Lower Cook Inlet oil leases advance

Residents of Anchor Point, Homer and Seldovia could see drilling rigs off their coasts in the future if the federal Department of the Interior gives it the green light.

The Bureau of Ocean Energy Management, the federal agency that oversees offshore drilling on the Outer Continental Shelf, has issued a draft environmental impact statement for oil and gas exploratory leases in Lower Cook Inlet. The proposed leasing area stretches from approximately Ninilchik to just north of Augustine Island, not including Kachemak Bay.

The state oversees oil and gas leases on lands within 3 nautical miles of shore, and the federal government has jurisdiction on lands past that. There are currently no rigs in Alaska in federal waters, said John Callahan, a spokesman for the Bureau of Ocean Energy Management.

The bureau has been looking at expanding area available for leases into Lower Cook Inlet since March 2012, when it asked industry members about their interest in oil and gas exploration offshore in Cook Inlet, according to a news release from BOEM. In the determination process, the bureau used scientific data and stakeholder feedback to plan an area for potential lease sales, holding public meetings in Anchorage, Soldotna, Homer, Seldovia and Nanwalek in November 2014.

The area proposed in the draft EIS is close to existing leases, avoids critical habitat areas for endangered species in the area and excludes much of the subsistence area for Nanwalek, Port Graham and Seldovia, which the Alaska Native villages requested, according to the news release.

The publishing of the draft does not set the lease sale in stone — the Department of the Interior would still have to approve it.

A number of public meetings have also been scheduled: meetings will take place at the Dena’ina Center in Anchorage on Aug. 15, in Homer at the Alaska Maritime National Wildlife Refuge Islands and Ocean Visitor Center at on Aug. 17 and in Kenai at the Alaska National Guard Federal Armory on Aug. 18. All the meetings run from 5 p.m. to 8 p.m., according to the news release.

“BOEM has been and will remain in close coordination with the state of Alaska, as well as with the local communities, Alaska Native tribal governments and other stakeholders throughout this process,” the news release states.

Industry conditions have changed since 2012 — an extended period of lower oil prices have led to a number of producers scaling back operations or leaving Alaska. Callahan said the market conditions will change, but setting up the regulatory structure for the leasing area means the sale can take place in the future, even if it isn’t soon.

The purpose of the public meetings is to gather feedback on the draft, take that feedback back to BOEM and correct any perceived errors before turning the final draft into the Department of the Interior for a final decision on the lease sale, Callahan said. Public comment will remain open until Sept. 6.

“The main message we want to get out to people is that we want your input,” Callahan said. “What is interesting to us at this stage in the process is getting the broadest range of perspectives possible.”

The draft environmental impact statement includes analyses of the possible effects of oil and gas work in that area on wildlife, shipping traffic and fishing and proposes six different alternatives based on public comments.

Four of the alternative plans offered in the environmental impact statement alter the location of the lease. One would shift the space to accommodate passage for Cook Inlet beluga whales, which are listed as endangered and managed by the National Oceanic and Atmospheric Administration. Another would either remove or add conditions to the inclusion of areas known to be northern sea otter critical habitat.

If the plan goes forward unaltered, it includes some space that is frequented by commercial drift gillnet fishermen. Many of Upper Cook Inlet’s drift gillnet fishermen operate from a line near Anchor Point north, and the area proposed in the draft environmental impact statement stretches north from Anchor Point to Ninilchik. One alternative proposed would add stipulations to the area north of Anchor Point, about 40 percent of the proposed area, to avoid conflicts with drift fishermen.

Some of the stipulations include not conducting seismic surveys during the drifting season and staying in touch with the United Cook Inlet Drift Association.

“…Mitigation in this alternative focuses on timing restrictions for certain activities to prevent or reduce the potential for interactions with drift gillnetting vessels,” the draft states. “The potential for impacts would also be reduced by requiring lessees to notify the local drift gillnet fishing organization (UCIDA) of any temporary or permanent structures planned during the drift gillnetting season and by encouraging lessees to coordinate with UCIDA to avoid conflicts.”

A final alternative would permanently ban lessees from discharging drilling fluid and cuttings into that area of Cook Inlet.

To operate, oil and natural gas producers have to apply for a discharge permit from the Alaska Department of Environmental Conservation for waste from drilling in the ocean floor and potential inadvertent spills. While the most recent state permit prohibits drilling discharges from all new facilities anyway, the alternative would ban them regardless of changes in future permits, according to the draft.

Potential lessees would have to agree to any stipulations BOEM sets onto the leases before signing, Callahan said in an email.

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.