Leaked memo: Biden Administration jacked up fees on Cook Inlet gas leases to make it uneconomic to drill

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2092

The Biden Administration acknowledged in a memo that charging energy companies small fees to drill in Cook Inlet would provide “greater energy security” but the administration hiked royalty fees anyway, according news first reported by Fox.

The memo was accidentally posted by the U.S. Department of the Interior, showing that the administration is putting its climate fixation before the needs of Alaskans for natural gas for heating. In 2020, natural gas fueled 42% of Alaska’s total utility-scale electricity generation and hydroelectric power generated 28%, according to the Energy Information Administration.

The memo states that, at a lower royalty rate, “If a Cook Inlet prospect would be developed, there would be additional government revenues and greater energy security for the State of Alaska, especially if development of natural gas resources in the Cook Inlet ameliorated the long-term supply challenges facing the Anchorage area. Nevertheless, because of the serious challenges facing the Nation from climate change and the impact of GHGs from fossil fuels, BOEM is not recommending this option…” [emphasis ours].

The Interior Department memo made recommendations to Acting Assistant Secretary for Land and Minerals Management Laura Daniel Davis, on the Cook Inlet Oil and Gas Lease Sale 258, which was put into the Inflation Reduction Act due to the dogged efforts of Senators Dan Sullivan and Lisa Murkowski.

Former Bureau of Ocean Energy Management Director Amanda Lefton recommended that, due to climate change and the need to discourage oil and gas, the Department of the Interior enact higher royalty fees for 958,202 acres of Cook Inlet, according to the memo obtained by Fox News Digital.

DOI Assistant Secretary Laura Daniel-Davis agreed with the recommendation and signed off on it.

Sen. Dan Sullivan said, “This leaked memo is shocking & disturbing. Apparently the Biden administration’s climate zealots would rather manipulate prices and see Alaskans freeze in the winter from an energy shortage than conduct a lawful Cook Inlet lease sale.”

The Cook Inlet basin is Alaska’s oldest producing oil and gas basin, producing since before statehood. Peak production occurred the early 1970s at 230,000 barrels per day. The fields that are proven in Cook Inlet only have enough gas to supply the Southcentral area of Alaska for about four years, after which Alaska would have to find other alternatives, such as importing natural gas, according to a recent report from the Alaska Division of Oil and Gas.

62 COMMENTS

  1. Go figure!
    And no help from our representatives, we are being set up for very rough times. This is a intentional destruction of our energy system.
    Of course we wouldn’t vote for this. So somebody moves these destructive policies forward and places the useful fools who appear to represent us into positions of influence.

  2. The Biden administration is anti-human, and anti-USA. Anti-Oil & Gas is just another prong of their agenda. They foster war, famine, disease and anti-energy policies. This is part of their infrastructure plan. Deny new infrastructure and destroy it, that is.

  3. Just another display of why the US House of Representatives needs to be re-apportioned and it’s sized reduced to half of what it is now.

    At least then, western states like AK, WY, and MT would actually have some significant representation in the House, and we’d at least be semi-relevant during the Executive elections.

    Now, the US can treat AK essentially however it pleases interests in NY or CA…like a territory.

  4. So the Big Guy ran another con on America. Show of hands of anyone genuinely surprised.

    Biden is the greatest assist to Islamic Jihad ever. The goal of radical Islam is to take us back to a more pure time in the 13th Century.

    Biden is determined to do everything he can to help. From Iran to oil, he’s hurting us like Islamic Jihad and friends ever could.

  5. Do not be fooled: The sweethearts at Interior know that there are few, if any, reasonably-priced alternatives to generating electricity with natural gas here in Anchortown. This is an act intended solely to cause economic pain to those living in Southcentral Alaska. (Any benefits are entirely imaginary.). If Representative Peltola cares at all about Alaskan consumers, she would challenge and play hard-ball with the Biden regime. What form could that take? Decline to vote with the Democrat minority in the House of Representatives. Reminder that you have a two-year term.

    Note to Senator Murkowski: You are now the center of attention. Who do you represent? Do you care? What are you prepared to do? When can we expect to hear from you? A small item – it will be difficult to complain about “the process” on this one.

    • Let’s start importing coal from Fairbanks and see what the conservationist cheek clapers have to say about that.
      If they were people of conviction they’d immediately self terminate to offset our additional carbon emissions.

      • Sure, we could switch to coal but the costs of doing that would be extreme and the Biden regime and enviros would go crazy. We could add a bunch of wind and solar but at significant cost and reliability would decline. Interior’s move is INTENDED to cause economic pain without benefit. That is absolutely perverse. What kind of person behaves and thinks like that?

