Just One Bid Put In At Controversial Cook Inlet Drilling Sale

The pushback from the opening up of lease sales for Cook Inlet has been significant. And today’s lease sale proved to be a rather less than proactive venture.

BOEM just held the Cook Inlet Oil & Gas Lease sale. Hilcorp showed up with 1 bid for $63k. The lack of industry interest holds. It's time to move on from offshore oil drilling and protect our marine mammals and fisheries. 2023 is for renewable energy.

— Alaska Environment Action (@AKEnvironment) December 30, 2022

Here’s a press release from Arc Initiatives with reaction from several outlets:

Biden Administration Alaska Offshore Oil and Gas Lease Sale Confirms Lack of Industry Interest; Alaskans Call for the Administration to Remove Cook Inlet From Future Sales

After canceling the sale in May of 2022, the Biden Administration moved forward with leasing Alaska’s Lower Cook Inlet—resulting in only 1 bid on 1 block out of 193.

(Anchorage, Alaska) – Today, the Bureau of Ocean Energy Management (BOEM) held the Inflation Reduction Act (IRA) mandated Lease Sale 258 to expand drilling in Alaska’s Lower Cook Inlet. The sale comprises over 950,000 acres in the Inlet, an area that has been essential to commercial and sport fishing, subsistence gathering, and tourism to sustain the local economy. This lease sale is currently being contested in a lawsuit filed by Earthjustice on December 21, 2022.

Today’s federal lease sale resulted in only 1 bid on 1 block out of 193 available, highlighting the continued disinterest to drill in Alaska’s Lower Cook Inlet. Bidded on by Hilcorp, a company with repeated violations of environmental and regulatory requirements and a lack of transparency with the state when it comes to how much it should be paying for Alaska’s resources. This is not a company that should be allowed to drill in such a biologically diverse and critical area. 

Earthjustice’s recently filed lawsuit  – with partners Cook Inletkeeper, Alaska Community Action on Toxics, Center for Biological Diversity, Kachemak Bay Conservation Society and Natural Resources Defense Council – challenges BOEM’s Final Environmental Impact Statement (EIS) and the Department of the Interior’s Record of Decision to hold the sale, stating that they violate the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA). The agencies failed to meaningfully account for climate impacts or find alternatives to result in the least harm to the climate, marine life, and Cook Inlet communities. This sale also sounds the alarm for President Biden to use executive action to follow through on his climate commitments by finalizing a Five Year Plan with no new offshore oil and gas leases.

Alaskans and Tribal leaders directly impacted by this sale have expressed concerns over the economic and environmental consequences it would have on their ways of life.

In response to today’s sale, Sue Mauger, Science & Executive Director for Cook Inletkeeper released the following statement:

“Local opposition to Lease Sale 258 and new drilling activity remains strong. Today’s outcome reinforces that fossil fuel development in Cook Inlet is no longer a sound investment. Alaskans know our climate crisis is no joke and are ready to move beyond the fossil-fuel era and those who prioritize economic profits over liveable communities. We won’t give up trying to protect Cook Inlet from carbon pollution, oil spill risks and shortsighted thinking.”

The failure of companies, like Hilcorp, to address climate change implications along with the quickly lowering cost of renewables mean fossil fuel extraction is simply too big of a risk to take on. It’s time to move towards clean energy, and Cook Inlet is primed to be a leader in the renewable energy transition. A transition that maintains the inlet’s beauty, biodiversity, and local economy.

Additional statements in response to the results of Lease Sale 258 and including no new leases in the next Five Year Plan:

“They call these offshore oil leases but, for us in Kachemak Bay, these waters are neither out of sight nor out of mind. New drilling in Lower Cook Inlet will dramatically change our lives, our local economy and subsistence cultures,” said Roberta Highland, President of the Kachemak Bay Conservation Society.

“This damaging sale never should have happened in the first place, and we’ll continue challenging it in court and fighting to preserve beautiful Cook Inlet,” said Kristen Monsell, oceans legal director at the Center for Biological Diversity. “We urge Biden not to issue any leases without meaningful consideration of drilling’s threats to local communities and wildlife like the endangered Cook Inlet beluga whales, as he’s required to do by federal law.”  

“Lease sale 258 was a flop. Only one oil company showed up and bid on one single lease. This is good news for the climate and those who call Cook Inlet home, like the endangered beluga whale. The result should stiffen Interior’s spine to stop leasing our public lands for fossil fuel and instead align their management with the urgent need to combat climate change. We urge Interior to start by exercising its discretion not to issue a lease to Hilcorp, the sole bidder on the lease. It is a troubled operator with a long history of violations, the lease on which it bid is in important habitat for endangered belugas, and there should be no more oil leasing in the Inlet for Hilcorp or any other company,” said Erik Grafe, Attorney with Earthjustice.

“The lackluster response to this lease sale made clear that there’s no need to lease this vibrant ocean ecosystem for oil production. BOEM should not issue a lease to Hilcorp, whose record of safety violations and spills shows they have no business drilling in Cook Inlet,” said Julia Forgie with the Natural Resources Defense Fund.

Additional Background

Lease Sale 258 covers critical habitat for the endangered Cook Inlet beluga whale, along with other marine life that would be impacted by new oil and gas development and the likelihood of oil spills. Every oil spill started with a lease – and this sale is no different. Increased development will also exacerbate the climate crisis and increase carbon emissions at a time when there is no room for any new fossil fuel development in order to reach our goal of limiting global warming to 1.5 degrees. Warming waters are already threatening local fisheries and biodiversity in the Inlet.