Alaska Natives in the Driver’s Seat for Oil and Gas

January 14, 2016 in Blog, Local Perspective

In the discussion about Arctic oil and gas development in the Lower 48, the Native voice  – and their support for local development – are often drowned out in the cacophony of anti-drilling activists and their media stunts. Actions may ultimately speak louder than words: An article published in Alaska Dispatch News (ADN) earlier this week, titled “In hunt for oil, Alaska Native corporations become state’s new wildcatters,” spotlighted oil and gas projects spearheaded by Alaska Native corporations. Their enthusiasm for oil and gas development cannot be more clear. As the article explains, Alaska Natives see energy development as key to “creating jobs for local residents and providing affordable energy in villages beset with towering costs, including more than $10 a gallon for gasoline and heating oil in some areas.”

Alaska Native corporations’ participation in oil and gas development is not new. In fact, the economic success of Alaska Native corporations – “the sophisticated business powerhouses of the Alaskan business world” – has been attributed in large part to their participation in the oilfield service industry:

“The successes of ANCSA [Alaska Native Claims Settlement Act] corporations in the oilfield service industry is a story of alliances, a recognition of the importance of the Native community to the oil industry, a recognition of the Native community in Alaska, and a recognition by the oil industry of its social responsibility to the Native community.”

Communities throughout Alaska are eager to develop oil and gas resources for three main reasons: Development can drive down heating costs, provide revenues to support critical services, and help preserve the Native culture.

1. Oil and gas development can help lower heating costs.

As of July 2015, the average retail price of electricity in Alaska was almost double the national average. While the rest of the country is seeing gasoline prices around $2 per gallon, Alaskan residents have to pay $6 to $10.75 per gallon at the pump. Costs may be even higher in rural communities: Electricity in remote villages, for example, can cost more than twice that of the state average. In 2008, Ralph Anderson, head of tribal consortium Bristol Bay Native Association, testified in Congress that the “rising cost of energy has reached unprecedented proportions in rural Alaska,” and that the impact is “unbelievable in our rural communities, threatening the very survival of many remote villages.”

Some Alaska Native corporations hope that their oil and gas projects could help lower energy costs: One corporation told ADN that the prospects it is eyeing may contain enough gas to heat and power Fairbanks for 20 years, and that the propane refined from the natural gas could be used to lower heating and electricity costs in other villages as well. Another corporation is working toward the same goal by drilling its first well this year: lower living costs in the Copper River region in Southcentral Alaska.

2. Oil and gas revenues fund basic services.

With oil and gas supporting 90 percent of Alaska’s revenues, Native Alaskans have repeatedly emphasized the significant role that the industry plays in supporting their communities: Jacob Adams, Sr., chief administrative officer for the North Slope, has said that courtesy of oil and gas taxes, “villages on the North Slope have gone from basically Third World status to modern communities where we enjoy the pleasure of flushing a toilet.” Oil revenues also support schools, water and sewer systems, roads, and health clinics “in every village of the North Slope.” Tara Sweeney of the Arctic Slope Regional Corporation (ASRC) agreed, explaining that Arctic development helps North Slope communities operate their infrastructure and schools.

3.  Oil and gas development can help stem out-migration and allow Alaska Native communities to preserve their indigenous cultures.

According to the Alaska Division of Community and Regional Affairs, the trend of rural out-migration has accelerated, marked by a loss of 2,355 people on average per year between 2000 and 2008. Tom Maloney, representing an Alaska Native corporation, told ADN that lower energy costs from increased development could help stop the out-migration of residents from the Copper River region’s villages:

“Affordable energy is one of the biggest reasons people are leaving the various villages around the state.”

An “out-migration of huge scale” – due to high energy costs – is a risk, as warned by Steven J. Morello, then-Director of the Department of Energy’s Office of Indian Energy Policy and Programs:

“Clearly, the most pressing issue facing the Interior villages is the high cost of energy. My real concern is that if we do not find a way to provide affordable energy to these villages, we could face, as soon as this winter, an out-migration of huge scale.”

Making it possible for Alaska Natives to continue living in their villages is a necessary prerequisite for them to “preserve our traditional way of life and culture,” as ASRC’s Richard Glenn testified in Congress:

“The development of Arctic oil and gas resources provides our communities with the means to preserve our traditional way of life and culture while also allowing our residents to enjoy a greater quality of life. Put another way, our communities cannot survive without continued resource development in our region.”

In Short

The recent actions taken by Alaska Native corporations to launch their own oil and gas projects underscore the fundamental fact that energy development is tightly linked to the survival of Native communities: Oil and gas development can not only lower energy costs and contribute funding for basic services, but it can also help Alaska Natives preserve their way of life for generations to come.