KENAI (AP) -- 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 on 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 said.
The sales ran into opposition in Homer on Thursday. KTUU-TV reported more than a hundred people spoke at an MMS hearing and most said they were opposed to exploration.
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.
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, Popp said, 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 more jobs would be available for local workers.
''These are very high paying jobs and very important to our economy,'' Popp said.
Environmental groups and fishermen have said 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.
Also, more environment-friendly drilling platforms are being developed to limit potential damage to the environment, he said.
MMS regional director John Goll told the Peninsula Clarion on Thursday that certain tracts near the mouth of Kachemak Bay and around the Barren Islands eventually could be removed from the lease sale scheduled for 2004.
He said tracts just outside Kachemak Bay and extending south around the western side of the Barren Islands also could be cut from the sale.
The decision to remove tracts will be made about a year from now, either by Interior Secretary Gale Norton or her designee, Goll said.
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