Lease sales offer hope for economy

Posted: Friday, January 24, 2003

Central Kenai Peninsula residents should take advantage of the opportunity to support two proposed oil and gas lease sales during a public hearing scheduled for Saturday from 11 a.m. to 1 p.m. at the Kenai Merit Inn.

With recent news about workers losing jobs in the oil and gas industry, platforms being shut down, a major

retailer leaving the area and natural gas being in short

supply, the proposed sales -- sale 191 is scheduled for 2004 and sale 199 is scheduled for 2006 -- offer more than a glimmer of economic hope for the Kenai Peninsula Borough.

Indeed, based on 140 million barrels of oil recovered, the federal Minerals Management Service estimates the borough stands to gain an average of $2.8 million per year in property taxes over 15 years from oil and gas development resulting from the sales. Based on one offshore platform producing 140 million barrels of oil, the MMS estimates that sale 191 would generate as many as 400 direct jobs and 200 indirect jobs.

Plus, new reserves of natural gas would go a long way toward easing some of the borough's current worries about what will happen to some of its major industries and residents' quality of life without more gas.

The proposed sale area includes about 2.5 million acres of Cook Inlet -- from just south of Kalgin Island to just south of the Barren Islands and north of the entrance to Shelikof Strait. The MMS has proposed withdrawing areas from the lease sales off the southern coast of the peninsula and around the Barren Islands. Habitat and subsistence concerns, as well as the lack of oil and gas potential in those areas, mean the withdrawals make sense.

While oil and gas activities have been an integral part of upper Cook Inlet for more than four decades now, the same isn't true of the lower inlet. It's natural that southern peninsula residents would worry about making sure sensitive habitat and a diverse range of fish and wildlife are protected.

The fact is, however, nothing -- including getting out of bed in the morning -- is without risks. Nothing can guarantee there will never be a spill. However, much can be done to minimize the risks of spills and environmental damage. The proof is evidenced in upper Cook Inlet.

Officials from the Kenai Peninsula, Kodiak and Lake and Peninsula boroughs, which all stand to be impacted by the sales, asked that five key issues be addressed by the MMS to reduce the risks associated with the sales, including:

That there be no offshore loading of tankers;

That there be specific plans to minimize and avoid commercial fishing gear conflicts with the exploration and development of oil;

That oil exploration companies have adequate spill prevention and response capability;

That critical habitat areas be identified;

That there be a provision for local government revenue sharing.

Although the latter would take an act of Congress, Kenai Peninsula Borough officials believe that to the extent it can, the MMS has met the three boroughs' concerns in its draft environmental impact statement on the proposed lease sales.

Residents have the opportunity to learn more about and voice their support for the proposed lease sales on Saturday. These leases offer hope for the continued growth and health of the borough's economy with minimal risk to the environment we all cherish.

Written comments on the draft environmental statement for the two lease sales will be accepted until Feb. 11. They can be sent to MMS Alaska OCS Region, 949 E. 36th Ave., Room 308, Anchorage, AK 99508-4363. Comments also may be e-mailed to

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