Natural gas prime target of lease sales

Cook Inlet Keeper prepares to fight effort; federal agency schedules several hearings

Posted: Sunday, January 12, 2003

Two federal oil and gas lease sales proposed for the Outer Continental Shelf waters of lower Cook Inlet and Shelikof Strait in 2004 and 2006 would expose sensitive fish and wildlife habitat to the threat of pollution, said the head of the Homer-based Cook Inlet Keeper, an organization lining up to fight the effort to open the area to exploration.

But the Minerals Management Service, which would seek bids on 2.5 million acres, says the prime target is natural gas. If gas is discovered and developed, the danger of an oil spill virtually goes away, said Robin Cacy, public affairs officer with the MMS in Anchorage.

A battery of public hearings has been scheduled beginning Thursday to gather public opinion on the sales. They are as follows:

Thursday: From 4 to 6:30 p.m. at the MMS Regional Office in Anchorage.

Jan. 21: From 7 to 9 p.m. at the Seldovia Community Center.

Jan. 23: From 7 to 9 p.m. at Homer City Hall.

Jan. 24: From 7 to 9 p.m. at the Kenai Merit Inn.

Jan. 28: From 4 to 6:30 p.m. a teleconference; 1-(800)-764-2627.

These are the first such sales proposed for Cook Inlet and Shelikof Strait by the MMS since the controversial Lease Sale 149 in 1996, which drew significant public protest, especially on the lower Kenai Peninsula. That sale was later reduced from its original 1.98 million acres, and once held, drew bids on only 2,000 acres.

The latest sales, Lease Sales 191 and 199, would offer about 26 percent more territory than did Lease Sale 149. About 2.5 million acres are proposed to be leased, including tracts just beyond the mouth of Kachemak Bay, as well as across Kennedy and Stevenson Entrances near the Barren Islands. Both sales are covered under a single draft environmental impact statement.

Bob Shavelson, head of the Cook Inlet Keeper, said the wilderness waters of Cook Inlet have been called "the biological engine" of the Gulf of Alaska, supporting "a diverse range of fish and wildlife species including brown bear, migratory birds, sea lions, whales and all five species of wild Pacific salmon."

He said the area is valued for its productivity and noted that the inlet and the strait border five national wildlife refuges, four national parks and several state game refuges and a critical habitat area.

Shavelson said that while the proposed lease sale area is significantly larger than in 1996, the latest draft impact statement downgrades the estimated risk of an oil spill below that of Lease Sale 149.

An oil-spill risk analysis released by the MMS reads, "There is an estimated 19-percent probability that one or more spills greater than or equal to1,000 barrels (of oil) may occur as a result of this action (leasing acreage that later produces oil)."

In 1996, the risk was set at 27 percent, derived from a so-called "base case" level of production of 100 million to 300 million barrels of oil. In 1996, the "worst-case" estimate of the risk of an oil spill was better than 75 percent.

But the current draft EIS estimates less production -- about 140 million barrels -- and thus, fewer environmental impacts. It also means fewer jobs. According to Shavelson, MMS has said no new jobs can be expected from production in the area.

The devil is in the details, Shavelson said. The draft EIS still pegs the risk that a spill will occur sometime during the 30-year expected production life span at nearly one in five.

"That's a large spill on average of once every five years for seven-days worth of oil at the nation's current consumption rate," he said. "So with fewer workers overseeing operations and spill prevention, MMS has downgraded the risk of a large spill -- with virtually no justification," he said.

Cacy said the MMS is only in the beginning of the public process leading toward the sale in 2004.

"The area in the draft EIS won't necessarily be what is offered," she said. "It could be a significantly smaller area. There could be all kinds of changes between now and when, and if, we proceed with the sale."

The area under consideration begins from just south of Kalgin Island and runs south just beyond Shuyak Island. Two areas within the sale area are considered "deferral options" that could be included or removed. They include roughly 30 tracts north and west of the Barren Islands and about 32 more tracts stretching from east of Elizabeth Island to roughly the middle of the mouth of Kachemak Bay almost due west of the tip of the Homer Spit.

Cacy said that while exploration companies that may drill in the region aren't likely to ignore significant pockets of oil if found, they're more likely to be looking for natural gas.

"Cook Inlet is an area that is gas prone," she said. "The demand for natural gas in Southcentral Alaska is growing at such a rate that companies are interested in looking for recoverable natural gas for use in Southcentral."

Some estimates suggest this area will be out of gas within one to three decades.

Gas, she said, is "a different critter" when one is considering the possible impacts of exploration and production.

"You don't have natural gas spills. There is a whole different set of issues for natural gas."

Gas may be the prime objective, but environmental impact statements take into consideration the production of oil when analyzing risks and impacts. The risk analysis considered possible spills during production and transportation of product.

Cacy said she did not know if permit requirements would be stiffened if a company searching for gas found sufficient oil and wanted to develop it. She said she would find out before the public hearings.

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