Marcus Lerner, ELR Staffer FLS ‘27

On October 23rd, 2025, the Department of the Interior (DOI) Secretary Doug Burgum announced that the Trump administration would open the entire 1.56 million-acre coastal plain of Alaska’s Arctic National Wildlife Refuge (ANWR) to oil and gas development. While previous ANWR lease sales had failed during the Trump and Biden administrations–attracting either minimal interest or none at all–the recent announcement comes amidst a changed economic and legal landscape. Now, oil companies may take a real second (or third) look at drilling in the pristine region.

The 2017 Tax Cuts and Jobs Act (TCJA) required the DOI to hold two ANWR lease sales within seven years. By the time the prior Trump administration scheduled the first deadline to bid for January 6, 2021–just two weeks before Biden took office–every major U.S. bank had already announced that they would not finance Arctic drilling. The sale generated just $14.4 million from nine leases, which were all solely purchased by AIDEA– Alaska’s state development agency–while no major oil companies bid. In tandem with environmental, social, and governance (ESG) concerns, Biden’s inauguration was just two weeks away with his campaign pledge to halt Arctic development. Biden immediately imposed a moratorium–or temporary prohibition–on his first day in office, proving that oil companies correctly assumed it was a region too risky for investment.

The Biden administration canceled the leases in September 2023 for environmental deficiencies. Judge Sharon Gleason, chief judge of the U.S. District of Alaska, held in March 2025 that the Biden administration’s cancellation violated federal law. Judge Gleason held that under the Naval Petroleum Reserves Production Act, the DOI needs a court order to cancel leases containing “valuable deposits,” making it more difficult for regulatory changes made by new administrations. The holding arguably makes a drilling investment more predictable.

Meanwhile, the second mandated sale proceeded in January 2025. The Biden administration complied with the TCJA by offering just 400,000 acres, which is the statutory minimum. Alaska sued, claiming that further restrictions made development “economically and practically impossible.” No companies issued bids, and neither did AIDEA. Burgum’s October announcement rescinded that framework, reinstating the Trump administration’s 2019 program that opens the entire coastal plain with minimal constraints.

In July 2025, Congress passed what the American Petroleum Institute called “the most transformational legislation in decades.” The One Big Beautiful Bill Act fundamentally altered Arctic drilling economics through mechanisms specifically valuable for capital-intensive projects. The law extends 100% bonus depreciation, allowing companies to write off the full cost of land, drilling equipment, and pipelines in one year rather than over decades. For projects requiring billions in upfront infrastructure, this fundamentally changes profit projections.

The legislation also cuts federal land drilling royalties by 25% and expands carbon capture tax credits by $14.2 billion, which is particularly valuable for Arctic reservoirs that require CO2 injection for optimal recovery. Combined with existing subsidies of $30.8 billion annually, federal support for fossil fuel production now exceeds $34 billion per year. 

The administration is also removing non-economic deterrents. DOI announced plans to reduce multi-year environmental reviews to 28 days using emergency authority. The EPA’s proposed rescission of the “endangerment finding” could eliminate the legal foundation for regulating greenhouse gas emissions from Arctic operations. At the same time, corporate actors are shifting their ESG priorities, for example Bank of America explicitly deleting language that commits to a policy of noninvestment for drilling in the Arctic. 

The convergence of these factors–enhanced legal certainty through the District Court holding, transformative tax incentives under the One Big Beautiful Bill Act, streamlined permitting processes, and shifting corporate financing positions–creates conditions fundamentally different from prior failed lease sales. Whether this revised framework translates into actual commercial development remains to be seen, but the economic and regulatory barriers that deterred major operators in 2021 and 2025 have been substantially diminished.