With environmental groups threatening companies that may have sought to bid on leases in the Arctic National Wildlife Refuge, Alaska’s own economic development corporation has decided to make sure those leases get buyers.
The board of the Alaska Industrial Development and Export Authority on Wednesday unanimously voted to allow the agency to bid up to $20 million on leases in the 1002 Area of the Coastal Plain of ANWR. The agency could then partner with a company to do the actual development work.
The federal lease takes place on Jan. 6, and some have worried that threats by environmentalists and fearful banks, that are responding to intense environmental pressure, will suppress interest in the opportunity to develop oil in the extremely resource-rich area.
Environmental groups and some private companies are threatening economic sanctions against companies that dare to work in the Arctic. Recently, The North Face refused to sell jackets to an oil services company, following in the footsteps of Patagonia; both companies make jackets, tents, and backpacks out of oil.
This fall, the Wilderness Society penned a letter to the CEOs of Chevron, ConocoPhillips, ExxonMobil, and Hilcorp, warning them off of bidding on the leases. The letter, signed by 250 environmental organizations and some businesses, demanded the companies refuse to bid and also make a “public statement in opposition to the development of oil and gas in the Arctic Refuge. The reputational, environmental, climate and economic risks of drilling in the refuge are not worth the potential harm such calamity can do to your brand.”
The threatening letter continued:
“Investors are also taking notice. As evidenced by the recent announcements from five of the six largest US domestic banks, the pursuit of oil and gas development in the Arctic Refuge comes with tremendous financial risk as well. Soon we will also be briefing asset managers, insurance and reinsurance companies on the risks of doing business in the Arctic Refuge. As the global community works to pivot away from fossil fuels in the face of climate change, the pursuit of oil and gas in remote corners of the globe will continue to face strong social and political opposition.
“Pursuing oil and gas in the Arctic Refuge is increasingly fraught with financial risk. At a time when demand for oil and gas is likely in permanent decline, drilling in the Arctic Refuge doesn’t make fiscal sense. Arctic lease sales are likely to be challenged legally, resulting in additional costs for your beleaguered industry. The risks of investing in new oil exploration are high – no investment in drilling in the Arctic Refuge should be considered safe.”
Wednesday night’s meeting of the AIDEA board was dominated by members of environmental groups testifying in opposition to the proposal, with caribou, polar bears, and other wildlife being their chief concern. Polar bears are now relatively abundant in the Arctic, with their main threat being Native and their Inuit-guided trophy hunting clients, which are responsible for about 900 polar bear deaths each year. There are believed to be more than 31,000 polar bears in the Arctic, a dramatic increase from the 12,000 polar bear count in the 1960s. Likewise, caribou are abundant, particularly in the North American Arctic.
The AIDEA board discussed the leasing proposal in executive session for over two hours and then voted unanimously to proceed.
It’s the latest salvo in the war over Alaska’s future economic viability as a state, and a 352,00-acre portion of the refuge’s 1.6 million acre coastal plain, which is mainly gravel and water.
Earlier this month, environmental groups and their surrogates asked a federal judge in Anchorage to prevent the U.S. Department of Interior from allowing the leases to proceed before President Donald Trump leaves office. Inauguration Day is on Jan. 20, 12 days after the lease sale is scheduled.
In all, four lawsuits have been filed since August over the lease sales, with three of them asking for preliminary injunctions.
I find it amusing that the environmental groups are teamed up with Wall Street in opposition to Arctic drilling. Ostensibly oil production is ruining the Arctic and offing the poor Polar Bears. However Polar Bear populations as Suzanne has noted are increasing despite there being a trend for less ice. Why? Well it turns out, less Ice means more fish which means more food for seals which translates into greater seal numbers. . Polar Bears feast on seals, more seals equals more bears. How has Arctic Oil production harmed Polar Bears?
What is a danger however is the heavy metal pollution spewed out by Wall Street’s BBF and manufacturer of all cool outdoor clothing worn by environmental types, China. Increased levels of toxins reach Western Alaska from China’s unregulated industries daily. This pollution can and will affect the ” fragile” Arctic, and yet the greenies and Wall Street are silent. Makes me wonder.
A $20MM investment in ANWR by the State of Alaska pays what dividend? … NO!!!
Continue to let the Permanent Fund invest the money in the stock market as they have a proven record of positive results.
AIDEA has their own funds to bid on leases, it does not come from the Permanent Fund.
Maybe I’m missing something here, but how does a government entity bidding against the private sector on a government lease provide any incentive for the private sector? This is a massive slippery slope that leads to the state taking over production of the oil fields, let’s ask Venezuela how that’s working out for them.
