Positive Environment News

Alaska Mulls Oil, Gas Drilling in Fishing Area

Date: 24-Oct-05
Country: USA
Author: Yereth Rosen

The Bristol Bay region in southwestern Alaska, site of the world's biggest sockeye salmon runs, rich crab fisheries and other lucrative seafood harvests, could join the North Slope and Cook Inlet to become the state's third energy-producing province, Murkowski said in a recent Anchorage speech, setting the stage for a potential political fight.

"This is an ice-free area, and if we get lucky it could have a profound effect on another major producing area for Alaska. We're very excited about it," said the Republican governor, who has scheduled an October 26 state lease sale for mostly onshore territory on the Alaska Peninsula adjacent to Bristol Bay.

Some local groups have loudly opposed drilling, but some locals have also embraced it.

Royal Dutch Shell Plc's Shell Exploration and Production Inc. has expressed interest in Bristol Bay development, particularly for natural gas in federal waters offshore, an area from which energy companies were ejected a decade ago.

In meetings with local officials and fishing groups, Shell representatives have outlined ambitions for platforms, pipelines and perhaps exports of liquefied natural gas in several years, if the resource proves large enough.

Years ago, when opposition to drilling was fierce and memories of the Exxon Valdez spill were fresh, such plans would have likely caused an uproar.


In the late 1980s, fish prices were high and oil prices were low, and the idea of drill rigs in Bristol Bay was considered a dire threat by many, said Bob Juettner, administrator for the Aleutians East Borough, a local government encompassing six coastal villages.

"One red salmon was worth more than a barrel of oil in the summer of 1988," he said.

But now, with fishing fortunes dwindling and energy prices soaring, many residents of the fish-dependent region are embracing Murkowski's and Shell's development ideas.

"I think a lot of people are seeing the handwriting on the wall, that there's less of an opportunity for people going into fisheries," said Juettner.

While the state and the US Bureau of Land Management are considering onshore energy development in the area, the North Aleutian Basin is considered the real energy prize in the region. A 10-year-old Minerals Management Service assessment estimates the federal offshore area holds 230 million barrels of recoverable oil and 6.8 trillion cubic feet of natural gas.

The projected oil reserves are modest. A supply of 230 million barrels would satisfy less than two weeks of US oil demand.

Natural gas is the main attraction, Shell officials have said. The development the company envisions would mean a big transformation for a region where the biggest community, Dillingham, has only about 2,400 residents.

Bristol Bay's federal waters are currently off-limits to oil and gas leasing. Presidential and Congressional moratoria were slapped on after the 1988 sales. While the Congressional ban was lifted in 2003, the presidential ban remains in place.

Despite his enthusiasm for energy development in the region, Murkowski stopped short of asking for an end to the presidential moratorium, saying that the decision should depend on public and industry sentiment.

Citing threats of oil releases and chemical pollution and the "disastrous effect" of the Exxon Valdez spill, the Bristol Bay Native Association, a tribal organization, earlier this month passed a resolution against offshore development.

But some Bristol Bay-area groups, including local governments and Native organizations, have called for the drilling ban to be lifted.

The pro-drilling attitude is new, Murkowski acknowledges. "It represents a departure. It marks a change in the way rural Alaska is approaching resource development," he said in a speech Thursday to the Alaska Federation of Natives.

© Thomson Reuters 2005 All rights reserved

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