The Marine Minerals Administration announced plans for an offshore oil and gas lease sale in federal waters of Alaska’s Cook Inlet scheduled for next March. The auction will offer 1 million acres of territory for exploration rights, marking the second attempt to monetize these resources under a new legislative mandate.
Legislative Mandate Drives Auction
The upcoming event, designated as Big Beautiful Cook Inlet 2 (BBC2), is required by the “One Big Beautiful Bill Act” passed last year. The legislation mandates at least six oil and gas lease sales in the Cook Inlet through 2032. This follows the first sale, named Big Beautiful Cook Inlet 1 (BBC1), which was held in March of this year but drew no bids from energy companies.
A simultaneous state lease sale held during the BBC1 event attracted only a single bid. Mike Olsen, acting director of the MMA, confirmed the schedule for the next auction. The agency oversees federal offshore energy development and safety enforcement.
Regulatory Restructuring
The MMA was created in July by U.S. Department of the Interior Secretary Doug Burgum, who issued an order on July 10 to reunite two previously separated bureaus. This action reverses a structural change implemented by the Obama administration following the 2010 Deepwater Horizon disaster, which killed 11 people.
Under the previous structure, the Bureau of Ocean Energy Management handled leasing while the Bureau of Safety and Environmental Enforcement managed oversight. The new MMA combines these functions into a single entity, consolidating regulatory authority over offshore energy operations.
Historical Lack of Interest
Industry participation in federal Cook Inlet leases has been minimal for years. The previous federal lease sale, held at the end of 2022 under a congressional mandate, drew only one bid. Federal sales in 2007, 2009, and 2011 were canceled due to lack of interest, and a 2004 sale received no bids.
Hilcorp, once the dominant oil and gas operator in the Cook Inlet basin, relinquished all eight of its federal leases in September. Seven of those leases were acquired in a 2017 sale, and one was acquired in the 2022 sale. Currently, there are no active federal leases in Cook Inlet waters.
Environmental Opposition
Environmental groups have criticized the upcoming sale. Hannah Foster, an attorney with Earthjustice, stated that the auction is a waste of time, noting that the March sale received zero bids. Cooper Freeman, Alaska director of the Center for Biological Diversity, also voiced opposition to the continued leasing efforts.
The Cook Inlet basin is Alaska’s oldest oil and gas producing region, having produced oil since the 1950s and natural gas since the early 1960s. While Hilcorp and other companies continue to operate in state territory within the basin, the federal side of the inlet has seen little activity.
Broader Leasing Plan
The Trump administration’s proposed five-year leasing plan calls for 21 lease sales in waters around Alaska, including remote sites like the Bering Strait region. The outcome of the BBC2 sale could influence future leasing strategies for other Alaskan waters included in the broader plan.