The state of Alaska has sued the federal government to recover revenues it lost after President Joe Biden’s administration canceled oil and gas drilling leases in the federal Arctic National Wildlife Refuge. On Tuesday, Alaska filed a lawsuit in the U.S. Court of Federal Claims, claiming the lease cancellations issued during Republican former President Donald Trump’s administration cost the state hundreds of millions, if not billions, of dollars.
“This about-face by the federal government opposes the direction given by Congress and deprives Alaska of our natural resource rights,” Alaska Governor Mike Dunleavy, a Republican, stated.
The U.S. Department of Interior, which canceled the leases, declined to comment.
This lawsuit marks Alaska’s latest legal action over the cancellations, fulfilling Biden’s pledge to protect the 19.6 million-acre (7.9 million-hectare) Arctic National Wildlife Refuge (ANWR) for species like polar bears and caribou. Drilling in ANWR, the largest national wildlife refuge, had been off-limits for decades, sparking fierce political battles between environmentalists and Alaska’s political leaders, who have long supported development in its coastal plain.
In 2017, Alaska lawmakers secured drilling opportunities through a provision included in a Trump-backed tax cut bill. In the final days of Trump’s administration, officials issued nine 10-year leases for drilling in ANWR.
Under Biden, two entities that won leases withdrew from their holdings in 2022. In September, the U.S. Department of Interior canceled the remaining seven leases issued to the Alaska Industrial Development and Export Authority. The state agency filed a separate lawsuit in October, currently pending before a federal judge in Anchorage, arguing that the administration’s decision violates a clear Congressional mandate in the 2017 tax bill to open up ANWR to drilling.
Tuesday’s new lawsuit focuses on the financial impacts of the Biden administration’s actions on Alaska and seeks to “compel the United States to face the logical and legal consequences of its policy decision.” The state claims that under the Tax Cuts and Jobs Act of 2017, it was entitled to a royalty of 8.335% of the revenues generated through oil and gas production under the leases. Alaska argues that the lease cancellations also deprived it of expected revenue from corporate income taxes and local taxes stemming from oil and gas construction activities, which would have produced billions of dollars in revenue benefiting the education, health, and well-being of Alaskan residents, whose state budgeting heavily relies on oil production.
