On November 29, the House Natural Resources Committee’s Subcommittee on Energy and Mineral Resources held a legislative hearing to examine H.R. 6285, “Alaska’s Right to Produce Act of 2023.” The bill, proposed by Subcommittee chairman Rep. Stauber (R-MN) and co-sponsored by Rep. Peltola (D-AK), would reinstate recently cancelled federal oil and gas leases in the Arctic National Wildlife Refuge and stop a proposed rule that would restrict oil and gas development in the National Petroleum Reserve in Alaska (NPR-A).

Hearing witnesses included Steve Feldgus, Deputy Assistant Secretary for Land and Minerals Management at the Department of the Interior; Doreen Leavitt, Secretary of the Inupiat Community of the Arctic Slope; Karlin Itchoak, Alaska State Director of The Wilderness Society; John Boyle, Commissioner of the Alaska Department of Natural Resources; and Charles Lampe, President of the Kaktovik Inupiat Corporation.

The Arctic National Wildlife Refuge federal leasing program was authorized in 2017 and the first auction was held in January 2021, offering 1,089,053 acres for oil and gas development. Although nine leases were originally sold, the two private companies that acquired leases – Regenerate Alaska and Knik Arm Services – rescinded their leases in 2022. On September 6, 2023, the Department of the Interior (DOI) rescinded the remaining seven federal oil and gas leases in the Arctic Refuge, all held by Alaska Industrial Development and Export Authority, a public corporation formed by the State of Alaska. DOI cited legal deficiencies in the underlying analysis underpinning the January 2021 lease sale.

Less than one week later, on September 8, 2023, DOI proposed a rule to revise the framework for managing Special Areas in the NPR-A, leaving approximately 11.8 million acres open to new leasing and 10.6 million acres closed to new leasing. The rule would also impose restrictions on the construction of infrastructure and change how Special Areas are established, among other changes.

Deputy Assistant Secretary Feldgus testified that DOI strongly opposes the proposed bill, arguing that it would undermine the National Environmental Policy Act by prohibiting the Department of the Interior from addressing deficiencies in the previous review. Feldgus also testified in opposition to the bill’s provisions on the NPR-A, stating that the rule would prevent DOI from needed updates to the nearly 45-year-old NPR-A Special Areas regulatory framework. Karlin Itchoak of The Wilderness Society also testified in opposition to the proposed legislation, citing the proposal’s disregard of indigenous stewardship and bedrock environmental laws.

Commissioner Boyle testified that the State of Alaska, on behalf of Governor Mike Dunleavy, supports the legislation and described recent decisions on oil and gas development in Alaska as examples of the current Administration limiting natural resource development in the state. Secretary Leavitt of the Inupiat Community and President Lampe of the Kaktovik Inupiat Corporation also testified in favor of the legislation, highlighting the lack of tribal consultation in advance of recent decisions in the region – the cancellation of leases in the Arctic Refuge and the NPR-A proposed rule. While many committee members echoed the witnesses in their critique of the Administration for insufficient outreach and tribal involvement, some members raised that other indigenous groups were also not consulted in the establishment of leasing programs in the Arctic Refuge and NPR-A and have long opposed oil and gas drilling in the region.

Members also spoke about oil and gas development in the Arctic Refuge and NPR-A and its necessity for achieving American energy independence. Approximately 2.5 million acres of the NPR-A are currently leased for oil and gas development, and, before the recent lease cancellations, 366,000 acres were leased in the Arctic Refuge. But opening up ANWR and NPR-A for oil and gas development will not necessarily boost domestic energy production, as many oil and gas companies (Exxon Mobil), insurers (American International Group, Chubb, Fidelis, etc.), and banks (Wells Fargo, Goldman Sachs, Morgan Stanley, Citibank, and Chase, etc.) have pledged to stay out of the Arctic Refuge.

Discussion also touched on the rising negative effects and costs of climate change, which is exacerbated by oil and gas development, in the Arctic. Earlier this year, Taxpayers for Common Sense released a comprehensive report on the taxpayer costs of climate change. Our report highlights costs specific to the Arctic region, including the expense of adapting infrastructure to the changing environment, the costs of safeguarding the increasingly fragile ecosystem, and the amplified demands for search and rescue operations in the newly navigable Arctic waters.

The hearing also included discussion of the financial costs of continuing federal leasing in the Arctic, specifically in the Arctic National Wildlife Refuge. The first lease sale generated only $16.4 million in total revenue, with the $8.2 million share of federal receipts amounting to less than 1% of the $1 billion taxpayers were promised. Private industry interest was low to begin with and after the only two private companies holding leases canceled their leases, federal revenue was further reduced to $6.7 million.

Offering oil and gas leases in an area that industries themselves are reluctant to enter makes little fiscal sense for taxpayers. Further, any future climate and environmental liabilities stemming from drilling in this remote and sensitive area will likely fall on taxpayers if drilling does occur.

Learn more about federal oil and gas leasing in the Arctic Refuge here: https://www.taxpayer.net/deep-dives/the-arctic-national-wildlife-refuge/