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Who’s Deciding Our Future? The Ongoing Influence of Outside Interests on Alaska Projects

by Oct 30, 2020Government, Magazine, Mining, Oil & Gas, Transportation

Aleutians East Borough

The challenge of dealing with groups with a ‘special interest’ in blocking development

In 1960, nearly 9 million acres in Alaska’s northeast corner was set aside as a protected wildlife refuge—the Arctic National Wildlife Refuge (ANWR). Twenty years later, then-President Jimmy Carter expanded the refuge to 19.3 million acres, but set aside about 8 percent of ANWR for potential oil and gas development, called the 1002 area after a clause in the Alaska National Interest Lands Conservation Act (ANILCA). The exploration had to be authorized by Congress.

Since that time, ANWR exploration has been repeatedly brought up by Alaska’s congressional delegation but fails to pass.

Lawsuits against drilling are filed by a range of organizations, including Earthjustice, National Resources Defense Council, and other environmental groups. Every move on ANWR makes national headlines. Bills from Lower 48 congressmen to return the 1002 area to wilderness status similarly fail.

Then in 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which includes authorization for responsible development. But what looked like a long-fought victory for those seeking to develop the area hasn’t manifested. Nearly three years later, development is dogged by lawsuits.

“Where it’s really frustrating is when people in Congress from other states step in and start getting involved in those discussions on Pebble mine, on ANWR, on pretty much overall resource development. It’s like they’re trying to save us from ourselves, and certainly insinuating that the Alaskans who are up here working on these projects aren’t going to do it responsibly.”

—Rebecca Logan, CEO, The Alaska Support Industry Alliance

Why so much attention on an isolated, out-of-the-way, rarely visited sliver of Alaska’s Arctic? Through a Lower 48 lens, ANWR is often seen as a pristine slice of wilderness already being threatened by a warming climate. Development opponents cite impacts on wildlife, the local environment, climate change, and the diminishment of wild areas. Several major banks have announced they will not fund drilling in ANWR.

It’s a story that has played out all over Alaska for decades. Every major resource development or energy project in Alaska, and some smaller ones, are almost immediately hit with opposition from Outside organizations. It’s not just ANWR; it’s the proposed road to the Ambler Mining District, it’s a gravel road to the Aleutian village of King Cove, it’s mines at Pebble and Donlin, coal in Chickaloon, and even the long-delayed North Slope natural gas development.

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In late August, Alaska Governor Mike Dunleavy wrote an opinion piece that was published in The Hill, noting that Outside interests have delayed development in Alaska for decades.

“Denying Alaska the ability to develop our natural resources certainly flies in the face of our rights,” Dunleavy writes. “As a state whose admittance to the union was predicated on our ability to develop natural resources for the benefits of our people and our country, a future viability of Alaska has been thrown into question in only a few short decades after misled activism.

“The simple truth is that for every project of Alaska unceremoniously canceled by mob rule, those natural resources in question will continue to be sourced from foreign suppliers that generate harmful pollution and human suffering.”

Outside influence is pervasive in Alaska, says Rebecca Logan, CEO of the Alaska Support Industry Alliance.

“It’s frustrating… there are two stories that come to mind. Number one is the Sierra Club and Center for Biological Diversity tried to intervene in the FERC [Federal Energy Regulatory Commission] decision on the Alaska gas project,” she says.

Such actions are not unexpected; in fact, Logan says they’re so common they’re almost part of daily life in the industry.

“Where it’s really frustrating is when people in Congress from other states step in and start getting involved in those discussions on Pebble mine, on ANWR, on pretty much overall resource development,” Logan says. “It’s like they’re trying to save us from ourselves, and certainly insinuating that the Alaskans who are up here working on these projects aren’t going to do it responsibly.”

The only way in and out of King Cove, located in the Aleutians East Borough, is by air or by boat.

Paul Dennler

But Logan says that in the ten years she’s been at the Alliance, this is the closest Alaska has come to developing the 1002 area.

“That’s why I think you see the intensity of the attacks increasing,” she says. “I can’t even remember so far how many bills we’ve had in the last year in the House to stop drilling in ANWR. They pass the House and they never make it to the Senate, but there have to have been at least ten this year.”

She’s also keeping a close eye on Ballot Measure 2, which would open Alaska’s primaries and introduce ranked choice voting, not because of the topic but because of the measure’s backers.

“I’m talking about dark money coming into the state, and it comes in all different forms,” Logan says. “One of my biggest concerns with Ballot Measure 2 is seeing who one of their first funders was, a Murdoch person [Kathryn Murdoch, daughter-in-law of media mogul Rupert Murdoch] whose number one issue is climate change. It’s really that ‘keep it in the ground’ strategy.”

Although the messaging has improved somewhat over the last year, Alaskans generally have not done a good job getting the message out that mining and development in the state is being done responsibly, she says.

“We all live here and work and play here in Alaska. We’re here for a reason. We love it. It’s beautiful and all the recreational opportunities. Nobody who lives here and works here is going to do something that would hurt the environment.”

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Road to King Cove

King Cove is a community of about 900 people in the Aleutians East Borough surrounded by soaring volcanoes and a deep-water harbor that is home to an important commercial fishery. It is also in the midst of a storm corridor, which frequently brings dense fog or high winds that can cut off the community for days at a time.

The only way in and out of King Cove is by air or by boat. Weather conditions shut flying down to about 100 days a year, according to Greg Hennigh, King Cove’s city administrator. It’s a two-hour boat ride to Cold Bay, the nearest community with an all-weather airport. People with medical emergencies must either wait and hope for the best or call in the Coast Guard for a risky medical evacuation.

Cold Bay has the third-largest airport in the state, a relic of World War II preparations in the Aleutians. But no road links the two communities, although King Cove has been trying to get one built for decades. King Cove community leader Della Trumble calls the road “a matter of life and death.”

Community leaders cite a number of fatal air crashes over the years, as well as risky medevacs in storms.

Hennigh says the community is looking at an 11-mile single lane gravel road with limited traffic. The US Fish and Wildlife Service says no go.

The problem is, any potential road would have to go through Izembek National Wildlife Refuge, which was designated as wilderness in 1980 under ANILCA. Izembek is an important stopover for Pacific brant, which fatten up on the refuge’s large beds of eelgrass before migration. It is also home to many other seabirds, caribou, and bears. Environmental groups say there is potential for harm to the brant and other wildlife, as well as the possibility the road could be used for commercial purposes, resulting in more traffic.

Alaska Senator Lisa Murkowski and Interior Secretary Sally Jewell sit with King Cove schoolchildren during a 2013 visit.

Laura Tanis

Hennigh says such concerns are unfounded. “Our whole point is Izembek is a special place. We respect the wildlife. We don’t have a problem with the hunters that come out. All we’re saying is look at this from a balanced perspective.”

Arguments for the road have become politically charged, he says.

“We have been chasing this for many, many decades,” Hennigh says. “We’re not asking for much and there’s been a few times we thought, ‘Okay, we’re finally going to get it.’ To be honest, what happens in the November election could be another change.”

On the state level, officials have generally been supportive. Every governor for the past twenty-five years, with the exception of Tony Knowles, has supported the road, as has Alaska’s congressional delegation, Trumble says.

“It should have been done a long time ago,” Trumble says. “It would have saved quite a bit of money.”

There are few roads already in the refuge, most of which date to World War II, Hennigh says. “If the war had lasted one year longer, there’d probably be a road all the way through.”

In 2013, Interior Secretary Sally Jewell accompanied Senator Lisa Murkowski to King Cove to listen to what the residents had to say about the road. Jewell heard stories from elders and children and then stood up and said: “‘I’ve listened to your stories, now I have to listen to the animals,’” Hennigh recalls. The whole community was stunned—and years after the fact, residents still find the comment to be incredibly insulting, he says.

