North Slope leaders protest petroleum reserve legislation

Measure would give Legislature control over federal grant program

Posted: Friday, March 31, 2006

Community leaders from the North Slope showed up in force at a committee hearing Thursday to protest a bill that would give the Legislature control over a federal grant program developed for their region.

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The program was created to mitigate the effects on villages from oil and gas development in the neighboring National Petroleum Reserve Alaska.

Bill sponsor Sen. Gary Wilken, R-Fairbanks, contends the money has been misused because it often pays for projects that are not directly linked to development.

But at a hearing in the House Community and Regional Affairs Committee, North Slope Borough Mayor Edward Itta defended the spending. While the development effects are not easy to understand or identify, they contribute to a feeling among residents that their culture is "under siege," he said.

For example, word of pending development in Tushekpuk Lake - the area's "subsistence breadbasket" - is more than just a piece of worrisome news for villagers, he said.

"It hits them in the stomach. It is a threat to their culture, because it is a threat to activities at the core of their culture," he said.

The aid is derived from the state's 50 percent share of revenues from oil and gas lease sales in the 23.5-million-acre expanse along the Arctic Coast.

The grant program, created 25 years ago, has brought $112.4 million to the state in the last six years, of which 75 percent went to the communities and 6 percent to the Alaska Permanent Fund.

Over that period, four communities and the North Slope Borough have divvied up from $1.5 million to $28 million in grants each year, the amount rising and falling each year with the revenues.

The program has paid for boat launches, roller-rinks, police officers and wildlife studies.

Itta said the federal law that set up the program leaves a lot of latitude in how the impact aid is disbursed but Wilken's bill would turn it into a "political football."

The bill would set up a legislative subcommittee to review grant applications, a job currently being done by a panel of three at the Department of Commerce, Community and Economic Development.

The department said it has tightened up its guidelines in recent years in response to concerns from lawmakers. But Wilken said the program should serve the needs of the entire state, not just one area.

"I have people everyday in my office asking for money. People that truly need it," he said.

Wilken's bill requires that 25 percent of the federal revenues be earmarked for the permanent fund. Currently, the state savings account receives a percentage of whatever is left after grants have been handed out.

It would still allow communities first crack at the money, but if there was insufficient money to deposit the permanent fund's full share, the amount due would be carried forward to future years.

Committee Chairman Kurt Olson, R-Soldotna, said the committee did not support moving the bill. Instead its members wanted Wilken to sit down with the state agency in charge of the program and the North Slope Borough and work out a compromise.

"That's probably the most efficient way to handle this," he said.

Wilken said after the hearing that he does not expect to reach a resolution through negotiations, and he expects to see his bill move before the end of session.

The stakes are steadily rising in the debate. The amount of revenues from the NPR-A are expected to soar as the federal Bureau of Land Management opens up new areas for exploration.

An estimated 10 billion barrels of oil lies under NPR-A, worth some hundreds of millions of dollars.

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