        • “…….the Biden regime and enviros would go crazy……”
          Obviously, they already have, and long ago. If that coal is on state lands, flip them a finger as we begin to mine it.

  6. To be fair Biden is but a doll on strings here the real people running him are Obama/Susan Rice & Valerie Jarrett.

    • Don’t forget the Russian Ogliarchs. They pumped over a billion dollars in bribes. Hunter and Joe had lunch with them. Such brazen arrogance. Do it until the courts say that you can’t. Reports say RO’s got dinged a $850k fine. Keep it legal. Right?

  7. We need to declare an emergency use authorization for our energy and our resources it is an emergency and it’s something that we need to take the federal government to task on and develop our resources and let them take it to the Supreme Court to show that we are in a better position to develop our resources than any other place in the world. This is a statehood issue in Congress can take it up and defund any action the EPA could take to reduce our ability to produce energy safely and economically in the future. Because if we don’t we may fail to be a state and we may also fail to be a country. It is time for us to declare an emergency and develop our resources and stop the social decay that plugs us and is killing our people this is more important than even the covid can pandemic we went through.

  8. We should just develop the gas and tell the feds to butt out. What are they going to do to us that they haven’t already done. This state is shut down by the left and they don’t care. We have to make a stand somewhere and this seams like a good place to start. The feds need to get out of states business. They should not have any land and if they want a military base or an office building they can rent it from the state. This is ridiculous. As we have gas right down the inlet, we should not have to import something that we have locally.

        • I don’t care about federal waters. What are they going to do come up here and barricade us. It’s time to make a stand and tell the feds to go pound sand.

          • Mark,
            I don’t see many multimillion or multibillion dollar oil and gas companies willing to risk litigation and their equipment by drilling in federal waters without a lease agreement or permit. I know all of the oil companies that I’m a shareholder in wouldn’t waste their resources like that. Shell fled the state after spending billions and being limited by the feds.

            This isn’t a state issue, it’s not a governor issue, it’s not a oil company issue, it’s a federal issue and an issue of environmental extremism. Until we outlaw environmental extremists from holding office, serving in the bureaucracy, and using litigation as a way to tie up responsible development then thus is what we get. With any hope these extremist moves will open the eyes of the public and there will be push back.

        • Federal just means people. These resources belong to the people of the United States and last time I looked, that is Alaska. The Fed’s just manage them. Maybe it’s time We The People started managing our own resources. I’ve grown tired of DC thinking that they know best. Maybe in protest, we create a bigger carbon footprint that oil production does by burning all these spindly Black Spruce trees for firewood statewide. Stick that in your carbon sequestration Dunleavey!

          • I agree totally and that’s what I tried to tell Stevie o but he is afraid of the feds. We have a large bank account and more oil and mining that could support this state without the feds. What are they going to do send the military or federal Bureau of incompetence. We outnumber them.

          • Mark,
            Are you really suggesting that the state should use the Permanent Fund to develop oil and gas on federal lands? Do you prefer your ism prefaced with social or commune? You think the state of Alaska with less than 750,000 people out number the US military?

      • Alaska being the federal dollar recipients that they are… maybe we shouldn’t tell the feds anything. Maybe just listen to them until we can start being somewhat independent of their support. We can’t beg them for money decade after decade then tell them to eat sh– if they want a hand in how we run things up here.

        • Stevie o you are part of the problem IE we can’t it won’t work we rely on the feds too much. Your view is exactly why we are in this mess. Let’s go a different direction. And no the military cannot go against its own people by law. I am just suggesting an alternative as the future doesn’t look very good and yes, with all the minerals and well in the state we could replace the permanent fund. Radical times call for radical choices. You just don’t wanna get involved. Just tell everybody why it won’t work.

          • Mark,
            Conservatives believe in the rule of law, not lawlessness.

            If you want to join in trying to change how things are going you are going to need to get involved with practical ideas on how to change the laws in place and how to change the politicians in place and the policies inplace. Spouting crazy nonsensical ideas that go against the rule of law isn’t going to affect any change.

          • Steve, that is a specious response, as there IS NO rule of law anymore! Haven’t you been paying attention?
            While you conservatives continue to prattle on about “the rule of law”, “fair elections”, and other such academic nonsense, the radical left is subverting and flaunting those notions right and left to pummel all of us into the ground, and destroy the last shreds of freedom in the country. Obviously, a new tactic to countering their totalitarian corruption of every rule and law is needed.

    • Umm… they could quit pumping welfare dollars into our state. Wich Alaska lives on. We can’t make a move without asking the federal government for money. Mark have you ever been to alaska? We live off the taxpayers from the lower 48

  9. We have a government agency actively advocating against doing what is best for government revenue, energy security, and the very people that the government agency is sworn to protect and serve? Seems like that government agency has outlived it’s purpose and anyone involved with this decision should be treated as the obvious traitors that they are.

