Alaska offshore oil lease sale nets just one bid after being revived by Inflation Reduction Act
An offshore drilling auction off the southern Alaska coast netted little interest after it was revived by the Inflation Reduction Act.
Just one company bid on the chance to drill on just one tract out of 193 that were offered up for lease in Alaska’s Cook Inlet. The Interior Department was compelled to hold the auction by the Inflation Reduction Act after previously canceling the sale due to lack of industry interest.
The provision was included in the Democrats’ climate, tax and health care bill to secure the support of Sen. Joe Manchin (D-W.Va.).
Kristen Monsell, oceans legal director at the Center for Biological Diversity, which opposed the sale, described it as a “flop.”
The one bid came from Hilcorp Alaska and was for $63,983. It comes at a time when Interior is weighing the future of its offshore leasing program.
The department said that it would hold between zero and 11 offshore oil and gas lease sales between 2023 and 2028.
That plan, however, came before the Inflation Reduction Act, which strengthened the prospects for at least a few lease sales.
Additional provisions in the law — likely included to get Manchin’s backing — required the reinstatement of the results of a past Gulf of Mexico lease sale that was previously struck down in court and two additional lease sales in the Gulf of Mexico.
The law also ties the future of renewables to that of fossil fuel development, requiring the federal government to hold oil and gas lease sales as a condition for selling leases for renewable energy production on public lands and waters.
Monsell, whose organization is one of several environmental groups suing over lease sale 258, said that despite the fact that only one block received a bid, her organization will continue to challenge it in court.
“One lease on one block is one lease too many,” she said.
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