Opposing Lease Sale 173 in Cook Inlet

When Interior Secretary Bruce Babbitt visited Alaska in July, Trustees Executive Director Ann Rothe gave him a letter, asking for the removal of Lower Cook Inlet from the federal Oil and Gas Leasing Program for 1997-2002. This five year program includes Lease Sale 173 which covers virtually the same two-million acre area as the controversial Lease Sale 149.

In April 1997, the Minerals Management Service (MMS) pared back Sale 149 to 430,000 acres, responding to objections from Alaska Governor Tony Knowles, fishers, Alaska Native subsistence users, local residents, and conservation organizations. Lower Cook Inlet is not only an incredibly scenic area, it also supports diverse marine and terrestrial wildlife populations, thriving sustainable fishing, tourism, and recreation economies, and subsistence ways of life. Opponents of offshore leasing in this area believe that oil and gas activities will irreparably change, and at worst, destroy the social, cultural and economic bonds in Lower Cook Inlet communities.

Trustees’ letter to the Secretary noted that notwithstanding Lower Cook Inlet’s extraordinary environmental values, and sustainable economies, past and present response to lease offerings in Lower Cook Inlet demonstrate that industry interest in the area is low. On June 11, 1997, Miami-based Forcenergy, Inc., was the lone bidder on only four of the 101 blocks offered in Sale 149, less than three percent of the area available for lease. Forcenergy bid $1 over the minimum bid price required by MMS, the lowest amount bid in fifteen years for a federal offshore oil and gas lease sale in Alaska. Awarding sole bidders leases based on the bare minimum bid defeats the purpose of the competitive bidding process and evidences the lack of interest in leasing in Lower Cook Inlet. Instead of the process ensuring a fair return to Americans for leasing public resources, the Sale 149 experience ensured the opposite outcome. Clearly the leasing returns did not even pay the costs of putting on the sale.

This extremely low response should have come as no surprise to MMS, who has stated that industry interest in this area is “low,” because it is consistent with the results of past requests for industry interest and past offerings in the area. As a result of previous offerings in the same area in 1977 and 1981, MMS issued 100 leases on which companies drilled thirteen exploration wells which have all been plugged and abandoned. No leases were issued in the 1982 re-offering sale. A 1984 sale was postponed indefinitely in February 1985, and finally canceled in May 1986 for lack of industry interest.

Coastal residents spent countless hours participating in the public process on Sale 149 by submitting written comments, and testifying at agency hearings, as well as meeting together, writing letters to local newspapers, communicating with government representatives, and worrying about leasing outcomes. Stacey Marz, Cook Inlet Issues Coordinator stated, “Citizens who have spent years opposing oil and gas activities in Lower Cook Inlet thought MMS finally heard their concerns when it reduced Sale 149. Immediately offering the same area as Sale 173 sends the message that citizen participation is meaningless.”

Coastal communities throughout Cook Inlet and the Kodiak Islands need relief from the incessant oil and gas leasing schedule. To require these communities to continue to fend off lease sales year after year, especially in the face of low industry interest and low reserves is an extremely disproportionate burden for citizens to bear. Given the area’s unproductive past, low industry interest and the incompatibility between oil and gas activities and fishing, subsistence, and tourism, Trustees will continue to urge Secretary Babbitt to remove Sale 173 from the Oil and Gas Leasing Program for 1997 to 2002.