A combination of state incentives and improved estimates of the amount of natural gas held in Alaska’s storied Cook Inlet are prompting energy companies to take a fresh look at the state’s original oil patch.

Alaska officials want to reverse a decline in natural-gas production around the inlet, which is home to more than half the state’s population, as well as to spur the creation of new jobs and generate production royalties.

Energy producers are returning to Alaska’s Cook Inlet, birthplace of the state’s modern oil- and gas-exploration business, after fleeing for the North Slope’s vast reserves. Above, Thomas E. Kelly, former state commissioner of natural resources, at a 1969 North Slope lease auction.
.Situated on Alaska’s southern coast, Cook Inlet is the birthplace of the state’s modern oil- and gas-exploration business. Drilling began in 1958 along the narrow bay that stretches 180 miles from Anchorage to the Gulf of Alaska, dotting fjords and forests with pipelines and oil derricks and helping boost the population of the nearby Kenai peninsula to its current 50,000 from about 6,000.