“When you go way back, we are the Aleut people of King Cove,” Trumble says. “We’ve lived here for thousands of years only to have access taken away… It’s always been a part of who we are.”

Foundational Employment

Resource development, including oil and gas, has been the bedrock for Alaska’s economy for more than a century and creates what Rick Whitbeck, Alaska state director of Power the Future, calls “foundational employment” opportunities, especially in rural communities.

“Think about the locations in Alaska that have benefited from responsible development,” he says. “They still have their subsistence lifestyle. They whale hunt. They berry pick. And yet they have first world technology to get the oil.”

Also, he says, look at Red Dog Mine in the Northwest Arctic Borough. The world-class zinc mine is owned in part by NANA Regional Corporation and employs hundreds of shareholders, as well as provides millions of dollars in payment in lieu of taxes just like the oil industry on the North Slope benefits Arctic Slope Regional Corporation shareholders.

Those benefits are spread to other Alaska Native corporations statewide under the 7(i) and 7(j) revenue sharing provisions of the Alaska Native Claims Settlement Claims, Whitbeck says.

“Same thing will happen with Donlin,” he says. “Same thing will happen with Pebble where regional people are going to get employed. Hundreds, if not thousands, of them between those two projects. Those are success stories.”

“Think about the locations in Alaska that have benefited from responsible development. They still have their subsistence lifestyle. They whale hunt. They berry pick. And yet they have first world technology to get the oil.”  

—Rick Whitbeck, Alaska State Director, Power the Future

He then points to Healy and the Usibelli coal mine.

“Healy doesn’t exist without Usibelli,” Whitbeck says. “It may, but it certainly doesn’t thrive. That mine is 76 or 77 years old and has another 100 years of reserves. Our communities have been built up around resource development. Anchorage is a prime example, Nome is a prime example, Fairbanks is a prime example, and they continue to thrive because of resource development.”

Opposition to development in Alaska comes in large part from environmental non-governmental organizations based in the Lower 48 such as the Sierra Club, World Wildlife Fund, and NRDC, he says.

“Sierra Club and NRDC are never going to allow any development in Alaska without fighting tooth and nail,” Whitbeck says. “I’ll call them rich wildlife-over-human-life donors, people who have never met a responsible development project that they’ll ever agree with.

“They’ve fought everything, from roads, railroads, Prudhoe, TAPS, hydro projects. They fight everything that has even a hint of potential danger to the environment,” he added. “They’ll fight tooth and nail because they’d rather see Alaska as a national park, their private playground. They’ll never, ever allow Alaska to be fully developed under their watch, even though Alaska’s by far and away the most naturally resource-rich state in the country.”

Every governor of Alaska for the past twenty-five years, with the exception of Tony Knowles, has supported building a road to King Cove, seen in the distance.

Paul Dennier

10 Steps Forward, 100 Steps Back

One of the things the COVID-19 pandemic has brought to light is just how much the United States relies on China for rare earth minerals, which are widely used in technology, Logan says. Alaska is considered highly prospective for rare earth minerals, according to the Alaska Department of Natural Resources, with Ucore Rare Metals working toward production of a deposit on Bokan Mountain on Prince of Wales Island.

“We still have a long way to go, but I feel like a discussion around rare earth minerals that developed because of COVID, that is going to provide a lot of momentum for mining in Alaska.”

Often progress on Alaska development projects seems like taking ten steps forward and a hundred steps back, Logan says. “But I think that we’ve made great progress on ANWR and we’ve made great progress on Pebble. I never thought we’d be as far as we are with both of those.”

Alaska Business Magazine December 2020 Cover

In This Issue

What’s Worked, What Hasn’t, and What’s Next

December 2020

The novel coronavirus pandemic has required healthcare professional to take a long, hard look at our healthcare systems to determine what’s helping—and what’s hindering—their ability to deliver care. Alaska's Chief Medical Officer, Dr. Anne Zink, provides her insights on how Alaska needs to move forward.

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