Halibut Cove Lagoon is a semi-enclosed embayment about 0.7 miles (1 km) wide at the head of Halibut Cove on the southeast shore of Kachemak Bay on the Kenai Peninsula, about 20 miles (32 km) northeast of Seldovia and 13 miles (21 km) southeast of Homer, Alaska. The lagoon was named after Halibut Cove and was first published by the U.S. Geological Survey in 1961. The lagoon has depths reaching 230 feet (70 m) but is isolated at low tides by a gravel bar at the edge of an alluvial fan which reduces the entrance to a swift shallow stream. At high water, the navigable entrance channel is not well defined and requires local knowledge. A public dock at the south end of the lagoon is used by local boaters and water taxis delivering adventurers to a roadless Kachemak Bay State Park. The south side of Kachemak Bay is of great interest to geologists because the bedrock is exposed, unlike the north side of the bay where most of the bedrock is buried under glacial till. Alaska’s gulf coast is underlain by two parallel geological accretionary terranes, the Wrangellia composite terrane consisting of the Peninsular, Wrangellia, and Alexander terranes, and the Chugach-Prince William terrane. During much of the Mesozoic, the two formed a magmatic arc and accretionary wedge, respectively, above a circum-Pacific subduction zone. The south side of Kachemak Bay is part of the Chugach-Prince William terrane and forms a group of rocks called the McHugh Complex. This is a tectonic mélange consisting mostly of argillite, greywacke, chert including radiolarian chert, and basalt. The western and eastern shorelines of Halibut Cove Lagoon, with the exception of the alluvial fan at the mouth of Halibut Creek, are composed of basalt and chert. The head of the lagoon is composed predominantly of gray, gray-green, and dark-green weakly metamorphosed siltstone, greywacke, arkose, and sandstone. Halibut Creek starts at the terminus of two unnamed tributary cirque glaciers that once joined with Grewingk Glacier but are now isolated. The tributaries merge and flow for about 8.5 miles (14 km) generally west-northwest to Halibut Cove. The sediment load of this stream during the recent retreat of the glaciers was deposited as a delta that forms Halibut Cove Lagoon and restricts ocean circulation.

The earliest evidence of people inhabiting Kachemak Bay is about 3,000 years old. These people arrived from Kodiak with many of the same tools and culture as the Iñupiat and are called the Kachemak Tradition. They lived in coastal settlements and hunted caribou, moose, bears, and sea mammals. They also caught fish, birds, and mollusks. Round or oval stone lamps and realistic human figures of carved stone have been found. Rock paintings attributed to the culture were generally highly stylized representations of men and animals. Little is known of the earliest dwellings, but in later periods of occupation, they built semi-subterranean dwellings of stones and whale vertebrae. The people of the Kachemak Tradition seem to have abandoned Kachemak Bay by about 1000 AD at which time the population was supposedly replaced by in-migrating groups of ancestral Dena’ina Athapaskans. The Denaʼina are the only Northern Athabascan group to live on saltwater and a relatively abundant food supply allowed them to adopt a mostly sedentary lifestyle. Archaeological work at an ancient village site near Halibut Cove called Soonoondra suggests that the Dena’ina occupied Kachemak Bay for the last 1,000 years. Seals were the most important species hunted in Kachemak Bay, and sea lions, sea otters, porpoises, and beluga whales were also taken. The Dena’ina fished for salmon by using weirs or structures to dip-net passing fish, but most salmon fishing took place in streams or lakes. In addition to salmon, deep-sea fish were caught, especially halibut and cod, and they would travel long distances to dig clams. In 1786, Grigory Shelikhov of the Shelikhov-Golikov Company sent a party under Vasilli Malakhov to attack the Kenai Peninsula Dena’ina in retaliation for their part in a battle on Shuyak Island in the Kodiak Archipelago. Malakhov established Alexander Redoubt in Kachemak Bay at present-day Nanwalek. In 1789, Gerasim Izmailov entered Cook Inlet and explored Kachemak Bay, and an island in Halibut Cove is named after him. In 1794, the Russians attacked Soonoondra, took many young girls and women back to the fort, and kept them as wives. European diseases eventually decimated the Dena’ina, and along with cultural changes, their population dwindled.

During the late 1800s and early 1900s, both Dena’ina and Euro-Americans in Kachemak Bay fished for Pacific herring on a small-scale subsistence basis. Herring spawned in the extensive eelgrass beds along the shores of Halibut Cove and Halibut Cove Lagoon, and Chinook salmon, pods of beluga whales, and harbor seals fed on the herring. In 1914, the massive abundance of herring in Halibut Cove resulted in the first commercial herring fishery. The industry grew slowly until 1917 when the U.S. government successfully introduced a new method of processing herring called Scotch curing. In 1918, the industry boomed largely because of the new curing method, and there were 36 herring salteries and reduction plants in Alaska, with 15 in Kachemak Bay. From 1919 to 1926, the number of plants in Lower Cook Inlet increased to 32, and many of these were located in Halibut Cove. The fishery ended in 1928 when the herring population collapsed and the salteries stopped operating. Possible causes for the collapse include overfishing and pollution of the spawning areas. Large purse seines and gillnets were used to catch fish before they could reproduce, and the salteries dumped fish waste on the beaches and in shallow waters destroying spawning habitat. The herring crash was commercially and ecologically catastrophic. The last herring plant was gone by 1930 and the herring fishery in Lower Cook Inlet never recovered. Halibut Cove Lagoon and other shallow embayments in Kachemak Bay once had extensive eelgrass beds, an essential habitat that supported a high abundance and diversity of marine fishes and invertebrates. Eelgrass also provides other important ecological functions such as oxygen production, nutrient recycling, erosion control, and contaminant filtration. In Alaska, eelgrass is often the preferred spawning substrate for the Pacific herring and provides a rearing habitat in spring and summer for many other commercial and forage fish species. Steller sea lions, seals, porpoises, belugas, and many species of birds ate large quantities of the fish as well as eggs that female herring deposited on eelgrass in the spring. The discarded fish waste from the salteries likely caused eutrophication of the poorly flushed embayments, effectively destroying the eelgrass habitat. Read more here and here. Explore more of Halibut Cove Lagoon here: