Governor holds forum on Bristol Bay oil, gas

Native leaders look at development in region where fishing has suffered

Posted: Thursday, October 23, 2003

ANCHORAGE - Gov. Frank Murkowski told a gathering of Native leaders Wednesday that oil and gas exploration would bring good jobs to Southwest Alaska and keep young people from seeking work elsewhere.

"Our job in state government is to help your leadership ... achieve what you want," Murkowski said. "Too many of our kids are leaving this state."

The governor and several of his commissioners met with Native leaders and residents to talk about plans to bring oil and gas development to Bristol Bay and the Alaska Peninsula, which is facing a crushing downturn in commercial fishing.

The state has said that oil and gas reserves in the area are difficult to quantify without further drilling. The last onshore well was drilled in 1985. In 1995, the U.S. Geological Survey estimated that the Alaska Peninsula had a 1-in-20 chance of containing 447 million barrels of oil and 1.4 trillion cubic feet of gas.

In comparison, the Prudhoe Bay oil field, the largest in North America, has recoverable reserves of 12 billion barrels of oil and 30 trillion cubic feet of natural gas.

In July, the state reached an accord with the Bristol Bay Native Corp. over the prospects of holding areawide lease sales. The corporation owns 3.1 million acres in the region on behalf of more than 7,000 shareholders.

If the state determines that a lease sale is in its best interest, the sale likely would be held in October 2005, according to the state. A preliminary decision is expected by January with a final decision in September 2004.

The state has said gas development in the area could offset the high cost of energy and help lower the cost of processing fish for local communities. Former state Sen. Nels Anderson of Dillingham, one of the forum's presenters, said it costs $200 to make a ton of ice in Bristol Bay and $50 in Cook Inlet because of the higher cost of diesel fuel.

Murkowski said no decision on drilling would be made without substantial input and cooperative effort from the local communities. He said he would be meeting soon with independent oil and gas producers to talk about the potential for developing Bristol Bay reserves.

"The prospects are very, very encouraging," he said.

Robin Samuelsen, CEO of the Bristol Bay Economic Development Corp. and moderator of the meeting, threw his support behind the idea.

"We have been faced with five to six years of fishing disasters," Samuelsen told the gathering. "We need to look at a long-term, bigger picture in Bristol Bay."

Fisherman Tom Tilden, a board member of Choggiung Ltd., the village corporation in Dillingham, told the governor that local residents desperately need work but he said concerns remain about the potential harm that drilling could do to the environment.

"I ask that you exercise caution. That is where we hunt," Tilden said. "There are some worries."

Residents are worried that if the project goes forward the big companies will snatch up all the jobs for their employees, said Hazel Nelson, president of Becharof Corp., the village corporation of Egik where the last oil well was drilled.

She told the forum that an army of fishermen have fled the region already to find work in construction in Anchorage.

"How are we going to make sure our people are employed?" she asked.

Commissioner of Labor Greg O'Claray said the governor has issued a directive that Alaska jobs go to Alaskans. He also asked Nelson for her help. He said local organizations need to work with the state to identify areas where job training will be needed.

Murkowski stressed that oil and gas development for the Bristol Bay area could provide a good future.

"Our policy is to maximize the jobs for local residents," he said.

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