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Alaska oil leases attract little interest; state-owned company as main bidder

Alaska oil lease sale

This Wednesday the long-awaited Alaska oil lease sale took place with very little interest from the industry. Alaska’s Industrial Development and Export Authority was the main bidder, as no major company submitted offers for the sale.

Kate MacGregor, U.S. Department of the Interior’s deputy secretary opened the envelopes today in a live stream, in which she revealed the bidders and winners of the auction. “Today is truly historic”, she said, noting that efforts to open the area for development have been ongoing for decades.

She highlighted that the sale generated more than $14,4 million dollars, although it’s just a fraction of what Trump’s administration was expecting to get. The sale opened 11 tracts to development; around 600,000 acres, and in ten out of twelve, the Alaska Industrial Development and Export Authority was the only bidder.

Only two of the bids were competitive, according to the Washington Post, and only two more energy firms participated in the sale; Regenerate Alaska Inc. being one of them, and Knik Arm Services LLC, the other. These companies presented a bid amount of $771,373.00 and $1,622,260.00, respectively.

The Trump administration is expected to rush the awards of the contracts, as Donald Trump’s term ends in January 20. President-elect Joe Biden has opposed to the drilling in the area and has talked about revoking the sales. Nevertheless, if they are awarded before he takes office it might be difficult to achieve.

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Alaska attracted little interest from the industry

“With the change of administrations and the outcome of the Senate races, we’ve got a real opportunity to rein this in, and I’m going to be doing everything I can to make that happen,” Democratic Congressman Jared Huffman said.

As we reported previously, just one day before the leases happened, they were still facing heat as indigenous and opposing groups tried to convince a federal judge to stop the process of sale. Nevertheless, federal judge Sharon Gleason denied the request.

Main arguments for opposers are that the coastal plain is the home of caribous, polar bears and many other wildlife currently under threat of extinction due to climate change. According to sources, about a third of maternal polar bears have their dens in the area the administration opened.

The Bureau of Land Management faced so much heat about the leases, they had to shrink the size of the bidding area, due to nearly 40,000 letters with opposing comments about the seismic tests the BLM has to conduct to confirm the presence of about 7,7 billion barrels of recoverable oil in the area.

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