The exits make it far less likely that drilling will take place soon in a vast, unspoiled landscape that has achieved iconic status among environmentalists and has been fought over for half a century. An Anchorage real estate investor and the state-owned Alaska Industrial Development and Export Authority still hold leases there, but industry analysts say they lack the financial power and expertise to develop the remote area on their own.
The Anchorage Daily News first reported the three firms’ decision to pull out of the refuge.
While Republicans enacted legislation in 2017 mandating two major lease sales in the refuge by the end of 2024, a coalition of Indigenous rights and environmental groups has launched a campaign to pressure corporations against investing in any developments there. The 20 million-acre preserve hosts millions of thousands of migrating caribou and waterfowl each year and provides critical habitat for the Southern Beaufort Sea’s remaining polar bears.
“This is positive news for the climate and the human rights of Indigenous people whose survival depends on a healthy, thriving calving ground for the Porcupine Caribou Herd, and further proves that the oil industry recognizes drilling on sacred lands is bad business,” the Wilderness Society’s Alaska state director, Karlin Itchoak, said in a statement.
Five major US banks — Bank of America, Goldman Sachs, Citigroup, JPMorgan Chase and Wells Fargo — and a growing list of insurance companies have stopped giving financing for the Arctic oil business.
“It seems all the oil companies with leases there have concluded that drilling in the Arctic National Wildlife Refuge is unexpectedly after all,” said Erik Grafe, deputy managing attorney in Earthjustice’s Alaska regional office. Grafe, who for years has been involved in litigation to block oil and gas development in the refuge, said, “We are glad that these companies may finally have seen the light, concluding that investing in Arctic oil is a bad deal on a planet that urgently needs to shift away from fossil fuels.”
A year ago the Biden administration suspended the leases that the Interior Department’s Bureau of Land Management awarded two weeks before President Donald Trump left office, saying the agency did an “insufficient analysis” of the impact of drilling in the environmentally sensitive region.
Facing catastrophic climate change, this Alaskan village can’t quit Big Oil
However the state development agency, which bought seven leases covering 366,000 acres just before Trump left office, is still trying to get permits to do seismic studies and preparatory work for drilling in the refuge.
Alan Weitzner, the Alaska Industrial Development and Export Authority’s executive director, said in an interview Thursday that he is not surprised the oil companies decided to leave the refuge in the face of repeated obstacles from the federal government, which “creates a time sink for corporations within that area.”
“In my mind it’s very unfortunate that these major investors in the state of Alaska are not being allowed to continue to pursue development, and are being really pushed to look elsewhere, in large part outside of the US,” he added. “There are delays and just outright denials of requests for permitting to ultimately pursue the activities that you need to do.”
Sen. Dan Sullivan (R-Alaska) said that Biden administration actions were to blame for the departure of the companies.
“The Biden administration continues to tell the American people that they are doing all they can to bring down energy prices,” he said. “Then they take actions that do the exact opposite, especially in Alaska.”
Sullivan added that “this creates enormous uncertainty, driving away and chilling investment in these resource development projects, including ANWR, which our country desperately needs.”
There are many obstacles to drilling in the Arctic refuge. There are no roads or facilities, so building the infrastructure to support oil exploration would be costly. There has long been strong opposition to drilling in the refuge, which has only intensified as climate change worsens, driven by burning of fossil fuels. The Alaskan Arctic has warmed at least three times more than other parts of the country, posing new risks to oil infrastructure on the North Slope as permafrost melts.
“If you look at project proposals in other parts of the Arctic, they’re using things like chillers to freeze the permafrost so they can drill more,” said Jenny Rowland-Shea, deputy director for public lands at the Center for American Progress, a liberal think tank. “It’s not getting any colder in the Arctic. It’s only getting harder to do things like drill, and it’s a vicious cycle.”
Alaska Native groups with ancestral ties to the refuge celebrated the oil companies’ withdrawal from what they consider sacred territory.
“These exits clearly demonstrate that international companies recognize what we have known all along: drilling in the Arctic Refuge is not worth the economic risk and liability that results from development on sacred lands without the consent of Indigenous Peoples,” the Gwich’in Steering Committee said in a statement. “The Gwich’in are united against any development of the Coastal Plain of the Arctic Refuge.”
Some oil industry analysts see the departure from Alaska as a sign of increased fiscal discipline by oil companies as renewable energy becomes a more prominent focus for them.
The investment advisory firm Raymond James did a survey of 50 large oil and gas companies and found that global capital spending remains 5 percent below pre-pandemic levels. It also found that considerations of ESG — environment, sustainability and governance — is driving these companies toward low-carbon energy such as wind and solar, said the firm’s senior energy analyst Pavel Molchanov.
“Insofar as these companies are still drilling, the focus is on the best-established, lowest-risk opportunities: West Texas, North Dakota, Brazil, Norway,” he said. “There is practically no appetite for high-risk exploration in places such as Alaska.”
Regenerate Alaska, which had purchased a 23,000-acre lease during the Trump administration’s sale, requested a refund of its fees and rental payments. Last month BLM complied with this request, according to an Interior spokesman.
In addition to the state agency, a company called Knik Arm Services, a real estate investing firm formed in 2020 by investor Mark Graber holds a lease on the coastal plain.
Many Alaskans remain hopeful that exploration will continue.
“Alaskans haven’t given up on ANWR and the State is still involved,” former lieutenant governor Mead Treadwell said in an email. “ANWR has been a long fight, but if government that leases land doesn’t support exploration and development afterwards, it discourages investors. That’s why the state has taken the fight on as its own.”
Development will also continue in other parts of the state, noted Treadwell, a business investor and Republican who has also served as chair of the United States Arctic Research Commission.
Interior officials are currently reviewing a proposal by ConocoPhillips to build the Willow project, a network of drill sites and a production facility in the National Petroleum Reserve-Alaska, to the west of the Arctic refuge.
Environmental groups said they remained committed to scaling back such development.
“While Chevron and others may have changed their minds where it comes to the Arctic Refuge, others remain bent on expanding oil development in the Arctic,” Grafe said.
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