Alaska Seeks Billions in Lost Revenues from Canceled Federal Oil and Gas Leases

July 2, 2024

(Anchorage, AK) - Today the State of Alaska filed suit in the United States Court of Federal Claims seeking to recover lost revenues from nine canceled federal oil and gas leases covering lands on the Arctic National Wildlife Refuge's Coastal Plain. This suit continues the State's efforts to hold the federal government accountable for the costs of its environmental policies, especially when those decisions lead to severe economic impacts to the State and its citizens.

"Oil and gas production from those leases could greatly contribute to our nation's energy independence and the economy of our state," said Alaska Governor Mike Dunleavy. "This about-face by the federal government opposes the direction given by Congress and deprives Alaska of our natural resource rights."

As a condition of joining the Union, Alaska was promised the ability to build its economy through resource development.

"The Biden administration's decisions since day one have been aimed at making the State of Alaska off limits to any resource development to the detriment of Alaska and Alaskans seeking to provide for their families," said Alaska Attorney General Treg Taylor. "As the rest of the nation celebrates the Fourth of July, the federal government has systematically undermined the State's ability to maintain its economic independence. This was not what was promised Alaskans at statehood, and why the State must continue to fight."

"We know these resources can be developed safely and responsibly, and with the support and involvement of the local communities that live within the 1002 Area," said John Boyle, Commissioner of the Alaska Department of Natural Resources. "The only obstacle is the radical environmentalist agenda of the Biden Administration."

According to its own planning documents, the federal government estimates there are more than seven billion barrels of recoverable oil within the Coastal Plain, and, under federal law, the State is entitled to 50 percent of the royalties paid under the leases. Even if only half of the recoverable oil could be produced, Alaska would be entitled to nearly $25 billion in royalty revenue; this is in addition to the millions owed to the State for its share of the lease rental fees and bonus payments made.

Once the United States issued these leases, it owed the State a duty of good faith to protect the State's royalty interests. But, by canceling the ANWR leases, the United States breached its obligations. The United States' policy decisions have consequences, especially when those decisions lead to a breach of contract. Here, one of the consequences of the United States' cancellation of the Coastal Plain oil and gas leases was to deprive the State of billions of dollars in statutorily-provided revenues. Now it must address the results of that policy by providing all compensation required by law to the State of Alaska.

This lawsuit adds to the growing list of challenges to federal actions affecting Alaskans, most notably the State has filed suits in federal district court and the Court of Federal Claims challenging the EPA's unlawful decision to put off limits 300 square miles of State lands to mineral development and is asking for $700 billion in compensation.

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Department Media Contacts: Communications Director Patty Sullivan at [email protected] or (907) 269-6368. Information Officer Sam Curtis at [email protected] or (907) 269-6269.

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