© Bill Weir/CNN
Tens of thousands of caribou cross these lands each year in the Arctic National Wildlife Refuge.
An auction to lease the drilling rights along Alaska's pristine Arctic National Wildlife Refuge (ANWR) attracted only three bidders, one of which was the state of Alaska. © US Fish & Wildlife Service
Caribou graze on the coastal plain of the Arctic National Wildlife Refuge, with the Brooks Range in the background.
Half of the available leases attracted no bids at all, leaving a small percentage of the revenue drilling advocates had projected they could generate.
Big oil companies such as Exxon, Shell and BP didn't bid on the tracts of land because of the "reputational, legal and political" risks, according to Ed Crooks, vice chair of the energy consulting firm, Wood Mackenzie.
What was supposed to be part of the Trump administration's final push of environmental rollbacks seemingly provided very little interest from these important bidders.
A rushed attempt
Drilling rights along the 1.6 million-acre coastal plain of the ANWR have been highly sought after for decades because of their "high prospective for oil and gas resources," according to the Bureau of Land Management.
The effort gained momentum when a mandate from the Tax Cut and Jobs Act was signed into law in 2017, indicating a deadline for the first sale of the leases before the end of 2021. With President-elect Joe Biden's commitment to protect the Arctic National Wildlife Refuge, the Trump administration appeared to rush the lease sale for arctic refuge drilling before the end of his term. © BLM
The Bureau of Land Management designated 22 tracts of land for drilling along Alaska's ANWR
Part of the hesitation from the oil industry likely comes from the anticipation of regulations from the incoming Biden administration, which has included protecting the Arctic National Wildlife Refuge in its climate plan. A similar scenario played out with the auto industry. Manufacturers did not lower fuel-economy standards -- despite the Trump administration easing regulations -- in anticipation of tougher rules down the road.
The lack of interest for drilling rights along a coastline estimated to hold up to 11.8 billion gallons of oil, paints a picture of how the United States -- and the world -- is expected to predominantly source its energy.
Major oil companies are making investments in low-carbon businesses, such as solar, wind and hydrogen power. As costs continue to fall and climate change concerns rise, investments in renewable energy are expected to be even more attractive to the oil industry as they transition to a green energy future.
The lukewarm response to ANWR drilling rights is another example of market forces overshadowing the recent rollbacks of environmental policy. Take coal, for example. Despite the Trump administration efforts to prop up the industry by rolling back climate regulations, the nation consumed more energy in 2019 from renewable sources while coal use fell sharply.
Drilling for oil can be risky business
Originally touted as a way to create jobs and offset tax cuts, the drilling of the ANWR poses a high degree of risk for financial backing as banks refuse to finance Arctic drilling projects. "Every major American bank has stated unequivocally that they will not finance this destructive activity," Ben Cushing, a senior campaign representative for the Sierra Club, said in a statement.
The Arctic Refuge's coastal plain is a sensitive ecosystem comprised of indigenous people, migratory birds and the calving ground for the Porcupine Caribou herd, to name a few. Disruption of this sensitive habitat could have direct impacts on the immediate environmental surroundings but also the larger planetary climate. The Arctic is already a literal hotbed for climate change, warming twice as fast as the global average, according to the most recent Arctic report card released by NOAA.
The energy market is moving away from fossil fuels
The "almost non-existent bidding for oil and gas leases in the Arctic National Wildlife Refuge were not surprising. It confirms what we already know to be true: the era of drilling for oil at any cost is over," says Danielle Fugere, president of As You Sow, an environmental non-profit.
Politicians and supporters of this project disagree, arguing that drilling in the ANWR would support America's energy independence and provide revenue to local and state communities.
Even after the three highest bids were established at a fraction of their anticipated price, Alaska Gov. Mike Dunleavy tweeted that it was "historic for Alaska and tremendous for America."
CNN reached out to Dunleavy's office for a comment on the seemingly low bids received for ANWR drilling, but they have not responded.
Even though the bid results weren't as robust as projected, Kara Moriarty, president of Alaska Oil and Gas Association, is confident that the market still supports future access to oil drilling across the coastal plain of northeast Alaska.
"Today's sale reflects the brutal economic realities the oil and gas industry continues to face after the unprecedented events of 2020, coupled with ongoing regulatory uncertainty," she said in a statement.