Three major oil companies have cancelled plans to drill in Alaska’s Arctic National Wildlife Refuge, a sign that fossil fuel exploration is losing ground against United States environmental policy priorities.

Development of the 20-million-acre area, habitat for polar bears and thousands of migrating caribou and waterfowl, has been opposed by Indigenous communities and environmental organizations since 2017, when U.S. Republicans enacted legislation to mandate two major lease sales in the refuge by 2024, reports the Washington Post.

The Biden administration suspended the leases last year, saying the U.S. Interior Department’s Bureau of Land Management did “insufficient analysis” of drilling impacts in the sensitive area. Then last month, Australia-based Regenerate Alaska—one of the oil companies that acquired land on the pristine refuge—cancelled its lease, following similar moves by Chevron and Hilcorp.

“These exits clearly demonstrate that international companies recognize what we have known all along: drilling in the Arctic Refuge is not worth the economic risk and liability that results from development on sacred lands without the consent of Indigenous Peoples,” the Gwich’in Steering Committee said in a statement.

Analysts say the other two entities holding leases in the area—a real estate investor and the Alaska Industrial Development and Export Authority (AIDEA)—do not have the financial clout or expertise to develop the region on their own. So the three oil companies’ withdrawal makes future drilling in the refuge “far less likely,” writes the Post. It also marks a significant moment for the groups opposing drilling.

“It seems all the oil companies with leases there have concluded that drilling in the Arctic National Wildlife Refuge is unwise after all,” said Erik Grafe, deputy managing attorney in Earthjustice’s Alaska regional office.

“We are glad that these companies may finally have seen the light, concluding that investing in Arctic oil is a bad deal on a planet that urgently needs to shift away from fossil fuels,” Grafe added.

Some supporters of new oil and gas drilling are lamenting the setback. AIDEA Executive Director Alan Weitzner told the Post the decision is not surprising, given what he termed repeated obstacles from the U.S. government. Weitzner added that the companies are likely to turn to oil exploration outside the U.S. instead.

Senator Dan Sullivan (R-AK) said government opposition to drilling runs counter to the Biden administration’s claims to be doing “all they can to bring down energy prices, despite the long time it would take for any new drilling to deliver a finished product.

But regardless of federal policy, many other obstacles would make drilling in the region challenging, writes the Post. In addition to local opposition and a lack of existing infrastructure, melting permafrost from rising Arctic temperatures poses risks to oil infrastructure, making ventures there trickier by the day.

Plus five major U.S. banks and an increasing number of insurance companies are no longer willing to finance Arctic oil businesses. Oil industry analysts say the withdrawal shows fossil companies are increasing their fiscal discipline in face of competition from the renewables sector.

Original article   l   KeyFacts Energy Industry Directory: The Energy Mix