My thoughts exactly.
Well, that’s the end of ANWR. Everything jinx AIDEA gets involved with ends up being a bust. Please abolish AIDEA and stop AIDEA from hemorrhaging more billions of Alaska’s taxpayers’ dollars…….
AIDEA has done a world of good on smaller projects.
Please enlighten us and be specific……….
Rich, how many tens of millions, or hundreds of millions, of dollars has AIDEA frittered away over the years in failed or never-realized projects? And why does anyone think that this statist and quasi-communistic governmental entity should be trying to pick and chose winners and be meddling in the economy in the first place? Isn’t that kind of state central planning exactly the kind of thing that free marketeers rightly derided and condemned the USSR for doing?
Still waiting to hear about all the wonderful things that AIDEA has accomplished………
AIDEA’s overall investment portfolio has returned many millions to the state, far more than the high profile investments that did not do well. The road to Red Dog is just one example.
Is the only defense really that AIDEA can turn billions into millions?
Former Alaska Governor and US Senator Frank Murkowski originated the idea of putting in cover bids on the ANWR lease sale. It’s a good one. Now the state administration and the legislature need to make sure that state agencies and municipalities do no business with the banks that have excluded and isolated Alaska and our natural resource industries, that Alaska retailers doing business with the state and its subdivisions exclude manufacturers, wholesalers and labelers like Patagonia, North Face and Sitka Gear, and that all Alaskans understand that Alaska has done nothing to deserve being blackballed by some Wall Street and Main Street players. The Alaska economic situation is sufficiently dire that we cannot stand for, let alone subsidize the Green New Deal peanut gallery. People like Bloomberg, Soros and some just appointed to the incoming Biden cabinet don’t like the way Alaskans work, recreate, spend our money, and vote. The seeds of this were sown when Obama came to Anchorage to have dinner at the Rogoff house.
I get so tired of these threats from these so called “environmentally woke” corporations. Meanwhile, they continue to produce products with petroleum based fabrics. These companies’ products are typically manufactured by slave labor in China and other countries throughout SE Asia. On the bright side, it often backfires as in the case with AOC and Goya Foods. She bashed them and sales went through the roof making her an employee of the month without even working there.
Sellers of apparel with oil-based fabrics, are taking a hardline approach in promoting a romanticized agenda of alternative energy sources. The glaring oversight is the alternatives are not even remotely as feasible or effective as fossil fuels. The only hope, nuclear, is similarly dismissed. The laws of thermodynamics are not negotiable.
Here is what I don’t understand about North Slope energy:
1. Instead of trying to export natural gas through an uneconomical pipeline – why not generate electricity on the Slope and transmit it at least to the interior or by use of HVDC transmit it longer distances.for mineral processing and village use.
2.How about shipping seasonally tankerloads of LNG to seacoast hubs likeNome and Bethel. Or even to Southcentral someday when needed.
3. How about using the gas to produce pure Hydrogen and sequester the carbon? Kickstarting a carbonless energy emission new paradigm?
I proposed the power idea years ago and nobody thought it was a good idea. There is a very large power plant already in operation now.
How much energy do you think is needed in remote villages or even in Central AK? A small power plant on the slope would provide all the power for the places you mention and it would use only a very small fraction of the gas found there. It would cost hundreds of millions to run power lines to all those remote villages and even just to Fairbanks from the Slope. HVDC is best for massive amounts of power shipped extremely long distances, think on the order of thousands of Megawatts for thousands of miles, not tens of Megawatts for a few hundred miles.
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At this point the gas makes more money being reinjected to produce oil, maybe at some point in the distant future it will make sense to ship it by tanker but that won’t be for a long, long time…the world is awash in cheap natural gas. In fact gas is so cheap, Alaska will soon be importing it, check the news on the Kenai LNG Terminal operated by Marathon.
Still a very doable project. One problem is that we would pay a top dollar for power.
Doable, no doubt. Expensive and cost prohibitive, no doubt. We can do all kinds of things but reality and cost keep us from doing them just for the sake of them being doable.
I think my main point is we should give up on export models and concentrate on using the gift of natural gas for our own purposes. For example producing plastics and resins for things. Or being a leader in carbon/hydrogen products.
The economics tell us we should abandon export. We will soon be importing natural gas to Alaska because the economics pencil out. Gas is gas, when it’s cheaper to get it in a tanker than build a pipeline across formidable arctic and subarctic terrain, that’s what you do, or more appropriately what Marathon Oil is going to do.
