Murkowski Slams Interior for Deliberately Cutting Cook Inlet Gas Production

Leaves Hundreds of Thousands of Alaskans to Face Higher Energy Prices, Threatens Regional Energy Shortages, Harms National Security

Senator Lisa Murkowski (R-Alaska) today issued the following statement after reviewing an internal memo on Cook Inlet Lease Sale 258 that the Department of the Interior briefly posted online before quickly removing from public view. The memo, which was obtained by the office of Senator Joe Manchin (D-West Virginia), outlines the administration’s efforts to undermine recent federal law and reduce natural gas production in Cook Inlet, Alaska.

“This is a stunning document, and it details how the administration explicitly sought to reduce natural gas production in Cook Inlet. The administration did this despite rising regional electricity prices, despite producers warning local utilities not to count on continued gas delivery at the end of current contracts, and despite the likelihood of energy shortages that force us to import LNG. Despite being fully aware of all of that, Interior imposed conditions on a statutorily mandated lease sale that they knew would result in fewer bids and less production,” Murkowski said. “This document helps explain why the administration initially canceled this lease sale, and why they have resisted the development of a new Five-Year Plan. It shows a policy of working against domestic production, rather than promoting it. This administration may never feel the consequences, but Alaskans sure will, and that is completely unacceptable.”

Clean-burning natural gas from Cook Inlet provides power generation for Southcentral Alaska, home to over half the state’s population. Joint Base Elmendorf Richardson (JBER), which hosts the Alaska NORAD Region, F-22s, AWACS, C-17s, and the 11th Airborne, relies on Cook Inlet gas for heat and power.

“The Department is also weakening our nation’s defense posture in the Arctic and the Pacific by intentionally cutting Cook Inlet gas production,” Murkowski said.

The administration abruptly canceled Lease Sale 258 in May 2022 despite industry’s expressed interest in new leases. Senator Manchin restored it through the Inflation Reduction Act, which required Interior to reschedule and hold the lease sale by the end of last year.

Interior’s memo features a series of recommendations that were ultimately included in Lease Sale 258, including a maximum royalty of 18.75%. The memo notes that, “A lower royalty of 16 2⁄3 would also be expected to incentivize additional blocks receiving bids, increase bonus bids, and increase the chances of a discovery being developed. If a Cook Inlet prospect would be developed, there would be additional government revenues and greater energy security for the State of Alaska, especially if development of natural gas resources in the Cook Inlet ameliorated the long-term supply challenges facing the Anchorage area. Nevertheless, because of the serious challenges facing the Nation from climate change and the impact of GHGs from fossil fuels, BOEM is not recommending this option since it would not include an appropriate surcharge to account for those impacts.”

The memo is available here.