ARCTIC DRILLING:

Offshore development brings 'life-and-death issues' to the Last Frontier

GIRDWOOD, Alaska -- The Yup'ik Eskimo people of Alaska's St. Lawrence Island, a 90-mile-long piece of land in the middle of the Bering Sea, are at a crossroads in their long history.

For 2,000 years, they've lived on the island, a remnant of the Bering land bridge that once linked Asia and North America. As the world came to their doorstep, the residents of Savoonga and Gambell maintained a subsistence lifestyle focused on harvesting whale and walrus while adapting to the changes around them.

Beginning in the 1600s, the residents endured contact with non-native explorers and fur traders. During the Cold War, the U.S. government set up military sites on the island. More recently, they've seen Bering Strait ship traffic increase near their shores as global warming opens Arctic waters for longer periods each summer.

This summer, they witnessed the next chapter in Alaska's saga as Royal Dutch Shell's drilling ships navigated past their lands on the way to the oil fields of America's Arctic waters.

Yesterday, Shell closed drilling operations at its wells in the Chukchi and Beaufort seas, promising to "[pick] up where we left off when the sea ice retreats next summer." The company's two drillships, the Noble Discoverer and the Kulluk, are heading south for the winter.

Now, as oil development begins in those seas, the people of St. Lawrence Island, like other Natives throughout Alaska, are seeking an increased voice in the federal and state plans for their future.

Savoonga resident George Noongwook, chairman of the Alaska Eskimo Whaling Commission, warned that new oil development in the Arctic could raise "life-and-death issues" for his people.

An oil spill or shipping accident could scare away migrating marine mammals and pollute local waters, making it difficult to continue subsistence hunting of bowhead whales and walrus. Hunting is a multifamily activity that serves as the villages' cultural anchor and provides 80 percent of the food they eat.

"Many of the risks of Arctic development are risks that could destroy our livelihoods and end our way of life forever," Noongwook, a Native musician and author, said this summer at the Arctic Imperative Summit in Girdwood.

But with the Western cash economy taking on greater importance in Alaska's Native villages, an increasing number of community leaders support Arctic oil development and construction of new coastal ports. They're counting on the businesses to provide local revenue and jobs.

North Slope Borough Mayor Charlotte Brower, a no-nonsense Inupiat Eskimo, grandmother and wife of a Barrow whaling captain, is among the Native leaders dismissing calls by Greenpeace and other environmental groups to turn the Arctic into a wildlife preserve.

"A healthy economy and a healthy ecology go hand in hand together like bread and water and the marine mammals and the sea," she said at the Girdwood conference. "If you think economic development is an environmental problem, try poverty."

As oil exploration, global warming and increased ship traffic begin to change the American Arctic, Alaska's Native people are adamant that future development must achieve an important balance between their cultural traditions and the benefits of the modern world.

Brower said the Native people are fighting for "a seat at the table in Arctic planning, a fair and stable share of the revenues generated from the development, and development that finds ways to support the culture and communities of the North Slope."

'How can our people benefit?'

Native leaders are demanding increased local control at a time when Alaska is undergoing dramatic changes that will forever alter life in the rural communities.

In July, the Coast Guard set up its first summerlong operations in Barrow, the nation's northernmost town, to assess future national security, search-and-rescue and pollution control needs in the region. Now the Coast Guard is considering a more permanent presence in the Alaska North.

In late summer, Shell began the first new oil drilling in U.S. Arctic waters in more than two decades. The operation marked an important first step for the company, which invested more than $4.5 billion and faced repeated legal and regulatory setbacks. But Shell never gained the federal permits needed to sink wells into its oil reserves in the Beaufort and Chukchi seas because of nagging equipment problems.

Edward Itta, former mayor of the North Slope Borough, warns that if the energy companies focused on the Arctic uncover a huge oil field, Alaska's coastal communities could face an industry stampede that would bring new people and new problems to the villages.

"If they find those billions and billions of barrels of oil and gas, the whole thing changes," he said at the conference.

The oil exploration is occurring at a time when Alaska's ice conditions are undergoing a striking transformation. This summer, the North Pole sea ice melted to the smallest level ever recorded. Scientists said the September ice extent was nearly 20 percent smaller than a previous record set in 2007.

The Arctic's increasingly open waters are attracting long-haul shippers and tourism traffic to the region.

For the last century, Alaska's Native people were often ignored by federal officials who built military outposts and companies that extracted gold, oil and other mineral resources from the region. Today, however, Native leaders are forcing Shell, the Coast Guard and other outsiders to rewrite the rule books on operating in the Arctic.

"We as Inupiats want to control our own destiny," Itta said. "We want to be the ones who decide how far we go with this. We as a people want to dictate what economic opportunities are there for us."

That sentiment was echoed by people from Native communities all along Alaska's north and west coasts.

"The bottom line is how can our communities benefit," former Alaska Rep. Reggie Joule (D) said in an interview in Kotzebue, a village of 3,000 people located along Alaska's western shores.

"How can our people benefit? Where can we get the jobs? How can we develop our human resources as we develop the other resources?"

Kotzebue, Nome and a half-dozen other coastal towns are actively courting investors and government agencies to help them build deepwater ports to serve the growth in shipping, oil industry traffic and the military.

Several Native corporations are seizing the opportunity to earn money from the oil companies. The Olgoonik Native Corp., which is owned by the Native residents of Wainwright, is providing oil field services for Shell, ConocoPhillips and Statoil as the companies plan for offshore oil development.

Olgoonik Chairman Hugh Patkotak, who also works as a pilot for the North Slope Borough, said that with Shell beginning drilling 60 miles from Wainwright's shores, the corporation has a unique business opportunity.

"The corporation's mission, our very reason for existence, is to be profitable in order to return value to our shareholders," he said at the conference. "To fulfill that mission, we must continue to adapt to changing times and circumstance."

Land vs. sea

Alaska's Native communities have long had a love-hate relationship with the federal government, and those tensions continue today as the two sides negotiate the future of Arctic oil development.

Much of the friction is focused on the 200 million acres of Alaska -- more than half the landmass of the entire state -- that are managed by the Interior Department and the Forest Service. Federal regulators not only oversee the national park and forest lands, but also set the ground rules for oil and gas drilling in federal waters.

Itta recalled that when he was mayor of the North Slope Borough, federal regulators dismissed the Eskimos' demands that oil companies in the Beaufort Sea stop operations during the bowhead whale hunting season.

To force the Interior Department to recognize their needs, angry Native leaders worked with national environmental groups to oppose Shell's oil exploration plans. The resulting court battles delayed the company's drilling plans for two years.

Eventually, Shell agreed to suspend oil exploration during the fall whale season. But Interior has yet to adopt regulations requiring other oil companies to follow suit.

Inupiat leaders say that before offshore oil drilling begins, the federal government should open land-based oil development in northern Alaska, particularly in the Arctic National Wildlife Refuge.

However, ANWR oil development has been repeatedly blocked by national environmental groups seeking to preserve the region's remote ecosystem. Those groups side with the Gwich'in Natives who live south of the refuge and fear that drilling would endanger the porcupine caribou herds that migrate through the region.

The North Slope leaders are also critical of Interior's recent proposal to limit oil leasing in Alaska's National Petroleum Reserve. They warn that the management plan is overly restrictive and could block construction of a pipeline from the Chukchi Sea to the Trans-Alaska pipeline.

Environmentalists praise the plan, which they say would protect important wildlife areas. The proposal would allow oil and gas leasing on roughly half the 22.5 million acres, while setting aside roughly 13 million acres as special management protection areas (E&ENews PM, Aug. 13).

But as oil drilling begins in the Arctic, some Native leaders continue to call for additional environmental protections. At the Arctic Imperative Summit, Itta recommended that the federal government bar drilling in parts of offshore Alaska.

"If you want to sustain the culture, you have to give the health of the whale and its habitat equal priority over oil and gas activities," Itta said. "This means probably putting significant protective status on chunks of the Beaufort and Chukchi sea."

He called on the Interior Department to craft new oil industry regulations specifically designed for the Arctic's unforgiving, icy conditions. "You can't just take the Gulf of Mexico standards that are all tropical in nature, tweak them up a little bit and send them up North and say that'll do," he said. "I urge real-life tests for oil spill containment in the Arctic in ice-infested waters."

