Lease sales in Cook Inlet have drawn virtually zero interest from oil and gas companies, despite President Donald Trump's promise to "drill, baby, drill." A federal oil and gas auction in Cook Inlet generated zero offers from bidders on Wednesday, while an Alaska oil and gas lease sale in the near-shore state waters of the Inlet generated just one small bid for a single tract. Conservation groups celebrated the federal goose egg, arguing that it shows the oil industry has little interest in exploring the waters off the Kenai Peninsula, even as Southcentral Alaska faces a looming shortage of natural gas from the Inlet. State and federal lease sales in the Inlet have been duds for years, with limited bidding. Trump's One Big Beautiful Bill Act mandated at least six lease sales in Cook Inlet through 2032, but the planned sales have been criticized by conservation groups and an Alaska tribal government, the Chickaloon Village Traditional Council, who have filed a lawsuit over the federal auction. The groups argue that the Trump administration held the sale without evaluating the possible harm from potential oil and gas production to the endangered Cook Inlet beluga whale, the northern sea otter, Steller’s eider, and other species protected under federal law. The Cook Inlet basin was once Alaska’s major oil and gas region, but a long decline in natural gas production has led to a supply gap, with utilities in Southcentral Alaska scrambling to find new sources of energy. The weak lease sales come as utilities are looking to use imported liquefied natural gas, or LNG, from outside Alaska as early as next year. Hilcorp, the top gas producer in the region, warned utilities in 2022 that it cannot guarantee gas supply after contracts end, including for Chugach Electric Association in 2028 and Enstar Natural Gas in 2033. Alaska lawmakers and regulators have questioned the need for two gas import facilities in Southcentral Alaska. In the state lease sale, 2.9 million acres of state-owned land in more than 700 tracts were offered, but only Three Mountain Oil, owned by Jim Winegarner, bid $600 for 20 acres in an area west of Anchor Point. Winegarner is hopeful he can participate in future development at Seaview, but he hasn't yet talked to Hilcorp. John Hendrix, who owns Furie, an Inlet gas producer, said his company did not bid on Wednesday in part because it is focused on existing prospects in the Inlet. The company has said it hopes to drill two to three wells in the Inlet this year to bring on additional production. It also has signed a five-year contract to provide gas to Enstar through 2031.
