The Kenai Peninsula Borough supports proposed lease sales by the U.S. Minerals Management Service that would open roughly 2.2 million acres of lower Cook Inlet to oil and gas exploration.
Bill Popp, the borough's oil and gas liaison, told the Kenai Chamber of Commerce Wednesday that the proposed lease sales are vital to ensuring long-term economic stability on the peninsula.
"This is a very substantial potential resource to be developed," Popp told the chamber.
Popp said declining oil production in the inlet, coupled with diminishing natural gas reserves are starting to pinch the area's economy. It's the borough's hope that new discoveries in the southern part of the inlet will go a long way toward alleviating those shortfalls. Popp said the federal government estimates there is a 95 percent chance of 140 million barrels of oil and 190 billion cubic feet of natural gas being discovered in the lease area, and a 50 percent chance that 500 million barrels of oil and 1 trillion cubic feet of natural gas could be found.
The sales are scheduled for 2004 and 2006, and cover most of Cook Inlet from Kalgin Island south to Shuyak Island. If new discoveries are made, it's estimated exploration could begin in 2006, with production beginning around 2011.
If new reserves are found, Popp said it would mean more increased economic prosperity for the entire peninsula, especially in light of dwindling gas supplies in the area.
"Cook Inlet gas is extremely important to the economy of the Cook Inlet region and the state of Alaska," Popp said.
New development would not only mean local gas needs could be met, but that more jobs would be available for local workers.
"These are very high paying jobs and very important to our economy," Popp said.
There is opposition to the lease sales. Environmental groups and fishers have already voiced concern that new drilling could damage inlet sea lion, beluga whale and salmon populations.
Popp said the borough is sensitive to environmental concerns, and supports two alternatives that would remove around 300,000 acres near the Barren Islands and the southern tip of the peninsula from the sales.
"There absolutely positively has to be environmental protections during this process," Popp said.
In addition to removing sensitive areas from inclusion in the sales, Popp noted that more environment-friendly drilling platforms are being developed to limit potential damage to the environment.
"New drilling technologies are coming online all the time," he said.
He said the borough also supports provisions in the sales that ban tanker loading of oil from the platforms and call for minimal disturbance to fisheries.
"We don't want tankers bellying up to a platform in Cook Inlet," Popp said.
Although it's unknown how much -- if any -- oil and gas can be recovered from the sales, Popp said the important thing is that the process continues to move forward.
"Right now we're at step number one," he said.
The MMS is holding hearings to allow members of the public a chance to comment on the proposed sales.
A hearing will be held Saturday in Kenai from 11 a.m. until 1 p.m. at the Kenai Merit Inn. Public comment will be taken through Feb. 11, after which the MMS will decide whether or not to move forward with the sales.
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