Court orders reinstatement of Alaska agency’s wildlife refuge oil and gas lease

(CN) — Alaska’s public economic development agency’s oil and gas leases for nearly 400,000 acres of land within the Arctic National Wildlife Refuge will be reinstated, a federal judge determined Tuesday afternoon.

The Department of Interior needed a court order to cancel Alaska Industrial Development and Export Authority leases, U.S. District Judge Sharon Gleason concluded in the 22-page order.

“There is no reason [Department of Interior] could not file an action seeking declaratory relief in such circumstances,” the Barack Obama appointee wrote. “Accordingly, federal defendants’ cancellation of [Alaska Industrial Development and Export Authority‘s] leases was not in accordance with law because it failed to seek a court order.”

The order directs the federal defendants — which include the Department of Interior, the Bureau of Land Management and the agencies’ respective directors — to reinstate the Alaska Industrial Development and Export Authority’s oil and gas leases in the northern Alaska refuge, bringing an end to four years of litigation spurred by an arctic drilling provision in a law oft-touted by Trump during his first term.

The crux of Gleason’s decision hinges on the Naval Petroleum Reserves Production Act of 1976, which sets out regulations regarding lease sales.

Congress removed the Secretary of the Interior’s inherent authority to cancel leases the agency determines to be invalid at inception when it directed the department to apply the Naval Petroleum Reserves Production Act’s regulation requiring a court order to cancel a lease.

“And where, as here, Congress adopts a new law incorporating sections of a prior law and its implementing regulations, Congress is presumed to have knowledge of the prior law and regulations,” Gleason wrote.

The federal defendants and multiple conservation groups and tribes that intervened as defendants asked the court for the opportunity to submit their proposed remedies, but Gleason didn’t find that to be necessary and settled on vacatur as the appropriate remedy.

“DOI’s error is serious: DOI cancelled AIDEA’s leases without following the congressionally-mandated procedure for doing so,” Gleason wrote.

The judge added that vacating the cancelation won’t be disruptive since the Bureau of Land Management didn’t receive any bids when it offered lease sales in January, causing the agency to decline to hold the sale at all.

“Therefore, the potentially disruptive consequences of reinstating AIDEA’s leases have not materialized,” Gleason wrote.

Congress directed the Secretary of the Interior to establish and administer a competitive oil and gas leasing program on the coastal plain of Alaska, a remote area off the Beaufort Sea, in 2017.

The program, developed as part of the Tax Cuts and Jobs Act, directed the secretary to conduct at least two lease sales within 10 years, specifying one take place before the end of 2021 and another before the end of 2024. The areas put up for lease were required to be over 400,000 acres and places that have the “highest potential for discovery for hydrocarbons,” an organic compound found in natural gas and crude oil.

The federal government estimates that the refuge’s coastal plain contains valuable deposits, but there haven’t been any proven groups of oil fields due to the lack of oil and gas exploration in the area.

In early 2021, the Alaska Industrial Development and Export Authority secured leases for seven tracts of land comprising 365,775 acres. One week later, President Joe Biden issued an executive order directing the Department of the Interior to pause (and months later suspend) the federal government’s oil and gas leasing program on the coastal plain.

The Alaska Industrial Development and Export Authority sued over the temporary suspension to its leases that year, and a federal court in the state dismissed its claims in 2023. Then, the Interior Department canceled the leases, prompting the economic development agency to sue again.

The Arctic National Wildlife Refuge is home to polar bears, snowy owls, caribou and other wildlife. It is considered sacred land by the indigenous Gwich’in Nation, a tribe on the southern boundary of the refuge.