    How anyone living in Alaska using natural gas for heating or cooking, or who uses electricity generated by natural gas could ever vote for radicals who are pushing this insane and asinine agenda is beyond me. Yet the majority of Anchorage voters continue to elect lunatics to represent them, and because Anchorage is the population base of the state we have a disproportionate number of lunatic representatives.

    • Steve-O, The Biden people are only following the ” Science”! Shutting down Greenhouse Gas emissions. along with Covid Lockdowns and forced Medicalization upon the populace are also part of following the ” Science.”

      Why are you a science denier Steve- O? I think people like you need to be sent to the Pol Pot school of continuing re-education. Can’t you see we’re trying to Save the Planet and eradicate Covid and end Social Injustice here? Action has to be taken immediately and those who hold to such archaic notions like the Declaration of Independence and the U S Constitution and the rule of Law will not be tolerated.

      • Put down the koolaide and step away. You have a CNN and ADN overload. Take off the rose colored glasses so you can see through the bs.

        • Rich , quite the contrary my friend, in a world gone completely mad, where we are stuck in a paradigm where darkness is illumination and where evil is celebrated as good and good is castigated for being evil…
          Winston Churchill perhaps put it best,
          at a dinner party Mary Astor remarked to Winston, ” Winston, if you were my husband, I would poison your soup”, Churchill replied, ” Mary if I was married to you, I would drink the soup!”..

    • “…….How anyone living in Alaska using natural gas for heating or cooking, or who uses electricity generated by natural gas could ever vote for radicals who are pushing this insane and asinine agenda is beyond me…….”
      Turn the gas off and make them buck wood like we did in the old days, and they’ll leave like their a$$e$ were on fire.

    • And your government is not playing within the rules. You don’t understand. What has been attempted and stay within the legal laws has not worked. The left has proven it won’t work because they have the law on their side. We need to see the heck with the law and do what we need to do to restore a balanced justice and legislative system. No more Mr. nice guy because your way doesn’t work.

  10. Sure miss the days when stories like this were made up. Suppose the intended purpose is to freeze us into submission. After they clean us out.

  11. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces (asserts) a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. Such has been the sufferance these Colonies (states) and such is now the necessity which constrains them to alter their former Systems of Government.

    Among those abuses:
    -He has refused His assent to Laws, the most wholesome and necessary for the public good.
    -He has combined with others to subject us to a jurisdiction foreign to our constitution, and acknowledged by our laws; giving Assent to their acts of pretended legislation.
    -Cutting off our trade with all parts of the world
    -Imposing taxes on us without our Consent

    Excerps from the real DOI- the Declaration of Independence

  12. Suzanne, what reason did you have for not publishing my comment about Hillcorp entering into a contract with Fairbanks utility to provide LNG to replace that coming from Cook Inlet?

  13. I O, I know that my use of the handle, Oosik Puk could be construed as a cultural appropriation, but then what Alaskan from birth doesn’t employ indigenous lingo to describe his or her thoughts? Words can be used in many ways, some words are gentle and loving, others are harsh like a weapon, not unlike a heavy club or in this case a Paleolithic Thors Hammer!

  14. big nothing here. State of Alaska offered over 3 million acres at 12.5%. Leased around 23 thousand one bidder. Feds offered around 1 million acres at 18 3/4%. leased around 6 thousand acres one bidder. Not much difference in interest by companies. Besides Hillcorp in 2017 there has been no interest in cook inlet leases for 20 years. Biden’s 18 3/4 is not the big problem here.

    • You obviously do not understand operating margins if you think that a 6.25% difference is nothing. In many cases it is the difference between being economically feasible or not. Claiming there’s been no interest in Cook Inlet leases for 20 years only shows your ignorance on the subject.

      • What made this uneconomic was the loss of its large customer (Fairbanks) to North Slope gas Steve-O. Pretty easy for producers to back away in this case.

        • Bill,
          That’s laughably ridiculous. The Fairbanks natural gas market is a small neighborhood with about 2,000 customers.

          • Note it’s a 20 year contract Steve-O with the intent that more customers convert to that gas if it’s priced right. At the time of the building of those NGL storage tanks they had the potential to provide gas to over 11000 properties and likely more are converting every year. That long-term gas supply from NS doesn’t hurt either.

          • Bill,
            And do you think an additional 6.25% fee would make it more or less feasible to process and ship LNG over land to a market the size of a small neighborhood hundreds of miles away from where it is drilled?

            No need to reply, it would obviously make it less feasible.

