Lawsuit over Arctic offshore oil prospect says resurrection of leases was illegal

Environmental and Alaska Native groups have sued the Trump administration over a U.S. Department of the Interior decision to revive oil leases that were terminated in 2024 for lack of progress in bringing a long-languishing offshore Arctic prospect into production.

The Center for Biological Diversity and Sovereign Iñupiat for a Living Arctic filed the lawsuit, which concerns the Liberty prospect in the Beaufort Sea. The Liberty field, with approximately 150 million barrels of oil, was discovered by BP Exploration (Alaska) Inc. in the 1990s. If developed, it would be the first producing oil field located entirely in federal offshore waters off Alaska’s coast.

Various plans to develop Liberty were offered over the years by BP and subsequently Hilcorp, the field’s current operator, but were not carried out.

The three leases that made up the Liberty field and the Liberty Unit itself cannot be resurrected, the groups said in their lawsuit, which was filed Thursday in U.S. District Court for the District of Columbia.

“These leases expired because Hilcorp could not meet the basic requirements, including a workable plan for an oil spill in waters covered by sea ice much of the year, the consequences of which could be devastating to our people,” Nauriaq Simmonds, executive director of Sovereign Iñupiat for a Living Arctic, said in a statement.

“Bringing them back under the name of an emergency is Donald’s administration setting the law aside for industry. We are asking the court to hold the government to the rules that are meant to protect all of us.”

The Department of the Interior declined to comment on the lawsuit, citing policies concerning pending litigation.

The lawsuit concerns a “suspension of production” authorization denied to Hilcorp in the last weeks of the Biden administration’s Bureau of Safety and Environmental Enforcement. That authorization was later granted to the company by the same agency in April of 2025, early in the second Trump administration.

A suspension of production authorization stops the regulatory deadlines for leaseholders to make progress on bringing projects into production. BP and Hilcorp received several such suspensions in the past, based on the companies’ arguments that they needed more time to refine development plans.

The denied suspension was the 12th requested for Liberty.

In their lawsuit, the plaintiffs argue that the BSEE’s reversal was unlawful.

“The Liberty Unit leases had an initial period of 10 years and never produced oil or gas. When BSEE denied Hilcorp’s August 2024 request for a suspension of production, the Liberty Unit leases expired and the Liberty Unit terminated. BSEE lacked the legal authority to rescind the December 2024 decision denying Hilcorp’s SOP because the Liberty Unit leases were expired and the Unit had terminated,” the lawsuit said.

The reversal and revival of the leases was also unlawful because BSEE never explained the reason for its reversal from the 2024 decision, the groups argue in the lawsuit. Additionally, they said, the agency has failed to consider recent information about risks that Liberty development would pose to the environment from oil spills, noise and light pollution and other impacts.

Plans for Liberty, as proposed by both BP and Hilcorp, have alternated between proposals for an artificial island to serve as the drill site and an alternative that would use ultra-extended-reach wells to drill the prospect from existing land. Each company has proposed both types of development over the years.

Despite sporadic exploration programs over the past decades, offshore Arctic oil development has proved too difficult, hazardous and expensive for companies to pursue. A multibillion-dollar program mounted by Shell in the Chukchi was abandoned in 2015.

The Trump administration’s revival of the Liberty leases came amid a broad push for more oil development in federal waters off Arctic Alaska and elsewhere. The administration is proposing several lease sales in U.S. Arctic territorial waters, most of which were put off-limits to oil development by the Biden and Obama administrations. The Trump administration, in its proposed leasing plan released a year ago, has also tentatively planned a lease sale in a region it calls the “High Arctic,” where U.S. territorial claims have not won international recognition.

The Trump administration is also seeking to relax safety and environmental rules for offshore Arctic drilling that it has deemed burdensome to industry.

Earlier this year, the Department of the Interior reorganized BSEE and the Bureau of Ocean Energy Management, reuniting the agencies into what is now called the Marine Minerals Administration.

The two agencies had been split apart during the Obama administration after the Deepwater Horizon disaster of 2010. The Obama administration reorganized what was then the U.S. Minerals Management Service to reduce what its officials perceived as conflicts of interest within the agency. The reorganization separated the revenue-generating functions, which were assigned to BOEM, from the environmental regulation functions, which were assigned to BSEE.

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