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Biden Administration To Reduce Oil-Drilling Lease Area In Alaska

The Biden administration is seeking to reduce the area of land in Alaska that is available for oil drilling in what would be a reversal of Trump-era legislation that opened up 82 percent of the National Petroleum Reserve for drilling, The Hill writes.

Reuters notes that despite expanding the lease-eligible area in the National Petroleum Reserve, the Trump administration failed to help reverse a decline in Alaska oil production, which fell to the lowest in 43 years in 2020 as oil companies focus on the Lower 48.

Under the revisions made by the Bureau of Land Management, some 52 percent of the National Petroleum Reserve will remain open for oil drilling, but the Bureau also said it will keep some stipulations from the Trump-era legislation, namely, "certain more protective lease stipulations and operating procedures for threatened and endangered species."

"This decision reflects the Biden-Harris administration's priority of reviewing existing oil and gas programs to ensure balance on America's public lands and waters to benefit current and future generations," the Bureau of Land Management said in a statement.

The Trump administration sought to open up more land for oil drilling in Alaska in a bid to deepen the United States' self-sufficiency in energy. The administration even wanted to open up the Arctic National Wildlife Refuge for oil drilling—a move that caused an outcry among environmental organizations.

Alaska is one of the oldest oil-producing regions in the United States. But lately, production has been on a steady decline, which has prompted authorities to look for ways to reverse the decline, which has affected the state's income.

On the other hand, oil companies have prioritized the Permian and other shale plays thanks to often lower-cost and faster-return production there. To add to this, banks have become increasingly reluctant to lend to the oil industry as they prioritize the ESG demands of their shareholders, making investments in costly projects such as Arctic drilling much harder to obtain.

By Charles Kennedy for Oilprice.com

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