Hilcorp Alaska was the successful bidder on a Cook Inlet tract for oil and gas offered by the federal government. The amount just shy of $64,000, it was announced Friday.
Hilcorp was also the only bidder on the lease sale. The tract stretches from Kalgin Island to the north as far as Augustine Island to the south.
Texas-based Hilcorp Alaska has 14 other inlet leases from a 2017 sale, the last one held by the Bureau of Ocean Energy Management. During that offering, Hilcorp was also the only bidder.
Friday’s lease sale was executed on the last business day of the year in what is called in the news business a “take out the trash” day, or a day when the government hopes no one will notice.
The sale, opposed by many within the Biden Administration and offered under duress, was mandated by the Inflation Reduction Act of 2022, the first offshore oil lease auction in five years for the inlet. Hilcorp has not yet begun production in its current leases.
Although President Joe Biden promised he would end offshore drilling, he made a compromise in order to ensure the passage of the Inflation Reduction Act, agreeing to three new lease sales, even after the Department of the Interior had withdrawn a proposed sale in the inlet in May, citing no interest from industry. The Inflation Reduction Act required BOEM to conduct the inlet lease sale by Dec. 31. The other leases mandated are in the Gulf of Mexico.
Biden took criticism from the Left, upon the passage of the act, and took additional criticism today from environmental nonprofit advocacy groups, who say Alaska is the sacrificial lamb to get the Inflation Reduction Act passed.
“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.”
“Today’s lease sale for dirty and dangerous offshore drilling represents the dark side of our nation’s climate law, the Inflation Reduction Act. Continued leasing for oil and gas undermines efforts to address the climate crisis,” said Diane Hoskins, of the environmental group Oceana. Hoskins is also a former field director for the Democratic Party of Georgia and officer at Pew Charitable Trust. “Where oil companies drill, they spill, and that’s why it’s time for President Biden to fulfill his campaign commitment to end new leasing for offshore drilling. The president can make good on his promise by finalizing a five-year plan for offshore drilling with no new leases.” The bid now goes through a 90-day evaluation process to “ensure the public receives fair market value before a lease is awarded, and will be reviewed by the Department of Justice to check for antitrust conflicts.
The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with other Cook Inlet users.
If a lease is awarded, it will be posted to BOEM’s website following the 90-day review. Materials and statistics for Lease Sale 258 are available at www.boem.gov/ak258.