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Cook Inlet Lease Sale 258 canceled, DOI cites "lack of industry interest"

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BOEM

On May 11, 2022, the Biden Administration announced it would cancel a proposed oil and gas lease sale in the federal waters of Cook Inlet. The Department of Interior issued a statement confirming it “will not move forward” with Lease Sale 258, as well as two other off-shore lease sales in the Gulf of Mexico (Lease Sales 259 and 261, respectively). This decision closes over 1 million acres in the waters just west of the Kenai Peninsula due to a “lack of industry interest.”

Federal law requires the Department of the Interior to adhere to a five-year leasing plan for auctioning offshore leases, like Lease Sale 258. The Bureau of Ocean Energy Management (or BOEM) is the federal agency under the Department of Interior that is responsible for these offshore leases. The BOEM has canceled lease sales in Cook Inlet three times, between 2006 and 2010— also citing a “lack of industry interest.”

The last federal Cook Inlet lease sale (Lease Sale 224) was five years ago, in 2017. The oil and gas company Hilcorp was the only bidder and acquired 14 leases covering almost 80,000 acres for just more than $3 million. It was the first time in 20 years that a company had bid on federal leases in Cook Inlet.

State Leases are a different story. Last June, the state of Alaska auctioned off 3.3 million acres of oil and gas leases in Cook Inlet resulting in eight successful bids from two different companies. For Lease Sale 258, it will be another five years before it can be reconsidered for potential lease.

Governor Mike Dunleavy, and US Senators Lisa Murkowski and Dan Sullivan have issued statements condemning Wednesday's announcement of the cancellation of the lease sale.

In press release on May 12, 2022, Sen. Murkowski stated, “Citing a ‘lack of industry interest’ is nothing more than fantasy from an administration that shuns U.S. energy production.”

Both Sen. Murkowski and Sen. Sullivan believe that there was no way to gauge whether there was an interest, because these leases were not open to bidders. Most companies choose to keep their interests confidential.

“You never really know until the actual lease is held what industries are interested, and which are not,” said Cook Inletkeeper Advocacy Director, Liz Mering. She said that historically oil and gas development in Cook Inlet has posed many logistical considerations.

“We have heavy winds, hard, long winters, high tides, all of those things, which makes it less appealing to a lot of industry,” said Mering.

In an interview on April 6, 2021 with KBBI’s Josh Krohn, Mering said that there had been overwhelming public commentary on the lease sale.

“And so we had a public comment period in December with a draft environmental impact statement that came out in October and then ended December 13, [2021]," Mering continued.

"Almost 93,000 people took the time to comment on this lease sale. And actually 99.98% of them were expressed concerns and concerns for our fishing and our tourism and on our lands and waters and our beluga whales and all of the things that we who live here love so much.”

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