Worlds collide

In less than two generations, Alaska's North Slope communities have evolved from a traditional subsistence lifestyle to a partial Western cash economy.

"We no longer function in an isolated barter economy or rely totally on subsistence as our ancestors did," Olgoonik Corp.'s Patkotak explained. "Our households are transitioning between the old and the new, holding strong to traditional Inupiat values while acknowledging the reality of living in a cash-based society."

That evolution was accelerated in 1968 when Atlantic-Richfield Co. discovered a massive oil field at Prudhoe Bay in northeastern Alaska. To make it easier for eager energy companies to secure rights of way in the oil-rich region, the federal government settled its ongoing battles with Native leaders over aboriginal land claims.

In 1971, Congress passed the Native Claims Settlement Act, which created 13 Native regional corporations and more than 200 village corporations. The new Native groups gained title to 44 million acres of land and received $462.5 million from the federal government. They also received a share of oil revenue. In addition, the Native boroughs charge property taxes for oil shipped across their lands via the Trans-Alaska pipeline.

However, modern-day conveniences have been slow to arrive in some remote Native villages. Wainwright, for example, just converted from portable toilets, locally called honey pots, to a municipal sewer and water system in the past two years.

Alaska Native village residents also say they need oil for heat and to run their four-wheelers and snowmobiles. They crave flat-screen TVs, cellphones and other modern appliances that require cash. Those modern-day products are shipped to the remote villages through an annual delivery or via expensive air freight. Most rural Alaska communities are not connected to the state road system.

In isolated villages where jobs are scarce and temperatures tend to stay below zero all winter, the two worlds can be difficult to reconcile.

"You're paying $7, $8 or even $14 a gallon for heating oil and $14 to $15 for milk -- if you can get it fresh," said Kotzebue's Joule, who is running for mayor of the Northwest Arctic Borough. "Sometimes the decision lies between cash available to heat or to feed."

Changing Arctic 'a real-time priority'

As ship traffic increases along Alaska's coasts, the villages are calling for the Coast Guard to do a better job of policing the offshore waters. They want the government to establish international shipping lanes along their shores. So far, relief has been slow to arrive.

June Walunga, secretary of the Gambell village tribal council on St. Lawrence Island, said her people feel increasingly vulnerable as they watch ships in the Bering Sea pass close to their shores.

"The island is right in the middle, in the pathway of the shipping lanes from the Arctic," Walunga said at the Girdwood conference.

"Our village is not prepared to rescue large vessels or if there's a collision. Nor are we equipped to monitor or communicate with any of the foreign vessels to warn them or report them to the Coast Guard if they venture too close."

This summer, the Coast Guard brought two helicopters, a medium-strength icebreaker, a national security cutter and two buoy cutters to the Arctic to respond to any emergencies along Alaska's expansive north and west coasts.

But that fleet won't be enough to handle the fast-changing Arctic, conceded Rear Adm. Thomas Ostebo, commander of the Coast Guard's 17th District. At the Arctic conference, he noted that a record 95 ships were traveling through the Arctic during the last week of August.

"It's a real-time priority for the nation to get our arms around the things that are going on in the Arctic," he said. "We know that we're not controlling this. I think the U.S. is late to the table."

Washington appears to be waking up to the growing needs of Alaska, the nation's only Arctic state. In 2011, the White House set up an interagency working group to coordinate federal oversight of energy development projects in Alaska. This summer, Secretary of State Hillary Rodham Clinton promised to craft a comprehensive U.S. Arctic strategy plan.

Meanwhile, the state of Alaska is developing its own Arctic strategy through a commission created early this year by the state Legislature. State lawmakers are urging creation of a public-private port authority to develop a network of harbors along Alaska's north and west shores. They're also working with the Army Corps of Engineers and military leaders to consider the best location for at least one deepwater port in the region.

As industry and the state and federal governments begin to draft plans for radical changes in Alaska's Arctic region, the Native groups that live in the region insist they should be consulted every step of the way.

"It's about local empowerment," Joule said. "People need to be made aware that we're not here to block or stop development, but to find a balance in how that development occurs. Because at some point, some of that comes at too steep of a price to pay."

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