According to a Wall Street Journal report, the Trump administration is planning to approve an oil leasing program for the Arctic National Wildlife Refuge (ANWR). It would allow oil companies to lease land and explore for oil on parts of the 19-million-acre refuge. Lease auctions could occur as soon as the end of this year.
Oil companies and Alaskan leaders have been working on opening up ANWR for oil exploration for more than 30 years. While environmentalists have long raised concerns about how drilling would impact the wildlife that lives on the refuge, Congress mandated an oil leasing program as part of the tax overhaul in 2017. It gave the Department of the Interior until December of 2021 to sell oil leases. By authorizing the program this year, it would be hard for an incoming administration to unravel.
The Interior Department estimates that oil companies would use about 0.01% of ANWR's surface area for roads, drilling pads, and processing plants to support production.
Oil companies first discovered oil in Alaska in 1957. In the years since, the industry has uncovered several major oil fields, which in time turned the state into an oil powerhouse. While production from the region has declined from more than 2 million barrels per day (BPD) at its peak in 1988 (output was recently around 404,000 BPD), the industry continues to discover new sources. In recent years, ConocoPhillips (NYSE:COP) has uncovered as much as 1.1 billion barrels of oil resources in the state's National Petroleum Reserve.
ANWR represents another untapped oil resource for the industry. According to an assessment by the U.S. Geological Survey, the 1.5 million acres of the 1002 Area of ANWR alone hold 7.8 billion barrels of technically recoverable oil.