Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged BOEM, Cook Inlet, Gulf of America, OCS leasing, US Dept. of the Interior on August 19, 2025| Leave a Comment »
| Year | Cook Inlet Sale | Gulf of America Sales |
|---|---|---|
| 2025 | — | Dec. 10 |
| 2026 | March | March, August |
| 2027 | March | March, August |
| 2028 | March | March, August |
| 2029 | — | March, August |
| 2030 | March | March, August |
| 2031 | March | March, August |
| 2032 | March | March, August |
| 2033–2039 | — | March, August |
| 2040 | — | March |
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged Big Beautiful Bill, Cook Inlet, Gulf of America, litigation, offshore oil and gas leasing, royalty rates, sale requirements on May 23, 2025| Leave a Comment »
Part VIII, Offshore OIl and Gas Leasing, is a good read for those interested in OCS leasing policy. This cleverly crafted part of the bill specifies leasing schedules, streamlines the leasing process, and minimizes litigation risks. Highlights:
Posted in Alaska, Gulf of Mexico, Offshore Energy - General, tagged Cook Inlet, Gulf of Mexico, Lease Sale 257, Lease Sale 258, Lease Sale 259, litigation on May 5, 2023| Leave a Comment »
That would appear to be the case now that the US Court of Appeals for DC dismissed litigation challenging the sale.
Meanwhile, challenges to Cook Inlet Sale 258 (humble as it was with only one bid) and GoM Sale 259 continue. It’s a great country (if you like endless litigation)!
In addition to Lease Sale 257, the IRA also required Interior to offer three other lease sales in Alaska and the Gulf that it previously declined to hold. Lease Sale 258, in Alaska’s Cook Inlet, was held in December but received only one bid. Earthjustice is challenging that sale. Earthjustice is also challenging Lease Sale 259, in the Gulf of Mexico, which was held in March. Lease Sale 261, also in the Gulf, will be held by September of this year.
EarthJustice
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged Alaska, Cook Inlet, Inflation Reduction Act, Lease Sale 258, lease terms, royalty rate, Sale 244, Sale 256, Sale 257, Senator Manchin on March 9, 2023| Leave a Comment »
Senator Manchin and the Alaska delegation criticized the DOI decision memo for Sale 258. The memo implied that the highest allowable royalty rate was chosen to minimize bidder interest and limit future production. Unfortunately, the “Inflation Reduction Act,” which mandated these lease sales, was not particularly helpful in creating interest in the less attractive OCS tracts like those in the Cook Inlet and the shallower waters of the Gulf of Mexico.
Sec. 50261 of the IRA raised the minimum allowable royalty rate from 12 1/2% to 16 2/3%, while capping the maximum rate at 18 3/4%. This provision favors deepwater operators, typically majors and large independents, whose royalty rates were capped at 18 3/4%, the same rate as for previous OCS sales.
Conversely, the IRA royalty provisions penalize the smaller companies and gleaners who are critical to sustaining shallow water (shelf) operations, including environmentally favorable nonassociated (gas-well) natural gas production, by raising the minimum royalty rate to 16 2/3%. DOI exacerbated IRA’s impact by electing to charge the highest allowable royalty rate for Cook Inlet and GoM shelf leases. The net result was a 50% royalty rate increase from prior sales (12.5 to 18.75%).
The table below illustrates the royalty rate implications of the IRA language and the DOI decisions.
| Area | Sale | Date | % royalty: <200m water depth | % royalty: >200m water depth |
| Cook Inlet | 244 | 6/21/2017 | 12.5 | 12.5 |
| GoM | 256 | 11/18/2020 | 12.5 | 18.75 |
| GoM | 257 | 11/17/2021 | 12.5 | 18.75 |
| Cook Inlet | 258 | 12/30/2022 | 18.75 | 18.75 |
| GoM | 259 | 3/29/2023 | 18.75 | 18.75 |
Notes:
Posted in Alaska, energy policy, Offshore Energy - General, tagged 5 year leasing plan, Cook Inlet, Lease Sale 258, OCS Lands Act, royalty, Senate Energy and Natural Resources, Senator Manchin on March 6, 2023| Leave a Comment »
An internal memo from the U.S. Interior Department suggesting that the agency set the highest possible royalty fee on potential oil and gas development before last year’s Cook Inlet lease sale is drawing blowback from the Democratic chair of the Senate Energy and Natural Resources Committee.
West Virginia Sen. Joe Manchin said in a statement he was “appalled” by the memo, which he said was leaked and prioritized a “radical climate agenda” over the energy needs of Alaskans and the U.S.
Anchorage Daily News
From the decision memo:
While a 16 ⅔ percent royalty may be more likely to facilitate expeditious and orderly development of OCS resources and potentially offer greater energy security to residents of the State of Alaska, a reasonable balancing of the environmental and economic factors for the American public favors the maximum 18 ¾ percent royalty for Cook Inlet leases.
Sale 258 Decision Memo
The lower royalty rate probably would not have made much difference in the outcome of this sale, which only drew one bid, but the attitude expressed in the decision memo is rather disappointing given the Department’s mission, as expressed in the OCS Lands Act, to make resources available for expeditious and orderly development.
What might have made the sale more attractive was royalty suspensions, Option D.5.b (below). This would have been the best means of supporting the objectives of Senator Manchin, the other authors of the congressional leasing mandate, and the State of Alaska.
Option D.5.b: Offer Royalty Suspensions
Sale 258 Decision Memo
BOEM could offer royalty suspensions with the goal of making resources available for expeditious and orderly development. However, BOEM does not recommend royalty suspensions as the recommended lease term options are expected to balance the goals outlined earlier in this memo
Those who are concerned by the Sale 258 Decision Memo should be more troubled by the Proposed 5 Year Leasing Plan, most notably this stunning sentence which justifies the minimalist plan and signals a phasing out of offshore oil and gas leasing:
“The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.“
Posted in Alaska, Offshore Energy - General, tagged BOEM, Cook Inlet, Hilcorp Energy, Sale 258 on December 30, 2022| Leave a Comment »
Did they write this news release with a straight face? Almost a shutout (could still be if the only bid is rejected). And they need 3 hours to process the results! 😉
That said, good for Hilcorp! They have a vision, and I hope they are successful.
As directed by the Inflation Reduction Act (IRA) of 2022, BOEM held Cook Inlet OCS Oil & Gas Lease Sale 258 on Friday, Dec. 30.
The reading of the bids was conducted via livestream. The lease sale is now concluded. One bid was received on one block. The bid, in the amount of $63,983, was submitted by Hilcorp Alaska LLC.
Final sale results are currently being processed and will be posted to this page by 1 p.m. Alaska Time.
Following today’s sale, there will be a 90-day evaluation process to ensure the public receives fair market value before a lease is awarded, and a Department of Justice review of antitrust considerations. If a lease is awarded it will be posted to BOEM’s website when the review process is completed.
BOEM
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, BOEM, Cook Inlet, DOI, Gulf of Mexico on July 2, 2022| Leave a Comment »
Bud's Offshore Energy (BOE) 