Alaska environmentalists disappointed by Inflation Reduction Act compromise

The bill includes historic investments in climate programs — and expands oil and gas leasing in Alaska’s Cook Inlet.


On a recent August evening, Marissa Wilson watched the sun set over Iliamna Volcano as she fished for halibut in Kachemak Bay, an arm of Alaska’s Cook Inlet. Whales fed on herring on either side of her boat. She pulled up one of her lines and found that instead of a halibut, she had caught a sculpin, a googly-eyed spiny fish with a bulbous head.

The sculpin held yet more surprises: It was a kind of nesting doll. “(It) had eaten another fish that had eaten a piece of bait,” Wilson recalled afterward. For her, that moment captured the precious interconnection of the inlet’s ecosystem.

Kachemak Bay, an arm of Alaska’s Cook Inlet, and the Kenai Mountains. One of the compromises between Sen. Joe Manchin and Senate Majority Leader Chuck Schumer to pass the Inflation Reduction Act mandates a federal oil and gas lease sale in Cook Inlet by the end of the year.
Universal Images Group via Getty Images

Wilson heads the Alaska Marine Conservation Council, an environmental group. Just months ago, her organization was celebrating: The Biden administration had canceled a contentious oil and gas lease sale in Cook Inlet. She worries that offshore drilling could threaten the interdependent ecosystem that the sculpin represented. So it was a punch in the gut when she learned that the Inflation Reduction Act would reinstate the sale.

“It took the wind out of me,” Wilson said. The unexpected deal between Sen. Joe Manchin and Senate Majority Leader Chuck Schumer includes $369 billion for clean energy and climate programs alongside significant concessions to fossil fuel industries. One of those compromises mandates a federal oil and gas lease sale in Cook Inlet by the end of the year.

Many environmental groups, though not all, are praising the bill as a turning point in the fight against climate change. However, its expansion of oil and gas leasing in Cook Inlet and elsewhere have soured the deal for some in Alaska.

“Small communities should not be bargaining chips to make legislation happen,” Wilson said, “particularly communities that are rural and can’t access our D.C.-based representatives without tremendous cost.”

In the Native Village of Nanwalek, Nancy Yeaton, a tribal citizen, fears that drilling in the inlet could cause spills and contamination, threatening traditional subsistence foods, like seal.

“That inlet is like a dining room table. We go out there, and that’s where we get our food to provide extra food for our freezers, for our tables, things that our body needs,” Yeaton said. “It’s very worrisome to me, because my great-grandchildren, you know, are chasing possibly the last of the good food that comes from the ocean.”

Cook Inletkeeper’s advocacy director, Liz Mering, called the mandate “surprising” and “painful.” 

“It really kind of pulls the rug out for people who stood up and said ‘no’ (to offshore drilling in Cook Inlet) and have been saying ‘no’ for decades,” said Mering. “To feel like your voice doesn’t matter … is just challenging.”

Source: BOEM Alaska OCS Region

The Bureau of Ocean Energy Management originally called off the auction in May, following the  public comment period on its draft Environmental Impact Statement, which analyzed the potential effects of a lease sale in Cook Inlet’s federal waters. The agency said that oil and gas companies had not expressed interest in the sale.

However, environmental advocates and the people who live and work in the region did express interest — and substantial opposition. Over 92,000 environmental groups, tribes, residents, business owners and commercial fishers commented on the draft EIS. Most of the comments posted publicly opposed the lease sale, citing concern for wildlife, commercial and subsistence fishing, tourism and community health.

“To feel like your voice doesn’t matter … is just challenging.”

They said the bureau’s own calculations demonstrated untenable risk to the array of life in Cook Inlet: The draft EIS estimated a one in five chance of a major oil spill if oil production occurs there.

“This is unacceptable,” Chairman Gary Harrison of Chickaloon Village Traditional Council wrote in the comment he submitted. “In addition to the potential for spills associated with exploration and drilling in federal waters, there remains the considerable risk of spills from the aging infrastructure and pipelines in state waters surrounding federal waters. Together they compound the risks to marine life, including marine mammals, fish, and seabird.”

One company in particular could benefit from the chance to buy more Cook Inlet leases, Wilson and others said — Hilcorp Alaska. Hilcorp already operates all the federal oil and gas leases in the inlet and is the only company to bid on them in the last 20 years. 

Hilcorp has a history of regulatory violations. This spring, the Environmental Protection Agency fined the company $180,000 for allowing methane and volatile organic compound leaks to go unrepaired at its other oil and gas sites in Alaska. 

Hilcorp has not expressed public interest in this lease sale, but Federal Election Commission records show that the company’s chairman, Jeffery Hildebrand, donated $5,800 to Manchin’s campaign committee last year. Neither the company nor the senator responded to a request for comment.

While the legislation makes it clear that the lease sale must occur, the fate of offshore drilling in Cook Inlet is less certain. Both of Alaska’s senators, as well as groups that support oil and gas expansion in Alaska, have said that federal lease sales in the inlet are necessary to meet the region’s energy needs. However, there have been no commercial discoveries of oil and gas in Cook Inlet’s federal waters since the first federal lease sales were held there in 1977. The Bureau of Ocean Energy Management says that it has not received a complete exploration plan for the leases Hilcorp currently holds.

“Even if Hilcorp or another company were to bid and own leases, there are a number of steps where the public will still be getting involved,” said Mering. “So just because there are lease sales does not mean that there will be drilling in Cook Inlet.”

Meanwhile, offshore drilling opponents aren’t giving up. Instead, they’re turning their attention to longer-term goals, including barring future lease sales and stopping any leases sold from becoming active drilling sites.

Avery Lill is an Alaska-based staff writer for High Country News focusing on land and the environment in Alaska. Email her at [email protected] or submit a letter to the editor. See our letters to the editor policy.

Note: This story has been updated to correct Jeffery Hildebrand's title. He is Hilcorp’s chairman, but is no longer the company's CEO.

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