Cook Inlet oil lease sale process on pause

Feb 4, 2021

A Cook Inlet oil platform near Kenai.
Credit Rashah McChesney/Alaska Energy Desk

The federal government has hit pause on preparations for an oil lease sale in Cook Inlet, after President Joe Biden signed an executive order indefinitely halting new leases.

The Bureau of Ocean Energy Management was gearing up to solicit bids on 1 million acres in Cook Inlet’s federal waters later this year. But Biden said on Jan. 27 his administration wants to review the federal leasing program — one part of a broader order geared at combating climate change.

Before the lease sale stalled, BOEM had already released a draft environmental impact statement. The comment period for that impact statement and all February meetings are now canceled.

Kara Moriarty is the president and CEO of Alaska Oil and Gas Association. She said it wasn’t surprising that the Cook Inlet lease sale was paused after Biden’s order.

“What we don’t know is, is this indicative of all lease sales into the future? I mean, we certainly would hope not," she said.

Even without presidential intervention, it’s not clear that the federal bureau would have held the lease sale. The agency canceled lease sales in 2006, 2008 and 2010 due to lack of industry interest. Hilcorp was the only bidder in state and federal lease sales in Cook Inlet for several years. 

Environmental groups say the moratorium is a good thing. Cook Inletkeeper Advocacy Director Bob Shavelson said it’s refreshing to see the new administration take action.

“And there has been strong opposition over the decades to industrializing lower Cook Inlet, and we’ve got strong commercial fishing and sport fishing and tourism and subsistence economies here that would directly conflict with heavy industry and oil and gas development," he said. "So it doesn’t make sense to throw all that away so Hilcorp can make a few more dollars.”

Tim Dillon is the executive director of the Kenai Peninsula Economic Development District. He said even without widespread industry interest, it’s important for Alaska that the opportunity is there. 

“Our governor has said over and over again that here in Alaska, we do it the safest way possible," he said. "And people know that. And to just put a stop on everything, really hurts an industry in a big, big way.”

If the Biden administration does let leasing proceed, BOEM will open a new comment period.