Feds Try Again with Alaska Cook Inlet Lease

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

A lease sale off Alaska from earlier this year received zero bids. The Trump administration is nevertheless working to usher in something of an energy rival for the northern state.

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Cook Inlet Lease Set for March

The federal government is again trying to coax drillers into the Cook Inlet off the coast of Alaska after securing no bids earlier this year, though state leaders have been celebrating as of late.

The federal Marine Minerals Administration, formerly the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Performance, announced Friday it would make 1.05 million acres available for drillers in a proposed lease sale slated for March.

"Alaska remains central to America's energy future, and Cook Inlet is an important part of that opportunity," said Mike Olsen, the administration's acting director.

Industrial Info Resources is tracking more than a dozen projects in Alaska that are tied to the oil and gas sector that combine for a total investment value of nearly $17 billion. Among the largest is the Willow project, steered by ConocoPhillips.

Once completed in 2029, Willow will comprise a central processing facility with a capacity of 130,000 barrels per day (bpd). Readers can find out more in the detailed project report.

Federal data show Alaska ranks fourth in the nation in terms of proved crude oil reserves with 3.15 billion barrels, and sixth in terms of natural gas with more than 3.5 trillion cubic feet in reserves.

Crude oil production, however, peaked in the late 1980s at 2 million barrels per day (bpd). Over the week ending Oct. 2, production averaged only 489,000 bpd. Federal regulation calls for 30 leases in the Gulf of Mexico by 2040 and six in Alaska's Cook Inlet through 2032.

The first Cook Inlet lease offering from earlier this year saw 5.5 million acres put on the auction block. It received no bids at all.

But in March, Republican representatives in the state said Alaska marked its comeback with one of the best oil and gas lease sales ever in the National Petroleum Reserve-Alaska (NPR-A). High bids totaled $163 million for rights to drill across 1.3 million acres in the reserve.

Is Alaska on the Rebound?

By March, Australian energy company Santos and its consortium partners said they reached first oil from the Pikka development in Alaska, adding that around 80,000 bpd were expected by the third quarter.

Pikka is expected to help drive crude oil production in Alaska. The state's Department of Revenue said that Alaska could be producing close to 621,000 bpd by the 2030s. More gains are expected as early as 2029, when the Willow project and a handful of other smaller developments contribute to recent production estimates.

While oil is a shadow of its former self in Alaska, President Donald Trump last year singled out Alaska and its prospects to become a liquefied natural gas (LNG) exporter.

A division of Glenfarne is working on a facility that already has offtake commitments from Japan and steel-supply agreements from South Korea. The Alaska LNG development is meant to deliver natural gas from the North Slope to a planned liquefaction and export terminal in Nikiski, Alaska, which sits along the Cook Inlet near Anchorage.

If built as planned, it would have a design capacity of 20 million metric tons per annum (MTPA) of gas in the liquid form. It could be completed by 2032.

But while Alaska has seen momentum thanks in no small part to the Trump administration, developments from Pikka to Alaska LNG have been in the works for the better part of a decade, reaching back into Trump's first time in office from 2017-2021.

By the Numbers

• 1.05 million acres up for auction off Alaska
• Zero bids in the first lease from early 2026

Key Takeaways

• From LNG to oil, projects in Alaska are gaining momentum.
• But it's been a long road, with many projects on the books for more than a decade.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).