to approved by the Department of Justice, and with a new administration, that provides its own kind of headwind.