Federal government, Alaska host lackluster Cook Inlet lease sales
Key Highlights
- The federal Cook Inlet lease sale offered 216 blocks but received no bids, marking a significant lack of industry interest.
- The Alaska state lease sale drew only one $600 bid for a 20-acre tract, far below previous sales' values.
A federal lease sale mandated by the One Big Beautiful Bill Act (OBBBA) was a flop, with no companies bidding for leases, the US Bureau of Ocean Energy Management (BOEM) stated on its website on Mar. 4. A lease sale concurrently held by the state of Alaska fetched only a single bid.
The federal Big Beautiful Cook Inlet Lease Sale 1 (BBC1), the first of six mandated through 2032 under the OBBBA, offered 216 blocks on about 1 million acres. The blocks were located toward the northern part of the Cook Inlet Planning Area, stretching roughly from Kalgin Island in the north to Augustine Island in the south.
“At this time, no bids have been received. In accordance with OBBBA, we will continue to hold leasing opportunities for Cook Inlet so that industry has a regular, predictable federal leasing schedule that ensures we achieve President Trump's American Energy Dominance Agenda,” BOEM posted.
BOEM will hold additional sales in 2027, 2028, 2030, 2031, and 2032. The lack of interest in the first sale came despite BOEM offering the lowest royalty rates possible—12.5% for both hallow and deepwater leases—“to encourage strong industry participation,” as the agency said in a press release first announcing the sale. It was the first federal Cook Inlet sale since 2022.
A coalition of environmental and native Alaskan groups last week said they intended to sue the federal government over the Cook Inlet sale, citing inadequate environmental reviews. The groups raised alarms about the impact of drilling on endangered species, especially the Cook Inlet beluga whale, whose population is roughly 330, according to the Center for Biological Diversity.
The results reinforce the argument that this and future sales are unwarranted, according to a statement released by Earthjustice, one of the groups suing the federal government.
“We are glad to see no companies bid in this unlawful lease sale. This is great news for all who live in and around the Inlet, and particularly critically endangered Cook Inlet beluga whales,” Earthjustice attorney Hannah Payne-Foster said in the statement.
“This lease sale was a big, fat failure,” added Athan Manuel, director of the Sierra Club’s land protection program. “Even oil and gas companies recognize that leasing in dangerous, undeveloped areas is all risk and little reward.”
Meanwhile, the Alaska Division of Oil and Gas’ annual Cook Inlet sale drew only a single bid, according to results released Mar. 4.
The state offered 2.9 million acres, but received one bid, by Three Mountain Oil LLC, for a 20-acre tract. The company bid $600 for the tract, well less than the state agency received in previous sales. In 2025, Hilcorp Alaska LLC paid $886,588 for 15 tracts on 21,664 acres. In 2024, the same company bought 3 leases on 3,986 acres for $159,000.
Industry interest in Alaska has waned in recent decades, as high exploration costs, long-term production declines and intense environmental scrutiny push oil and gas companies to invest in other, more profitable regions.
About the Author
Cathy Landry
Washington Correspondent
Cathy Landry has worked over 20 years as a journalist, including 17 years as an energy reporter with Platts News Service (now S&P Global) in Washington and London.
She has served as a wire-service reporter, general news and sports reporter for local newspapers and a feature writer for association and company publications.
Cathy has deep public policy experience, having worked 15 years in Washington energy circles.
She earned a master’s degree in government from The Johns Hopkins University and studied newspaper journalism and psychology at Syracuse University.