Alaska To Offer Cook Inlet Basin For Oil And Gas Leasing
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State Plans To Offer Entire Cook Inlet Basin For Oil And Gas Leasing

The State of Alaska is planning to auction off the subsurface rights to oil and gas activities on 4.2 million acres of private and public land in Cook Inlet Areawide Sale 85. The sale covers just about everything in the Cook Inlet Basin from the Kachemak Bay watershed to the Mat-Su Valley, including the cities of Anchorage, Kenai, and Wasilla, the Kenai, Susitna, and Yentna Rivers, Potter’s Marsh, Cook Inlet, Turnagain and Knik Arms.

Alaska’s Constitution requires the Commissioner of Natural Resources to make a determination that it is in the state’s best interest to sell resources before state oil and gas leases (or timber or mineral deposits) can be sold. State law grants broad discretionary authority to the Commissioner regarding what information is considered (or not considered) when a best interest finding is made. In the case of oil and gas lease sales, not only does the best interest finding describe the Commissioner’s decision regarding what leases will be sold, it also includes mitigation measures by which lease buyers must abide in developing the tracts they purchase.

The oil industry has often complained that the BIF process is time-consuming and arbitrary. Consequently, two years ago, the Alaska Legislature passed a bill which allows the Commissioner to develop BIFs for the entire oil basins of the two regions in Alaska where oil and gas deposits are currently known to exist: Cook Inlet and the North Slope, including the Beaufort Sea. These “areawide” BIFs will stand for ten years with virtually no additional environmental review. During these ten year periods, the state will annually offer all unleased acreage within these areas for oil and gas leases.

Private property owners should be aware that if their land is within the Cook Inlet Basin, it is probably on the Sale 85 map. Because most private property owners do not own their subsurface mineral rights, the oil industry may buy leases from the state and drill on private land for the oil beneath, although it must compensate the surface owner for resulting damages.

Stacey Marz, Trustees’ Cook Inlet Issues Coordinator stated, “Trustees is concerned that by offering the entire Cook Inlet Basin for oil and gas activities, the state is giving the oil industry priority over other sustainable economic activities such as fishing, tourism, and wilderness-based recreation.”

In the wake of the controversy over Lease Sale 85A, which was held last December and included the lower Kenai river, Trustees and other groups were able to convince Governor Knowles to involve the public in negotiating the terms of the BIF for the Cook Inlet Areawide Sale 85. This month, the DNR will convene a stakeholders group to negotiate the terms o f the BIF for Sale 85. Trustees has been invited to participate in the negotiations, set to begin the third week of September. The negotiations will include a discussion of which lands within the sale area will be off limits to oil and gas development, as well as what mitigation measures will be required for development of oil and gas leases sold.

As a result of the Governor agreeing to negotiate the finding for Cook Inlet, the public will have a greater opportunity to discuss how to protect the region’s exceptional resources, existing economies, and subsistence ways of life in the context of state actions to expand oil and gas development. “We are cautiously optimistic that a negotiated best interest finding for Cook Inlet oil and gas development will give us a better outcome than if the BIF were left solely to the Commissioner’s discretion,” added Ann Rothe, Trustees’ Executive Director.