Repealing Arctic Refuge oil program makes fiscal sense

The fight over drilling in the Arctic National Wildlife Refuge has been raging for decades, and during that time, Republicans have attempted to use budget reconciliation five times to open the Arctic Refuge to oil drilling, finally succeeding through the 2017 Tax Act.

The oil and gas leasing process that followed failed the American people at every turn, ending with a failed lease sale in January. The dismal revenue produced, and complete lack of oil industry interest guarantees that American taxpayers will see zero financial benefit from future selloffs of America’s Serengeti.

We have long known of the on-the-ground risks from Arctic Refuge development to the region’s Indigenous peoples and wildlife, not to mention the broader climate impacts of opening a new Arctic frontier to drilling.  Combine that with today’s fiscal reality and repealing the Arctic Refuge oil program is clearly the only logical path forward.

The good news: A budget reconciliation bill has been marked up in the U.S. House that includes a necessary provision for Congress to repeal the Arctic Refuge oil and gas program:


REPEAL OF THE ARCTIC NATIONAL WILDLIFE REFUGE OIL AND GAS PROGRAM. — Section 20001 of Public Law 115–97 is repealed, and any leases issued pursuant to section 20001 of Public Law 115–97 are hereby canceled, and all payments related to the leases shall be returned to the lessee(s) within 30 days of enactment of this Act.

The House Natural Resources Committee language will now be packaged with sections from other committees and sent to the House Budget Committee and the House Rules Committee. When all House committees have acted, it will head to the House floor for debate with amendments, before a final vote on passing the bill. Then it’s off to the Senate, and at the end of the process — after debate, amendments and final vote on the Senate floor — the House and Senate will pass identical bills and send that final version to President Biden for his signature. The entire process will likely go deep into the Fall season — if not later.

As far as the Arctic Refuge oil and gas program is concerned, it’s impossible to overstate the degree to which the initial lease sale earlier this year was an epic failure. No major oil companies showed up to bid, only nine tracts were sold out of 22 offered, and the sale generated a mere $12 million — less than 1% of the revenue that was projected. Seven of the nine leases awarded went to an Alaska state entity that had never bid on oil leases before, and half of the $12 million the sale generated must be paid out back to Alaska. Per-acre bid prices were projected in 2017 to be $2,250 — in reality, the average price per acre was just $27.67, literally pennies on the dollar.

Drilling in the Arctic National Wildlife Refuge is simply bad business, to the point where dozens of the world’s largest banks — including the six largest in the U.S. and five largest in Canada — have put policies in place against financing Arctic Refuge oil. The remote nature of the refuge, the global appetite to limit climate pollution, the negative impacts oil development would have on the region’s Indigenous communities and wildlife — combined, these make drilling on the coastal plain a dangerous and expensive risk that’s not worth taking.

Congress and the Biden administration might not get a better opportunity to work together to restore protections for the Arctic Refuge. Repealing the Arctic Refuge oil and gas program is an act of fiscal common sense, with the bonus that it’s also the most important action Congress can take right now to protect threatened Arctic wildlife and ensure the rights, culture, and sacred lands of Gwich’in and Iñupiat peoples remain intact.

Cover photo: A polar bear on the Arctic coast in the Arctic National Wildlife Refuge, near Kaktovik, Alaska. (Jennie Gosché)