U.S. petroleum reserve lease sale in Alaska draws just 7 bids

President Donald Trump's efforts to make the U.S."energy dominant" with help from Alaska got off to modest results Wednesday.

The Interior Department made its largest-ever lease offering within the National Petroleum Reserve-Alaska: 900 tracts covering 41,700 squarekilometres, roughly the size of New Hampshire and Massachusetts combined.

But oil companies submitted bids on just seven tracts covering 324 squarekilometres.

The bids totalled $1.16 million, to be split between the U.S. federal government and the state of Alaska. All seven bids were submitted jointly by subsidiaries of ConocoPhillips and Anadarko.

Environmental groups oppose expanded drilling in the reserve, located west of Prudhoe Bay, or any drilling in the Arctic National Wildlife Refuge (ANWR) in Alaska's northeast corner.

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Trump in June, announcing a new American energy policy, said he was focusing not just on energy independence but also "energy dominance."

The petroleum reserve bids Wednesday pulled in $14.99 per acre, an amount that shows "fuzzy math" by the Trump administration and congressional Republicans who hope to collect $1 billion from Arctic refuge lease sales to help pay for Trump's proposed tax cut, said Kristen Miller, conservation director of the Alaska Wilderness League.

"At that price, leasing the entirety of the Arctic Refuge coastal plain's 1.5 million acres would raise slightly more than $11
million in revenue for the federal government, a far cry from the billion dollar lie that Trump and Republicans are feeding the American public," she said in a statement.

A variety of factors

Kara Moriarty, director of the Alaska Oil and Gas Association, said there likely were a variety of factors for just seven bids. A state lease sale drew 143 bids Wednesday. Alaska's tax policies, changed seven times in 12 years, may have discouraged bidding.

But drawing conclusions about bidding in the Arctic refuge based on Wednesday's results is not a fair comparison, Moriarty said.

Potential on the refuge's coastal plain is thought to be tenfold to what's in the NPR-A, she said.

"It's two different basins. It's two different potential areas," Moriarty said. "They may both be in Alaska, but the reserve estimates are night and day."

The petroleum reserve was created in 1923 by President Warren Harding as the Naval Petroleum Reserve and set aside as an emergency oil supply for the Navy. It covers 92,269 square kilometres, about the size of Indiana.

Congress in 1976 renamed the reserve and transferred administration to the Interior Department.

Habitat for birds, bears, and caribou

The reserve contains important habitat for migratory waterfowl, polar bears and two caribou herds.

Former Interior Secretary Ken Salazar in 2013 announced a management plan that split the reserve's acreage roughly in half between conservation areas and land available for petroleum development. He said oil companies would have access to nearly three-fourths of the estimated economically recoverable oil in the reserve.

The 2013 plan increased special conservation areas in the reserve from 33,587 squarekilometresto 54,027 squarekilometres.

Interior Secretary Ryan Zinke in May signed an order to review the Obama administration management plan.

There are 189 authorized leases in the NPR-A. The latest lease sale offered all other NPR-A land designated by Salazar as available for drilling.

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