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State drops beluga sensitive tracts from Cook Inlet lease sale Court denies Department of Natural Resources request that stay be lifted on 70 tracts, adds 56 tracts to ruling Kristen Nelson PNA News Editor
The state’s Aug. 16 Cook Inlet areawide oil and gas lease sale will be smaller than anticipated.
Natural Resources Commissioner John Shively said May 16 that he has withdrawn 126 tracts identified as important beluga whale habitat from oil and gas leasing in Cook Inlet after Judge Sigurd Murphy denied the state’s request to include the tracts in the sale. The judge had ordered 70 tracts withdrawn from the 1999 areawide Cook Inlet sale, and when the state requested that stay be lifted for the 2000 sale, the judge removed additional tracts from the sale.
“My staff worked intensively with the National Marine Fisheries Service to develop measures that would both protect the belugas and allow oil and gas development,” said Shively. “The measures were acceptable to NMFS. Nonetheless, as a result of litigation, our ability to offer these tracts has been stayed pending a final decision in the case.”
Shively said continued uncertainty with respect to the tracts would be harmful to industry, which might needlessly expend resources on tract evaluation, and would harm the state’s leasing program, which benefits from predictability.
His decision withdraws the tracts not only from the upcoming 2000 sale, but from the 1999 Cook Inlet sale that is the subject of current litigation.
Shively said he would include these tracts in future Cook Inlet sales only if a supplemental finding is made by his department that there is a plan in place to address concerns about beluga habitat.
Native hunters, oil and gas singled out “So far only Native hunters and the oil and gas industry have been singled out, which is unfair and without scientific justification,” Shively said. “It creates the false impression that curtailing these two activities will protect the whales.”
“I have not seen evidence that oil and gas activities are harming or contributing to the decline of beluga whales in Cook Inlet,” Shively said. “The Cook Inlet Regional Citizens Advisory Council conducted monitoring programs assessing the environmental impacts of oil industry operations in Cook Inlet from 1993 through 1997. That program, and other recent studies by the Environmental Protection Agency and the Minerals Management Service, indicate there is no evidence of contamination from oil industry activities in Cook Inlet.”
The protective measures that had been proposed by Shively and agreed to by NMFS would have required the Director of the Division of Oil and gas to consider the most recent information on beluga abundance, distribution, and behavior, and to consult with NMFS, before allowing drilling or development on the offshore portion of tracts important to belugas.
Two tracts formerly in the North Middle Ground Shoal unit have also with withdrawn from the sale because of litigation between the state and Dan Donkel, a former overriding royalty interest holder in a single lease which included both tracts.
Stay expanded to 123 tracts May 1 In a May 1 decision, Superior Court Judge Sigurd Murphy denied the state’s motion to lift the 70-tract stay he ordered in April 1999 and expanded the stay to 123 tracts.
Murphy said his 1999 order “held that the ‘balance of hardships’ test justified staying the sale of 70 tracts in the proposed 1999 Cook Inlet Areawide Oil and Gas Lease Sale because the potential environmental harms to the Cook Inlet beluga whale population outweighed the possible adverse financial effects tot he State.” Murphy said the state has not shown that the balance has shifted in its favor, so the motion to lift the stay is denied.
The judge noted in his May 1 ruling that the state Department of Natural Resources had expanded its dialogue with the National Marine Fisheries Service over the past year “to obtain a better understanding of that agency’s concerns regarding the Cook Inlet beluga whale population and potential adverse effects of the proposed oil lease sale.” As a result, he said, DNR has proposed mitigation measure 26 requiring consultation with the National Marine Fisheries Service before offshore exploratory drilling operations and offshore production facilities are authorized.
Murphy noted that the 1999 stay required DNR “to closely scrutinize the possible effects of the lease sale in its preliminary stages, not during the permitting process.”
DNR must accept NMFS concerns In expanding his 1999 stay of 70 tracts to 126 tracts, the judge noted that because DNR has recognized the expertise of the National Marine Fisheries Service in regard to belugas, it cannot ignore the agency’s concerns or recommendations — and NMFS, he said, has identified an additional 56 tracts “as sensitive to the Cook Inlet beluga whale population.”
If the 126 “tracts are offered to the public for sale before this appeal is concluded,” the judge said, “the DNR shall notify this court of that proposed offering, at which time the court shall conduct a hearing to determine if the sale should be stayed, based on the circumstances at that time.”
Murphy also said that while DNR is “only required to make findings based on available information” that “did not, however, suggest that the Department should not be proactive in gathering and assessing all pertinent scientific data.”
Sale terms The bidding method for the sale will be cash bonus bidding with a minimum bid of $5 per acre. Leases will have an initial primary term of seven years and a fixed royalty rate of 12.5 percent. Annual rental will be $1 an acre for the first year; $1.50 an acre for the second year; $2 an acre for the third year; $2.50 an acre for the fourth year; $3 an acre for the fifth and following years.
The sale will be held beginning at 8:30 a.m. on Aug. 16 at the Loussac Public Library in Anchorage. Bids will be received only from 9 a.m. to 4 p.m. on Aug. 14 at the Division of Oil and Gas offices in Anchorage.
Mitigation measures and lessee advisories have been revised since publication of the final best interest finding for Cook Inlet areawide sale 1999. The introduction of the measures clarifies that if units are formed with leases issued under different mitigation measures, the most recent measures will most likely be applied to the whole unit. Lease terms will be imposed through approval of plans of operations or exploration and development and other permits.
The Division of Oil and Gas will review and approve plans of operations.
Tract map available The division has prepared an official tract map with the location of all 815 tracts within the 4.2 million acre sale area. Only lands within the sale area not covered by existing leases as of April 3 will be considered available for leasing in the 2000 sale. Tracts range in size from 640 to 23,040 acres.
The exact amount of the net leasable acreage in each tract will not be determined until after the bids are received. At that time the division will complete a comprehensive evaluation of the lands within the tracts that received bids to determine which lands are available for lease. Acreage not owned by the state, already subject to an oil or gas lease or clouded by title claims will be excluded from the tract area.
Printed versions of the map are available free. Contact Suzanne Gaguzis at the Division of Oil and Gas, 550 West 7th Ave., Suite 800, Anchorage AK 99501; phone 907-269-8803; e-mail [email protected].
A CD-ROM version in PDF format is available for $50 plus $3.50 postage from the State of Alaska, Support Services, Land Record Information Section, 3601 C Street, Suite 916, Anchorage AK 99503-5936. Fax 907-563-1497; e-mail [email protected]. Phone Joyce Zeller at 907-269-8833.
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