Trumponomics Fails Its First Test—Just Seven Bids, $1.2 Million
The federal oil-lease sale promoted as the largest ever in Alaska’s Arctic Reserve sold only seven tracts, or 0.8% of the 900 tracts offered, undercutting Republican arguments that they can help pay for their proposed $1.5 trillion tax cuts for the wealthy by selling oil leases in the Alaskan wilderness.
ConocoPhillips Alaska and Anadarco E&P Onshore LLC jointly submitted bids totaling $1.2 million, leasing 79,998 acres of the 10.3 million acres offered.
The highest bid amount per acre in Wednesday’s lease sale was $14.99, about $35 less than an average bid for drilling in the National Petroleum Reserve since 1999. Oil companies would have to bid an average of $2,400 per acre for each of the 1.5 million acres on the coastal plain of the Arctic National Wildlife Refuge to meet Trump’s budget.
“Current presidential and congressional budget projections are unrealistic, and … it would be fiscally irresponsible to pursue this path on a budget justification,” said David Murphy, an assistant professor of environmental studies at St. Lawrence University.
Alaska’s National Petroleum Reserve, the single largest parcel of public land in the United States, was created in 1923 by former President Warren Harding when Navy vessels were being converted to run on oil instead of coal.
The reserve holds an estimated 896 million barrels of recoverable oil and about 53 trillion cubic feet of natural gas, according to a 2010 estimate from the U.S. Geological Survey. Five areas of the nearly 23 million-acre reserve have special protection under a 2013 land management plan, including the shallow Teshekpuk Lake, larger than Lake Tahoe.
In May, Interior Secretary Ryan Zinke ordered a review of the reserve’s management plan.
“The road to energy dominance goes through the great state of Alaska,” Zinke said.
Lisa Bruner, company Alaska vice president of North Slope operations and development for ConocoPhillips, has said the company will ask Bureau of Land Management to open up some territory near Teshekpuk Lake.
“If industry is allowed to enter into some of these very sensitive habitat areas, it would change these areas permanently,” said Nicole Whittington-Evans, the Alaska regional director for the Wilderness Society.
The lease sale comes amid layoffs in Alaska’s oil fields. North Slope oil and gas employment peaked at 13,485 jobs in March 2015 but has fallen to levels last seen a decade ago as oil prices have fallen. In October, Alaska had the nation’s highest unemployment rate at 7.2%.
Murphy, the St. Lawrence University assistant professor, said the expectation that oil prices will remain high enough to justify a long-term investment in the Arctic Refuge has not been supported historically.
“Today, many analysts are projecting low oil prices for decades,” Murphy said.