Interior appeals a court ruling over lower Cook Inlet lease sale

Alan Bailey

for Petroleum News

The U.S. Department of the Interior has appealed to the U.S. Court of Appeals for the 9th Circuit a July order by the federal District Court in Alaska, requiring a rework of the environmental impact statement for the Bureau of Ocean Energy Management's December 2022 oil and gas lease sale in the federal waters of lower Cook Inlet. Hilcorp, the only bidder in the lease sale, bought a single lease. As previously reported by Petroleum News, the District Court ordered that the sale and Hilcorp's lease from the sale must be suspended, until a new approved EIS is issued.

District Court Judge Sharon Gleason had argued that the EIS had not considered an adequate range of alternatives for the lease sale, and that BOEM had not taken the requisite hard look at the impact of vessel noise on Cook Inlet beluga whales, nor on the cumulative impact of lease related activities and other Cook Inlet activities on the whales. The Cook Inlet beluga whales are listed as endangered under the Endangered Species Act.

For a number of years Hilcorp has shown an interest in exploration in the waters of the lower Cook Inlet. In a 2017 lease sale the company acquired 14 leases in the inlet, southwest of Kachemak Bay. In 2019 the company conducted offshore 3D seismic surveying in the region, revealing a 65,000 acre, four-way closure with a previous oil discovery at the apex. And in 2021 the company conducted a geohazard survey in its lower Cook Inlet leases, presumably as a prelude to drilling in the leases. Access to an adequately sized jack-up drilling rig may be an impediment to drilling in the prospect.

--ALAN BAILEY