A proposal that would have opened more than 1 million acres of Cook Inlet to oil and gas development was canceled Wednesday by President Joe Biden. The U.S. Department of the Interior cited a “lack of industry interest” in the area and similarly canceled lease sales in the Gulf of Mexico region, the Associated Press reported Thursday.

The proposed Lease Sale 258 included about 224 blocks covering more than 1 million acres of seafloor between Kalgin Island in the north and Augustine Island in the south.

The sale, which was delayed last year after President Joe Biden paused new oil and gas leasing, would have provided “qualified bidders with the opportunity to bid on OCS lease blocks in Cook Inlet to gain conditional rights to explore for, develop, and produce oil and natural gas,” according to the Bureau of Ocean Energy Management.

A draft environmental impact statement published by the agency last October found that the sale’s potential impact on living things in the area would be largely contingent on whether a large spill occurs. BOEM classifies impacts as negligible, minor, moderate or major.

The impact of the sale on coastal and estuarine habitats, fish, birds, marine mammals and terrestrial mammals was expected to be minor, unless a large oil spill occurred, the environmental statement asserted. In the event of a large oil spill, the statement said, the impact would jump to moderate for fish and marine mammals, and to major for coastal and estuarine habitats and birds.

For the purposes of their analysis of the lease sale, BOEM assumed a 19% chance of one or more large oil spills occurring during 32 years of oil and gas production, the statement said.

Cook InletKeeper, a peninsula-based environmental advocacy group, has long opposed the sale. The group’s Community Action Studio in Soldotna last year held an art sale called “ART Sale 258,” which was intended to raise awareness about the potential lease sale.

In organizing the sale, the group cited their concerns about the impact the lease sale would have on salmon and halibut fishing grounds and on Cook Inlet beluga whales. The art sale made available a set of 4×6 cards featuring the work of local artists to people who donated $25.80.

Gov. Mike Dunleavy in social media posts Thursday criticized the lease cancellation, calling it another example of the Biden administration’s “lack of commitment” to domestic oil and gas production. Dunleavy has long criticized Biden’s efforts to halt development in Alaska.

“Gas prices are still hitting new highs and the Biden administration halts the potential to drill for oil in over 1 million acres in Cook Inlet,” Dunleavy wrote.

As reported by the Associated Press, the lease cancellations come amid record gas prices caused by the war in Ukraine and other disruptions: Gas is currently going for $4.40 a gallon, which is about $1.40 higher than a year ago. The same story said that oil companies have increased production as the economy recovers from the COVID-19 pandemic, but some companies remain reluctant to further expand operations citing worker shortages and other problems.

Both U.S. Senators Lisa Murkowski and Dan Sullivan condemned Thursday the sale’s cancellation and criticized Biden putting “more of our nation’s energy reserves off-limits.” Both senators also pushed back on the claim that there was no industry interest in the sale.

“I can say with full certainty, based on conversations as recently as last night, that Alaska’s industry does have interest in lease sales in Cook Inlet,” Murkowski said in a statement. “To claim otherwise is simply false, not to mention stunningly short-sighted. The Biden administration needs to recognize how this decision is going to hurt Alaskans, reverse it immediately, and get the federal oil and gas program back on track now.”

President and CEO of the Alaska Oil and Gas Association Kara Moriarty in a statement alongside the Senators called the decision “disappointing at best.”

“At a time when Alaskans and the American public desire energy independence, today’s announcement sends a clear message of just the opposite,” Moriarty wrote.

Cook Inletkeeper Advocacy Director Liz Mering said Thursday that she was “really excited” to learn that the sale had been canceled, calling the move a win for the southern peninsula’s economy. More than 93,000 public comments were submitted about the sale, 99.8% of which opposed the sale, Mering said.

Cook Inletkeeper took particular issue with BOEM’s assumption of a 19% chance that one or more large oil spills would occur during 32 years of production. On top of the risk posed to Cook Inlet wildlife, Mering said the infrastructure required for development would interfere with existing industries such as tourism and commercial fishing.

“It really does unify lower Cook Inlet,” Mering said of opposition to the sale.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

Placards display information and prices for art pieces up for auction as part of "ART Sale 258" at the Cook Inletkeeper Community Action Studio on Thursday, Dec. 9, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)