“Even a year ago major companies would have jumped at the chance. Today, not so much.”
“The Trump administration is racing against legal deadlines and a merciless regulatory calendar in its last-ditch effort to sell drilling rights in the Arctic National Wildlife Refuge before President-elect Joe Biden is sworn in at noon on Jan. 20.
Even if the White House succeeds in clearing those hurdles, it’ll still face the cold reality of the market: funding for Arctic drilling is becoming harder and harder to find. Both oil companies and banks have decided they can no longer tolerate the risk of drilling in one of the fastest-warming places on the globe. Ben Cushing, who leads the nonprofit Sierra Club’s financial advocacy campaign, put the problem simply: “Smart money is staying away from this kind of development in the Arctic.”
Buying the leases—which could go for as little as $5 an acre—is the cheap part of the oil exploration process. Every other step—from enlisting consultants to conduct required environmental studies to mounting industrial operations in a remote wilderness without existing infrastructure—is hugely expensive. The break-even price for the oil that companies would extract could be as high as $80 per barrel, according to Rystad Energy, a level the market hasn’t seen since October 2018.”