ANWR leases have been suspended by the Biden administration, but new production will move forward in the NPR-A.
The long list of executive orders signed by President Biden represent a significant shift in policy from his predecessor—and a recognition it has little time to waste.
Alaska’s oil industry faces an uncertain future with poor economics, a shrinking pool of capital, and the prospect of tightening environmental policy.
Proponents of drilling in ANWR say that the potential of Area 1002 is enormous, and oil from the region will be an important supply source to improve the country’s energy security.
Opening Area 1002—a small part of the Alaskan National Wildlife Refuge—to oil exploration and development can reduce U.S. foreign import dependence.
The recent oil discovery on Alaska’s northern coast could reverse the state’s declining output and restore government coffers after revenue declined sharply from the collapse in oil prices.
The Governor of Alaska has proposed changes to how the state collects revenue, a recognition that the state’s best oil days are likely in the past.
States that are major oil and gas producers are seeing significant holes in their budgets in part due to low prices. One major player on this list is Louisiana, which has a long energy-rich history and is going through a severe fiscal crisis at the moment.
Despite oil prices falling to levels not seen in more than a decade and Arctic drilling efforts halted by major companies such as Royal Dutch Shell, Houston-based Hilcorp’s latest proposal to build a gravel island for oil extraction off the shores of Alaska is still moving forward.
Despite its potential, the Arctic will not likely see large-scale development in the near-to-medium term, if ever. The region’s remote location, lack of infrastructure, harsh conditions, and most importantly, the high-cost of drilling will continue to undermine Arctic oil drilling.