DNR Commissioner John Boyle is 'disappointed' by the results but defends royalty reductions to encourage more inlet drilling.
A view from Skilak Lake Road across Cook Inlet to Mount Redoubt, an active stratovolcano in the Aleutian Range. Credit: Lisa Hupp/USFWS
It was the second attempt by the Division of Oil and Gas to lure Cook Inlet lease sale bidding by eliminating royalties. A Gov. Mike Dunleavy and some members of the Legislature have pushed for royalty reductions or eliminations to encourage more oil and natural gas production in Cook Inlet. The idea is one of the responses to a looming shortfall of deliverable natural gas to Anchorage and the surrounding Southcentral region. The region has for decades depended on natural gas for heat and generation of electricity.Senate Majority Leader Cathy Giessel, R-Anchorage, was among the skeptics during the session.
The administration’s push for royalty cuts on existing leases and units is different from the royalty elimination used in the annual lease sale, and thus would have more impact, Boyle said.
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