Leasing

As oil and gas prices remain high, and old reserves ebb further toward decline, a second energy boom has descended on Cook Inlet.   For example, despite low industry interest, the Bush Administration continues to offer 2+ million acres of the rich and productive fish habitat for offshore oil and gas leasing in the frontier waters of lower Cook Inlet under the Minerals Management Service’s latest 5-year plan.   And for the first time in fifteen years, an oil and gas corporation, Escopeta Oil,  plans to bring a jack-up rig to drill several offshore prospects in upper Cook Inlet.  Under the State’s areawide leasing scheme, the Division of Oil and Gas will lease an additional 2 million acres of open-water, tidal and estuarine fisheries habitat each year through 2007, in areas where the state already has issued hundreds of leases.  The Administration is also pressing to expand oil and gas development in the Kenai National Wildlife Refuge, a Refuge important to brown bear and spawning salmon.  And while Cook Inletkeeper has made significant progress staving off a new wave of coalbed methane (CBM) development in Cook Inlet, the State continues to look to BLM and state lands as prospects for CBM leasing in prime salmon spawning habitats.

Cook Inletkeeper will work in the year ahead to critique leasing proposals in Cook Inlet, and ensure no new development or exploration occurs in sensitive areas.

The vast majority of Alaska’s oil and gas resources are publicly-owned, and the state leases them periodically – according to the Alaska Constitution – for the “maximum use consistent with the public interest.”  State acreage open for oil and gas leasing includes all uplands, tidelands and waters that cover state-owned oil and gas resources, which generally include the waters north of Kalgin Island in the Upper Inlet, and waters extending three miles out from the mean high tide line in the Lower Inlet.

The state began leasing oil and gas in Cook Inlet in 1959, and in response to industry claims for “predictability,” the Alaska legislature revised the state’s leasing law in the 1990’s to allow for large tracts to be leased on an annual schedule for ten year periods.  In Cook Inlet, the annual areawide sale covers roughly 4.2 million acres of uplands, tidelands and waters, and includes portions of the Kenai River and important habitats for salmon, beluga whales and brown bears.

In 1998, Inletkeeper challenged a state lease sale, arguing successfully the sale was not in the “best interest” of Alaskans because it included important habitat for the dwindling Cook Inlet beluga whale population.  That decision, in combination with a later court decision prompted by Inletkeeper, led the state to delete over 660,000 acres of beluga habitat from state oil and gas leasing in Upper Cook Inlet.  Today, Inletkeeper continues to weigh-in on state leasing activities, to ensure the most important resources and habitats are protected for generations to come.

Inletkeeper's Solutions

Inletkeeper regularly comments on the state’s Cook Inlet area wide lease sales, to ensure lease stipulations adequately protect the region’s fragile resources, and to

Identify and work to exclude sensitive areas where oil and gas development is inappropriate.  For more information on the state’s leasing program in Cook Inlet, contact Bob Shavelson.