U.S. Swapped Land in Alaska for Lesser Tract

The Interior Department swapped nearly $400- million worth of land and subsurface rights in an oil and gas-rich Alaskan wildlife refuge for a native-owned tract worth less than $6 million, the General Accounting Office reported Tuesday.

Interior also threw another bonanza into the bargain in 1983: The native organization, called the Arctic Slope Regional Corp., was given the right to drill the only test well within the wildlife refuge and to retain exclusive rights to the data from it, thus depriving the federal government of information about the value of subsurface rights in the wilderness area.

The tract gained by Interior in the deal was within Arctic National Park. Although the deal allowed Interior to consolidate federal land holdings in the park, the GAO concluded that it was otherwise a failure.

One of the chief reasons given for the swap was that Interior wanted to protect the park land from damage by all-terrain vehicles that native Alaskans use for hunting and fishing. But the GAO concluded that Interior had failed to protect the land it acquired.

Rep. George Miller (D-Martinez), whose Interior subcommittee on water and power resources requested the investigation, blamed then-Interior Secretary James G. Watt for an agreement that he said “has seriously undermined the value to the federal government and the state of Alaska of opening the Arctic National Wildlife Refuge to oil and gas development.”

The swap was known as the Carter Lake exchange.

The refuge is now off limits to drilling. But as a result of the swap, the GAO said that “Arctic Slope and its oil company partners are now in a superior position to all other potentially interested parties, including the federal government, in assessing the oil and gas potential” of the area.

“Without the test well data, the federal government is at a distinct disadvantage in estimating the oil and gas value of the Arctic National Wildlife Refuge, and setting sale terms for oil and gas leases, if the ANWR is opened to oil and gas development in the future,” the GAO said.

The GAO blamed the government’s poor bargain on “absence of procedural requirements.”

Since there are still 20 million acres of native landholdings in national parks, refuges, and other federal lands, it said, Alaska may give rise to similar swaps, and it recommended that the Interior Department adopt firm trading procedures in advance.