Governor stops short of endorsing Bristol Bay oil drilling

Posted: Friday, October 14, 2005

ANCHORAGE - Offshore drilling for oil in Bristol Bay, one of Alaska's most prolific fishing regions, has failed to win the endorsement of Gov. Frank Murkowski.

In a letter to the U.S. Minerals Management Service, which regulates offshore drilling in federal waters, Murkowski instead said he hopes the public and industry will provide the agency and the state with "adequate information to decide whether" to ask President Bush to lift a drilling ban.

The governor was more bullish on leasing in other Outer Continental Shelf regions around Alaska, including the Beaufort and Chukchi seas in the Arctic.

Drilling in the North Aleutian Basin, which takes in Bristol Bay, could yield trillions of cubic feet of natural gas plus millions of barrels of crude oil, government geologists believe.

But the idea of drilling in seas that support rich stocks of sockeye salmon, bottom fish, king crab and marine mammals is highly controversial, dividing stakeholders around the bay.

The federal government collected more than $95 million in a 1988 lease sale in the bay, but commercial fishermen, environmentalists and Alaska politicians later won cancellation and a government buyback of the leases.

Salmon prices have since collapsed, plunging the region's mainstay commercial fishing industry into a depression. That has prompted more interest in the jobs and tax revenue that oil and gas development could bring. One major oil company, Shell, has visited local governments with a concept to produce natural gas from offshore platforms and freeze it into liquid form for shipment to the Lower 48, where natural gas prices have skyrocketed.

Murkowski submitted his letter to the Minerals Management Service as part of the agency's assessment of potential U.S. offshore areas to offer for lease during 2007-2012. The Bristol Bay region is among many coastal areas currently off-limits to drilling, including most of the West and East coasts.

The federal government controls waters between three and 200 miles offshore, while states control the nearshore waters.

Alaska officials are planning to lease land and nearshore waters on the remote Alaska Peninsula, which cradles Bristol Bay, on Oct. 26. Oil companies could drill horizontally from land-based sites to search for oil and gas underneath nearshore waters.

Such development has won wide support around Bristol Bay, but people are split on offshore drilling.

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