          • So-what Steve-O?
            This NS supply is three times the amount from Titan and so the total amount of gas available to Fairbanks is 4 times the amount shipped now. That’s not a small neighborhood either. And this NS gas contract was negotiated because that utility was told (by Hillcorp) “it might not be able to renew contracts for drilling in Cook Inlet as they expire, and they said there aren’t enough reserves.” And no mention of an additional 6.25% fee, either.
            ‘https://fm.kuac.org/energy-and-environment/2023-01-18/igu-to-buy-first-commercial-north-slope-lng-to-support-growth-in-interior

          • Bill,
            So what? A market of 2,000 customers is a small market. Like astronomically small. Even if your 11,000 customers were the high-water mark that is an astronomically small market. That is a small neighborhood in any city in the US, it’s a small neighborhood in Anchorage.

            If you think that 6.25% fee isn’t baked into the statement “it might not be able to renew contracts for drilling in Cook Inlet as they expire, and they said there aren’t enough reserves.” then there’s no hope for you understanding the spoken or written word…oh right, you’ve already proven that time and time again.

            Sheesh. It might not be able to renew contracts for drilling in Cook Inlet, gee I wonder why.
            Bill there is absolutely no way you are this dense…

            After all the years of back and forth I refuse to believe you are that dense.

            Are you really that dense Bill?

            Really?

          • Steve-O, all of the growth has gone to North Slope gas because that utility was told there wasn’t enough reserves and Leo below destroyed your 6.25% number that for some reason you want to hang your hat on.
            Keep it up though but nobody believes it. And recently you were complaining about someone on here with their ad hominem attacks yet you feel the need here when you don’t have an argument. That’s the first defense of a bullchitter, but you know that.

          • Steve-O, you must still be recovering from my showing you how you had no idea what a pedo was. Did you finally figure that one out?
            Back to the ad hominem attack-you don’t have an argument so call someone “dense” in three different paragraphs in a row. Over the top Steve-O, and likely a response for being shown as ignorant about what a pedophile is.
            Your turn.

          • Bill,
            You’re the only guy who would be proud of supporting the sexual abuse of a minor as young as 13 as long as you can score some imaginary internet points that not all sexual child abuse is pedophilia. I acknowledged that not all sexual abuse of a minor is pedophilia in response to your stunning statement that you find children as young as 13 to be fair game sexually. Were you really too dense to understand that also? Are you going to say that is an ad hominem attack? Even though for some reason you are the one who brought up your own depravity in multiple comment sections?

            I am not nor have I been the one trying to change the subject, that’s you in your effort to deflect from the fact that the Biden Administration was caught red-handed trying to preemptively kill gas leases in Cook Inlet. But you do you Bill…

          • Keep it up Steve-O about your strawman argument using that 6.25% increase that Leo destroyed below and you’ve still not responded to. He clearly stated the increase at 2.25% which is still being ignored by you although you didn’t mention the percent increase in your latest post.
            You seemed more interested in accusing me of wanting to see children being considered fair game by adults when all I did was distinguish the difference between pedophiles and adults having sex with those under the age of consent in AK. Since you didn’t know the difference yourself and made the asinine comment about Alaska teachers being full of pedophiles it’s not that surprising that you also misunderstood my attempts at teaching you and the many other clowns on here the difference between these two different criminal classes. It’s no wonder I used to refer to you as “fourflusher.” Heheh!

          • Well if we are just calling names now, I suppose the most fitting one for you would be Pedo-Bill.

            See you around Pedo-Bill.

            Your buddy,
            Fourflusher

        • Calling me “Pedo” is funny since you have no idea what it is, even.
          I believe your comment on this subject suggested that our public schools had large numbers of “Pedos” working for them. I think it went “it’s amazing how many” so you can probably give us a few examples (should be easy for a fourflusher) Heheh!.

      • actually I understand margins. The Inflation Reduction Act changed the 100 year old rate to 16.5% This is more in line with todays states rates. I believe the issue here is the extra 2.25% that was added on.

  15. Nowhere in this article is an example of the jacked up fees, or a before and after comparision. Also no testimonials from companys showing how they were discouraged by the royalty. Need more information.

  16. Fed leases 2004 no bids received
    2007,2009,2011 canceled lack of interest. 2016 state lease no bids.
    2022 state at 12.5% leases around .7% of area offered. 2022 feds lease .6% of area offered. Both received bids from only one company. 2021 was the first time since 2015 anyone besides Hillcorp got a state lease. The 12.5% had been in place for over 100 years.The state gets 90% of the royalties so Biden is doing the state a favor. You can make the argument that more companies might have bid on more leases at 12.5% but I do not see history showing that.

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