Federal Judge Orders Reassessment of Cook Inlet Oil Lease Impact on Beluga Whales

A federal judge has mandated that the Interior Department reconsider the impacts of a Cook Inlet oil and gas lease sale on endangered beluga whales. The ruling affects a lease held by Hilcorp, a major producer in Cook Inlet, which acquired a 5,693-acre lease in a 2022 sale.

This sale, the only one with a bid from Hilcorp, was required by the 2022 Inflation Reduction Act, which included provisions for oil and gas leases in Cook Inlet and the Gulf of Mexico at the insistence of Senator Joe Manchin.

Environmental groups from Alaska and across the nation contested the lease sale, arguing that the Interior Department had insufficiently evaluated the impact of drilling on the endangered beluga whale population in Cook Inlet.

These activities, involving significant undersea noise, could interfere with the whales’ echolocation abilities. U.S. District Judge Sharon Gleason sided with the environmental groups, ruling that the Bureau of Ocean Energy Management (BOEM) failed to consider a reasonable range of alternatives that could mitigate these impacts.

Judge Gleason’s decision stops short of invalidating the lease sale entirely. Instead, she ordered BOEM to conduct a supplemental environmental analysis and explore alternative leasing arrangements that would better protect the belugas. This might lead to a reduction or cancellation of Hilcorp’s lease.

Carole Holley, an Earthjustice attorney, emphasized that the ruling underscores the limited scope of the Inflation Reduction Act and reaffirms the relevance of the National Environmental Policy Act (NEPA) and other environmental laws.

The NEPA, a foundational environmental law from the Nixon era, requires federal agencies to assess the environmental impacts of their actions. Earthjustice and other conservation groups are also challenging similar lease sales in the Gulf of Mexico mandated by the Inflation Reduction Act.

Despite frequent conflicts over resource development, the state of Alaska supported the lease sale, with officials expressing disappointment over the court’s decision, which they believe adds uncertainty contrary to congressional intent.

As of January 2024, Hilcorp is the sole company holding federal leases in Cook Inlet, none of which are currently producing oil or gas. Industry analysts attribute the lack of interest in recent lease sales to the rise in renewable energy production and higher production costs. BOEM must report back to the court in six months on the progress of its supplemental environmental analysis.