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Just two weeks before President-elect Joe Biden takes office, the Trump administration is trying to lock in oil and gas drilling in Alaska's Arctic National Wildlife Refuge with a hastily scheduled and controversial lease sale.

The sale, to be held Jan. 6, marks a major moment in a 40-year fight over whether to

the northernmost slice of the refuge's coastal plain, home to migrating caribou, birds and polar bears.

Biden, as well as his pick for Interior Secretary — Rep. Deb Haaland — oppose drilling in the refuge. The hand-off of drilling rights to the highest bidders could make it more difficult to reverse course.

But despite the high stakes, uncertainty looms over how much oil is actually trapped under the million acres of tundra up for leasing, and how much industry interest there is to go find it.

'We don't know very much about this area'

The data on what's under the coastal plain is decades old.

"We don't know very much about this area," says David Houseknecht, a geologist with the U.S. Geological Survey. Oil seeps and rock formations seem promising, but he says the agency hasn't 

estimated the coastal plain's oil potential since the late 1990s

Back then, it relied on seismic testing from a decade prior,

now outdated.  It found that anywhere from about 4 to 12 billion barrels of recoverable oil could lie beneath the federal lands. That's a whole lot of oil, but also "a very large range of uncertainty," Houseknecht says. "The seismic data that we have are quite old, low resolution and a sparse grid."

The other challenge, he says: There's no data from actual wells in the refuge.

Just one exploratory well has been drilled in the coastal plain, on Alaska Native land in the 1980s, and the results are a closely-guarded secret.

Mark Myers, a former commissioner of the Alaska Department of Natural Resources, is among only a few people who have seen the well results outside of the oil companies that paid for it. 

"I signed a confidentiality agreement, and it didn't have an end date on it," he says with a small laugh. "I can't comment on it, in terms of what I saw." 

 based on interviews and legal documents suggested the results were not promising.

Houseknecht says geologists don't know more about the coastal plain's oil potential because it wasn't until late 2017 that Congress decided to allow drilling there, after decades of debate.

In recent years, he says, USGS had the 1980s seismic data commercially reanalyzed and planned to use it for a new oil assessment. But after the opening of the refuge three years ago the Interior Department called off the work without providing a reason

As for who will bid in the lease sale, that's another mystery. 

Oil and gas companies aren't talking about their plans publicly, which isn't surprising, says Kara Moriarty, head of the Alaska Oil and Gas Association, an industry trade group.

"Participation in lease sales is one of the most competitive and secretive things between companies," she says. 

Bidding has already taken place, but Moriarty says she doesn't expect to know

until the federal government unseals companies' bids during the Jan. 6 event, which will be streamed online.

Oil industry analyst Rowena Gunn, with the research firm Wood Mackenzie, believes enthusiasm could be "fairly lukewarm." 

"It wouldn't necessarily be good PR for them to be seen as drilling in the Arctic, or drilling in environmentally-sensitive areas," she says.

Environmental organizations and some tribal groups have been lobbying oil companies, banks and other financial institutions to stay away from developing the refuge. A

number of major banks say they won't fund oil projects in the Arctic. 

Opponents have also filed multiple lawsuits seeking to block drilling. 

They've raised concerns about its impacts on Indigenous people, the global climate, and wildlife, including the caribou that give birth in the coastal plain and the polar bears that den there. Even if leases are sold, legal experts say it's possible that  courts could later cancel them.

to concerns about wildlife, as well as oil industry interest, the Bureau of Land Management recently

 nearly a third of the original 1.6 million acres from the sale. Geologist Houseknect says those areas do not have high potential for oil. 

Supporters of drilling the refuge, including many Alaska politicians, argue that it's good for the economy and jobs.

Republican U.S. Sen. Lisa Murkowski worked with the White House to open the coastal plain to drilling as part of Trump's massive 

.  The idea was to create revenue to offset tax cuts, so the legislation directed the federal government to carry out two oil and gas lease sales by 2024.

The Congressional Budget Office estimates the leasing program could 

generate a windfall of $1.8 billion over a decade

, to be split between Alaska and the federal government. 

Critics of the sale, including the watchdog group 

, say they expect the dollar-figure to be much lower. 

"For right now, this absolutely seems to make no fiscal sense," says Autumn Hanna, vice president of the group. "We don't need the oil. Why would we be going into such hard-to-access, sensitive places where the costs of exploration and development are so high?"

Myers, the former Alaska commissioner, agrees development costs could dampen interest.

It's already more expensive to drill in the Arctic compared to, say, Texas. On top of that, he says, oil prices are still relatively low after an oil-price war and the coronavirus pandemic 

"The prices have fallen down to a level that leaves very little capital for exploration in these companies," Myers says. "So that's one of the biggest negatives."

perhaps the greatest uncertainty is the changing administration. 

he opposes drilling in the refuge, and that he'll take steps to permanently protect it, though he hasn't said how.

It's possible his administration could delay the environmental permitting process for companies that buy leases from the Trump administration. Or a Biden administration could try to buy the leases back. 

Citing concerns about limited industry interest, Alaska politicians have lobbied for the state to step in. The board of a state-owned economic development corporation 

voted to bid up to $20 million at the lease sale. 

The idea is the corporation could operate as a backstop, to submit minimum bids on the tracts and secure drilling rights in case no one else makes any offers. Then, at some point, it could partner with oil companies to do the actual drilling.  

If any leases are bought and finalized, it will be just the start of a long process. Industry analysts say it would take at least a decade to actually pump oil out of Alaska's Arctic refuge. 

Business and Economic News

Environmental News

Politics and Government News

Tegan Hanlon

Author

There's little solid data on how much oil is under Alaska's Arctic National Wildlife Refuge, and lawsuits and market forces could dampen industry interest. Any leases would also face opposition from a Biden administration.

After decades-long push, it's not clear who will bid in Arctic refuge oil lease sale

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