Advertisement

Alaska critical to U.S. energy strategy, federal government says

One company submitted about $3 million in high bids for access to federal waters in the Cook Inlet.

By Daniel J. Graeber
Alaska critical to U.S. energy strategy, federal government says
Only one company earned high-bidder honors for a lease for drilling opportunities off the southern Alaska coast, but federal government declares a win under a broader energy strategy. File by Kyle Waters/Shutterstock

June 22 (UPI) -- An estimated $3 million in high bids from an energy company looking to tap southern Alaskan waters is critical to U.S. interests, the federal government said.

The U.S. Interior Department's Bureau of Ocean Energy Management said Hilcorp Alaska LLC was the lone high-bidder for a lease sale in the federal waters of the Cook Inlet off the state's southern coast. The lease, the first in nearly a decade, brought in $3 million in high bids from the company.

Advertisement

Alaska is on the brink of a credit downgrade because the lack of a budget for fiscal year 2018. Walter Cruickshank, the acting director for the BOEM, said the lease could help stimulate energy development in Alaska, while advancing U.S. President Donald Trump's agenda to push the oil and gas sector into dominance.

"Expanded oil and gas production is critical to America's economic and energy security, as we move to strengthen the Nation's energy independence in accordance with the administration's goals," he said in a statement.

RELATED Trump's offshore drilling order legal, backers say

A 2011 study from the U.S. Geological Survey put the reserve estimate at a mean 599 million barrels of oil and a mean 19 trillion cubic feet of natural gas for technically recoverable undiscovered resources onshore and in state waters that are part of the Cook Inlet.

Advertisement

The region hosts three active refineries and a gas storage facility. Environmental groups have expressed concern that oil and gas activity would threaten the marine ecosystem but the state in 2005 found safeguards were in place to help preserve the region's pristine environment.

The Trump administration has signaled it would include parts of Alaska above the Arctic Circle in its broader lease plan. Trustees for Alaska, a conservation group, said the federal government was disregarding the interests of "all the other Alaskans and Americans" keen on protecting sensitive areas against oil and gas interests.

RELATED Market may be ripe for U.S. offshore oil and gas bids

The BOEM said the lease terms include measures to "avoid potential conflicts associated with oil and gas development in the region."

The last lease in the Gulf of Mexico secured nearly $275 million in high bids.

RELATED U.S. offshore regulator joins solar power trade group

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement