More state-owned land in Cook Inlet will be opened to oil and gas production following the successful sale of inlet leases to at least three companies, the state announced Wednesday.
Furie Operating Alaska, LLC, HEX, LLC and Strong Energy Resources, LLC were all identified as bidders by the Alaska Department of Natural Resources on Wednesday. In all, the three companies’ eight bids cover just over 21,000 acres in Cook Inlet and total about $450,000 in bonus bids. Strong Energy Resources is a new entrant in the Cook Inlet Region, according to DNR.
HEX, LLC will acquire about 5,700 acres across two state parcels north of Nikiski. Furie Operating Alaska, LLC will acquire about 14,000 acres across five state parcels from about Nikiski to Anchor Point. Strong Energy Resources, LLC will acquire about 1,500 acres across one state parcel near Anchor Point. All companies are considered competitors of Hilcorp, which has the largest oil and gas development presence in Cook Inlet.
Lands are offered by the Alaska Department of Natural Resources’ Division of Oil and Gas’ Alaska Peninsula Areawide APA and Cook Inlet Areawide (CIA) Competitive Oil and Gas Lease Sales. The statewide lease sale included about 5 million acres of state land in just over 1,000 tracts, while the Cook Inlet sale included about 3.3 million acres of state land in about 833 tracts. Cook Inlet tracts ranged in size from 640 to 5,760 acres.
“Natural gas from Cook Inlet plays an important role in keeping Alaskans’ homes and businesses warm, and keeping Alaskans employed and productive,” Gov. Mike Dunleavy is quoted as saying in the DNR release. “The success of this lease sale demonstrates the continued contribution of the energy industry to Alaska’s economy and way of life.”
According to the U.S. Department of the Interior’s Bureau of Land Management (BLM), the Cook Inlet basin is Alaska’s oldest producing oil and gas basin, with production peaking in the 1970s at about 230,000 barrels per day. That figure is now at about 18,000 barrels per day.
The sale of oil and gas leases on state land is in addition to federal efforts to conduct similar lease sales in Cook Inlet’s federally managed waters. That process, initiated under former President Donald Trump’s administration, was halted earlier this year following President Joe Biden’s issuance of Executive Order 14008, “Tackling the Climate Crisis at Home and Abroad,” which paused new oil and gas leases on public lands or in offshore waters.
The federal government also owns oil and gas lease tracts in Cook Inlet in federally controlled waters, south of Kalgin Island. The 2021 Cook Inlet lease sale was included by the U.S. Secretary of the Interior in the 2017-2022 National OCS Oil and Gas Lasing Proposed Final Program.
Efforts by the state to further develop oil and gas operations in the inlet come as Homer Electric Association announced plans to collaborate with Ocean Renewable Power Company, Inc. to harness Cook Inlet’s tidal energy. In a May 26 release, HEA said that ORPC submitted a preliminary permit application to the Federal Energy Regulatory Commission, with a goal of ultimately installing a tidal energy project at East Foreland in the inlet. HEA would sell the tidal energy produced by the project.
More information on the sale of Cook Inlet’s oil and gas leases can be found on DNR’s Division of Oil and Gas website at dog.dnr.alaska.gov.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
