A federal judge in Alaska ruled that the Biden administration lacked the authority to cancel oil and gas leases in the Arctic National Wildlife Refuge (ANWR) that had been issued during Trump’s presidency. The ruling favors the Alaska Industrial Development and Export Authority, which argued that the lease cancellations violated a 2017 law mandating drilling opportunities in ANWR.
The decision paves the way for the Trump administration to reinstate the leases, aligning with its broader push for U.S. energy dominance. The Interior Department, now under Trump, has pledged to move quickly to restore the leases, while Alaska officials see the ruling as a major win for the state’s economy.
History of ANWR Oil Leases
The crux of the case is the 2017 Tax Cuts and Jobs Act, which passed during President Donald Trump’s first term in office. The law dictated two lease sales for oil and gas development within the coastal plain of ANWR. The massive land area, which spans about 1.56 million acres of biodiverse wilderness, contains significant oil reserves. However, the reserve is also home to an intricate ecosystem that has become one of the most controversial plots of land in the past few decades.
In 1980, Congress avoided placing permanent protection on the land area because of the potential enormous oil reserves it contained. The USGS estimates that there are between 4.3 and 11.8 billion barrels of oil in the coastal plain. In comparison, Kukaruk, Alaska’s second largest oil reserve, contains 2.5 billion barrels.
In 2017, Congress passed the Tax Cut and Jobs Act, which allowed drilling along ANWR’s Coastal plain for the first time in history. In the days just before President Biden took office, the Alaskan Industrial Development and Export Authority (AIDEA) secured leases on just under 400,000 Acres in ANWR that included 10-year terms.
However, on January 20th, 2021, the Biden Administration issued an executive order demanding that the Department of the Interior place a temporary pause on all activities related to the coastal plain oil and gas leasing program. The former president’s executive order fulfilled his campaign promises to protect the Arctic Reserve from drilling, suspending the leases pending environmental review. In September 2023, his administration officially canceled them, claiming ecological concerns and the need for further study.
AIDEA sued the federal government, stating that the least cancellations violated the terms set forth in the 2017 Tax Cuts and Jobs Act. The agency argued that it was unlawful for an executive order to cancel leases, claiming only a court order, not an executive order, had the authority to nullify leases. A lengthy and arduous court battle ensued, ultimately ruling in favor of the AIDEA.
Ruling & Implications
Near the end of March, U.S. District Court Judge Sharon Gleason agreed with AIDEA’s arguments, stating that the Interior Department failed to follow congressionally mandated procedures for canceling the leases. Gleason, appointed by President Barack Obama, sent the matter back to the Interior Department for further action.
An Interior Department spokesperson told Reuters, “The Department of the Interior is moving quickly to reinstate the wrongfully terminated leases, consistent with President Trump’s order to unleash Alaska’s energy resources and further ensure American energy dominance.”
Cori Mills, Alaska’s deputy attorney general, claims the ruling as a “definite victory,” stating, “The state looks forward to working with the current federal administration on fully realizing the vast potential of ANWR to grow Alaska’s economy and help America’s energy independence.”
Opening the Door for Alaskan Drilling Again?
While the ruling does not mean immediate drilling for the coastal plain in ANWR, it does open the door for future bids on leasing in the area. Under Trump’s leadership, the Department of the Interior has been directed to proceed with further action on this issue. Although there’s ample support from both energy companies and Alaskan republicans, the vast opposition from environmental groups presents the likelihood of further legal challenges in the future.
Although the possibility seems more positive, thanks to this ruling, AIDEA had little competition when it first won the majority of lease sales in 2021 after all significant oil companies declined to bid. This may be due to environmental concerns, potential instability of drilling in the area due to opposition, or the financial strain of drilling in the region. However, following Judge Gleason’s ruling, there’s likely to be an increase in bids in the near future.
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