Alaska Sues Federal Government Over Curbs to Oil and Gas Leases

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Legal action preceded a Jan. 8 Department of Interior notice to restrict lease auctions to only 400,000 acres of an Arctic wildlife refuge.

The state of Alaska is suing the federal government over the Department of Interior’s (DOI) alleged “unlawful detour” in restricting oil and gas lease auctions to about 400,000 “impracticable to develop” acres within the 19.6-million acre Arctic National Wildlife Refuge (ANWR).

Alaska Attorney General Treg Taylor filed the lawsuit on Jan. 7 in anticipation of the DOI’s Jan. 8 announcement that the Bureau of Land Management had received “no interest” from oil companies in bidding for leases within the ANWR’s coastal plain.

Alaska maintains that by restricting leases to 400,000 acres, the administration violated the 2017 Tax Cuts and Jobs Act, which required the DOI to conduct two lease auctions within Section 1002—a 1.5-million acre expanse opened for potential oil and gas development by Congress in 1980.

The state argues that the DOI essentially sabotaged bidding by imposing “new severe restrictions on surface use and occupancy” in November that made “any development economically and practically impossible” when implemented in December as the lease auction opened. When the auction closed on Jan. 6, no bids were submitted.

Taylor alleged in a statement announcing the lawsuit, filed in the U.S. District Court in Anchorage, that the agencies “ignored the law and took this unlawful detour without even presenting their final decision to the public for comment.”

The Jan. 8 legal challenge follows Alaska’s July 2, 2024, lawsuit over what it said was “billions in lost revenue” from nine canceled federal oil and gas leases in the ANWR’s coastal plain. That action is pending.

In 2023, the DOI suspended already-issued Section 1002 leases, citing insufficient legal analyses and commissioning another study to reassess the potential environmental impacts of the ANWR oil and gas leasing program.

The expired Jan. 6 bid deadline concluded the second Congressionally mandated sale required by the 2017 Tax Cuts and Jobs Act, which directed the Bureau of Land Management to hold two lease sales within seven years of enactment.

The first sale, held during the Trump administration, “similarly demonstrated low interest, yielding a total of $14.4 million in high bids on 11 tracts,” the DOI said, noting that Congress grossly overvalued the revenues from the two lease sales, projecting they would generate approximately $2 billion over 10 years.

Alaska officials said they are concerned that the “last-minute actions to restrict and complicate” oil and gas development with ANWR’s Section 1002 dissuaded bidding.

Alaska Department of Natural Resources Commissioner John Boyle said the November restrictions have created “total dysfunction.”

Alaska Gov. Mike Dunleavy said “Interior’s continued and irrational opposition under the Biden administration to responsible energy development in the Arctic continues America on a path of energy dependence instead of utilizing the vast resources we have available,”

In December, the Republican governor called on President-elect Donald Trump to scuttle the existing restrictions and create a cabinet-level task force specifically to address Alaska oil and gas development.

Trump has vowed to do away with the ANWR restrictions with a “Day One” executive order. Dunleavy said the lawsuit is still necessary.

“We have already heard comments from the incoming president that his administration will, thankfully, take a different tack and open up those areas that are meant to be developed,” he said. “But unfortunately, we can’t wait for that—we have to challenge this unlawful action now.”