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We missed out on the natural gas bonanza, it’s going to be generations before there is a need for North Slope gas.
Timing. It’s all in timing. If we set a solid schedule for HVDC in our mineral areas, and the extraction industry schedules their permitting to dovetail with it, then we could sell all the electricity we could generate to them, with lots left over to tempt industry that needs lots of cheap electricity.
One line through Fairbanks, Anchorage, Seward … with a branch through Delta Junction to Valdez. Another line about a hundred miles inland, paralleling the West coast, to Dillingham.
All those other and extra lines you are talking about just doubled the price of something that already costs far too much to be economically feasible. Having multiple mines to provide power to does open the possibility, but then we are in the chicken and egg situation…and even if some of us want to, we aren’t actually in the business of permitting the large scale mines that would be needed to support such a project, see Pebble.
There’s enough commercially viable energy & mineral deposits along our West coast, down through the Aleutians … N. & E. of the Yukon, down through Northway … & along the rail-belt to suck up all the electricity we could generate.
There’s already mines along each route which are using diesel generators. I operated 6 at the Sheep Creek camp North of Valdez. Fuel cost thousands of dollars every day.
Fuel cost alone is why many mines aren’t seeking permitting yet, or operating on a much reduced scale.
They’re all “treading water” until the power situation or value of minerals change drastically.
Don’t take my word for it, Go ask them.
The mines are being “hi-graded” in that only the richest part of each deposit are commercially viable and being extracted. This means that the greatest bulk, up to 90% of the deposits, the middle to lower grades aren’t being extracted. Too expensive right now.
We see the same thing when oil companies come in and extract just the sweet crude, leaving the lower grades in the ground, which will never get extracted anytime later..
Josephdj,
Who exactly is going to pay for the lines, transformers, power plants, fuel, and all maintenance required? The mines themselves or the state?
Same as with the TAPS, which has paid for itself many times over.
Incidentally, the Ambler access road was offered to be built by the mining companies, at an estimated million dollars or so. The state stepped in and turned that road into a hundred million dollars or so.
Many highly qualified scholars, scientists, and economists have proposed HVDC from the slope over the years. Problem is that the transmission towers take up so little space that Alaska’s “Old Money/Legislators complex can’t make a killing buying up the right of ways and reselling them to Johnny-Come-Lately speculators.
Examples are all the “Bridges To Nowhere” schemes they’ve pulled on us over the decades:
Old Money buys up the right of ways … legislators announce some massive project … speculators buy the right of ways from Old Money … legislators announce the project is tabled until whenever., or even outright refuse to honor the voters mandate (Capitol move).
Rinse and repeat!
We need AIDEA to partner with other developments such as Pebble to enhance the partnership and develop all our resources for the maximum benefit of the people of Alaska, the same people who will take care of the land and the fish, but will provide for a responsible and equitable opportunity to make Alaska Great and keep Alaska Great and put the tree hugging Californians on the run out of our beautiful state. We must develop our rare earth minerals regardless of what the left has to say and their opportunistic special interests only their to promote their socialistic ideas of failure picking winners and losers is not the game we need. Parner, Develop and maximize our resources.
I think this is a cool idea. It will demonstrate that someone, in this case the citizens of the State of Alaska, want to explore for, develop and ultimately reap the benefits of petroleum production from the 1002 area. The fashionable from elsewhere can invest in Communist China and California.
It is late in the game but about time. Norway successfully participated in the development of its oil. Of course, there are major differences between Alaska and Norway. First, (with the exception of John Fredriksen) Norwegians stay in Norway – more importantly so does their wealth. Historically, Alaska is where people come to make money, then they retire elsewhere. Second, Norwegians are well educated whereas Alaskans are not. Third, we think the purpose of our SWF is to pay a dividend – Norway uses its SWF for public purposes. Basically its the old Grasshopper and the Ant story – The world owes us a living. Republicans for UBI!
There are only two ways ANYTHING is developed from the Earth, you either grow it, or you mine it! Also, NOTHING or very little ever leaves the Earth, it may change location or state, but it ALL stays here!
Hypocritical greenies must take a hike to China – the Chinese need more slave labor – they’ll put them to work doing something useful for their failure to stamp out Alaska and American energy production. Good idea AIDEA.
How does ADIEA know which leases have value/oil? Likely they don’t.
Neither does anyone else. Until a well is drilled, they’re all guessing. Hopefully ADIEA consults with someone with a good track record, like maybe Donkel Oil.
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