Suit Challenges Oil Drilling in Alaska Recreation Area

Environmentalists, commercial fishing groups and the Ninilchik Traditional Council have filed suit to stop a controversial oil-lease sale in Alaska’s Cook Inlet, where several U.S. oil companies have hoped to find new petroleum reserves.

“This lease sale is offshore of the most popular recreation area of the state,” said Ann L. Rothe, executive director of Trustees for Alaska, the nonprofit law firm that filed the suit Friday in Alaska Superior Court in Kenai.

Part of the largely offshore tract is along the coast of famed Kenai Peninsula, which some commercial fishermen refer to as “the breadbasket of Alaska.”

The plaintiffs want an injunction blocking the state’s sale Jan. 25 of an area designated Lease Sale 78.

Alaska Assistant Atty. Gen. Kyle Parker, who said the state is in a revenue “crunch,” described the action as a general attack on Alaska’s oil-lease program.

New revenues from oil leases, Parker said Monday, are of increasing importance as the state’s tax income dwindles. Fully 85% of the state’s revenue comes from taxes on existing oil production, but that income is declining as North Slope production slows.

Since Atlantic Richfield Co. struck promising amounts of oil at its Sunfish site in 1991, several energy companies have expressed renewed interest in the Cook Inlet area, which first was explored in the 1950s. The Sunfish discovery--which Arco of late has described as less promising than it once seemed--is about six miles from part of the proposed leasehold.

The lease sale area is the sole tract in Cook Inlet to be offered for lease in the next two years.

“It’s the only game in town until 1996,” Parker said. “And the state’s in a crunch. The state is going to have to look to areas (for oil exploration) where they haven’t looked before. And people (in Alaska) will have to recognize that the schools and buses that they depend on come from oil.”

The plaintiffs, who have attempted to stop oil lease sales in other areas around Alaska, are skeptical of state claims that restrictions on drilling during fishing season and a requirement that oil companies use horizontal drilling techniques could make oil production in the tract safe.

“This lease is ill-advised,” Rothe said. “The state is so focused on bringing in oil dollars that they aren’t taking a careful look at the impact on local economies.”