Biden declares Arctic off limits to new oil and gas leases

Move comes as administration prepares to approve Willow oil drilling project.

The limits apply to future leases and wouldn’t stop ConocoPhillips’s Willow project from moving forward

US President Joe Biden moved to block future oil and gas leasing in the Arctic Ocean’s federal waters, part of a sweeping plan to protect 6.5 million hectares of land and water in Alaska.

The announcement on Monday (AEDT) comes as the administration is preparing to approve the huge Willow oil drilling project in the Alaskan Arctic over the objections of environmentalists and many Democrats who want the project scuttled, according to people familiar with the matter.

The limits apply to future leases and wouldn’t stop Conoco­­Phillips’s Willow project from moving ahead. The company has held key oil and gas leases in the region for years.

The Interior Department said Mr Biden had decided to make about 1.1 million hectares in the Arctic’s Beaufort Sea off limits to future oil and gas leasing indefinitely. The move completes a years-long effort by Democrats to restrict fossil fuel development in the US Arctic Ocean, building on previous moves by president Barack Obama to block leasing in the Chukchi Sea and part of the Beaufort Sea.

As part of the conservation plan, the administration also will move to issue new federal rules limiting oil and gas leasing on 5.2 million hectares of Alaska’s National Petroleum Reserve, and extend protections to key rivers and lakes in the state.

Administration officials argued the efforts would form a “firewall” against future oil and gas leasing in the Arctic and federal lands in Alaska’s North Slope. The expected approval of the Willow project will nonetheless anger environmental activists, who for years have fought against a project they have described as a ticking carbon bomb.

The project has won the support of the oil and gas industry, Alaska’s congressional delegation and many Alaskan natives. The White House has declined to comment on Willow’s expected approval.

Companies have been active in offshore Arctic fields since the late 1960s, but in the past decade operators such as Shell have abandoned their Arctic plans after drilling wells that yielded ­little oil and gas.

Pressure by environmental groups to preserve federal waters, difficulty obtaining permits, and icebound seas and unpredictable weather, which make exploration expensive and dangerous, have led many large oil companies to ditch development plans in the region.

In 2015, Shell put an end to a $US7bn Arctic campaign due to disappointing production results against the backdrop of falling oil prices. BP left Alaska in 2020 after being active in the region for 60 years, selling its holdings for $US5.6bn to Hilcorp Energy.

Lease sales in federal waters off the coast of Alaska have attracted little interest in recent years. A December federal lease sale off Alaska’s south central coast had only one bidder, Hilcorp, make an offer on one block in Lower Cook Inlet.

New restrictions on drilling in Alaska’s National Petroleum Reserve could potentially undermine incentives for further oil and gas development there if they go far enough, analysts at research firm ClearView Energy Partners wrote in a note on Sunday.

The Wall Street Journal