US gets 1 bid for oil and gas lease in Alaska’s Cook Inlet

The U.S. government on Friday said it received one bid for the right to drill offshore for oil and gas in Alaska’s Cook Inlet near habitat for bears, salmon, humpback whales and endangered beluga whales.

Hilcorp Alaska LLC submitted the sole bid — $63,983 for an area covering 2,304 hectares or 5,693 acres.

The company is a unit of Hilcorp, which is the largest privately held oil and gas exploration and production company in the United States. It already has leases to drill for oil and gas in onshore areas of Cook Inlet, which stretches from Anchorage to the Gulf of Alaska.

The Bureau of Ocean Energy Management, which conducted the sale via livestream, was offering leases for 193 blocks totaling some 958,000 acres (388,000 hectares) but received just one bid for one block.

The U.S. Interior Department in May said it would not move forward with the Cook Inlet lease sale due to a “lack of industry interest.” But over the summer, Congress passed legislation that called for a Cook Inlet lease sale by year’s end and two Gulf of Mexico lease sales next year. The provisions were part of the Inflation Reduction Act, a sprawling package that also included major investments to fight climate change.

Environmentalists criticized the sale, saying oil and gas leases undermine efforts to address climate change. They also expressed concern that an oil spill could harm wildlife, subsistence gathering and commercial and sport fishing.

Hilcorp said it was proud of its work to revitalize natural gas production in Cook Inlet, which it said nearly two-thirds of Alaskans depend on to heat and power their homes and businesses.

“We look forward to continuing to responsibly produce Alaskan oil and natural gas, create Alaskan jobs and contribute to the state’s economy for decades to come,” the company said in a statement.

Dyani Chapman, the director of Alaska Environment, a nonprofit organization, said Alaska should be looking forward to a cleaner, greener future in the coming year.

“Instead, we’re closing out 2022 with a lease for more dirty, dangerous offshore drilling,” Chapman said in a statement. “For the sake of our beluga whales, northern sea otters, salmon and more, we urge companies to recognize that drilling in Cook Inlet should be left in the past.”

Environmental groups earlier this month sued the Biden administration over the sale, saying an environmental review failed to adequately evaluate how it would affect whales. It also argued that a greenhouse gas emissions analysis was based on flawed modeling and that the review failed to consider “a reasonable range of alternatives” for the lease sale.

The Cook Inlet basin is Alaska’s oldest producing oil and gas basin, dating back to the 1950s, according to the U.S. Bureau of Land Management.

The Bureau of Ocean Energy Management says the new lease will be awarded after a 90-day evaluation process to ensure the public receives fair market value. The Department of Justice will also review the sale for antitrust considerations.

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