A state agency in Alaska sued the Biden Administration on Wednesday over its decision canceling oil and gas leasings on the North Slope of the state, which is one of the largest reserves of federal land in the United States.

The U.S. is being sued in federal court, Washington, D.C. Interior Department’s decision on Sept. 6, to cancel seven oil and natural gas leases within Alaska’s Arctic National Wildlife Refuge. This area is highly vulnerable to climate changes and contains grizzly bears and polar wolves, snowy-owls and caribou herds.

The Alaska Industrial Development and Export Authority (AIDEA), which held the leases prior to their cancellation, has asked the U.S. District Court of the District of Columbia for them to be restored, arguing that the federal government’s action violates a clear Congressional directive in a tax bill passed in 2017 to open the Arctic up to drilling.

In a recent statement, Republican Alaska Governor Mike Dunleavy said: “The federal government wants to take Alaska’s self-supporting ability away. We have to stop this.”

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The U.S. Interior Department declined comment.

The leases that were cancelled were sold in the final days of the Trump Administration, following decades of efforts by Alaskan officials to allow drilling on the refuge. This was done as part of a long-term effort to boost the petroleum-dependent economy and the state.

After major oil and gas firms chose to forgo the 2020 sale, which would have generated $14.4 million, the state agency emerged as a sole bidder.

The Congressional Budget Office estimated in a report from 2019 that two auctions at the refuge could have brought in as much as $1.8 billion over a ten-year period.

The refuge has no roads or established trails, despite the fact that its coastal plain contains up to 11,8 billion barrels worth of oil.

These factors probably kept drilling companies from showing much interest, along with the volatility of the oil market, the risks posed by legal challenges, and the political uncertainty regarding the future leases, given the impending change of presidential administration.

Two other companies that had won leases during the 2020 auction resigned from their positions in 2022.

Interior Department officials justified the cancellation of the remaining seven leases by saying that the previous administration’s lease sales were “seriously flawed”. They also said the lease sale did not consider climate change impacts, such as oil and gas production in the North Slope.

The State’s Wednesday lawsuit stated that these concerns did not justify the Interior Department’s move because the 2017 Tax Law did not grant the agency discretion to avoid the impacts by refusing to issue leases.