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Basin 30 to 70 miles from TAPS Oil, gas development in Yukon Flats could bring prosperity to local villages; Doyon plans to move forward with, without land swap Alan Bailey Petroleum News
The draft environmental impact statement for a proposed exchange of land between Doyon Ltd. and the U.S. Fish and Wildlife Service in the Yukon Flats region of interior Alaska is out for public review. And, judging by the past controversy surrounding the proposed deal, comments should come a plenty.
“I anticipate we’ll get a lot of comments,” Fish and Wildlife spokesman Bruce Woods told Petroleum News. Jan. 30. “There are a lot of people with strong opinions on the issue.”
Fish and Wildlife will not take an official position on the land swap until it has received and analyzed the public comments, a process that could last until September, Woods said.
A deep sedimentary basin with petroleum potential underlies the Yukon Flats, an approximately 15,000-square-mile lowland area around the Yukon River between the trans-Alaska oil pipeline and the Canadian border. Doyon Ltd., the Alaska Native regional corporation for Interior Alaska has long been interested in developing oil and gas in that basin.
Native land selections Following passage of the Alaska Native Claims Settlement Act in 1971, Doyon made an especially large selection of Native land in the Yukon Flats, with the possibility of future oil and gas development in mind, James Mery, Doyon’s senior vice president, lands and natural resources, told Petroleum News Jan. 28.
“There are over 500,000 extra acres of Native entitlement in the Yukon Flats that could have been spread throughout the entire … area,” Mery said. “Three hundred and thirty thousand of those 500,000 acres went to six different villages.”
Then in 1980 the Alaska National Interest Land Conservation Act, commonly known as ANILCA, established the 8.6 million-acre Yukon Flats National Wildlife Refuge within the region. The refuge boundary actually enclosed a total land area of about 11 million acres that included about 2 million acres of the earlier selected Native land.
Following an assessment of some seismic data shot by Exxon and Texaco in the 1970s and 1980s, Doyon decided to try to exchange some of its land within the refuge boundary for refuge land over the deepest and most prospective part of the Yukon Flats basin. Negotiations between Doyon and Fish and Wildlife resulted in a 2005 agreement in principle for a land swap.
Under the terms of that agreement Doyon would acquire about 110,000 acres of surface and subsurface land, and an additional 97,000 acres of subsurface oil and gas rights. The refuge would acquire a minimum of 150,000 acres of Doyon full-fee land. Doyon would also reallocate about 56,000 acres of remaining entitlement within the refuge to locations outside the refuge.
Fish and Wildlife would also have the right to some revenues from any future Doyon oil and gas production, to purchase up to an additional 120,000 acres of Doyon land within the refuge boundary.
Resource estimates In 2004 the U.S. Geological Survey assessed the Yukon Flats basin and concluded that there might be 173 million barrels of oil and 5.5 trillion cubic feet of natural gas in the basin. A more recent assessment for Doyon by Petrotechnical Resources of Alaska has upped the ante by suggesting that the basin may hold from 300 million barrels to almost 1 billion barrels of oil, and perhaps 15 trillion cubic feet of conventional natural gas (see part one of this article in the Feb. 3 edition of Petroleum News).
A prospective part of the basin is just a little over 30 miles from the trans-Alaska oil pipeline, while the deepest part of the basin is about 70 miles from the pipeline.
And with oil prices hitting $100 per barrel, Doyon is anxious to move ahead with oil exploration. In fact, at current oil price levels the corporation wants to proceed with exploration in its current acreage, regardless of whether the land swap takes place, Mery said.
Revenues from oil or gas production on Doyon land would result in dividends to the corporation’s Native stockholders, many of whom live in the Yukon Flats region. And 70 percent of the money would flow to other Native regional corporations, under the natural resource revenue sharing provisions of the Alaska Native Claims Settlement Act.
In common with rural communities elsewhere in Alaska, Yukon Flats villages are suffering from the impact of escalating fuel prices. Dividend income and an influx of oil and gas related jobs could revive the fortunes of these communities. And the villages of Birch Creek, Beaver, Stevens Village and Fort Yukon, for example, are close to some of the deeper sections of the basin.
“I think that jobs and opportunity can bring people back to the village. I support this oil and gas development,” Paul Williams Sr., second chief of Beaver, has said.
“I think it’s a good opportunity for us,” said Winston James, first chief, Tihteet’all Inc. Board member, Birch Creek. “It will strengthen our communities and improve our educational opportunities. That is why I support Doyon in this venture.”
“The Yukon Flats is really important to me,” said Craig Fleener, former CEO of the Council of Athabascan Tribal Governments, Fort Yukon. “I thought long and hard about oil and gas development (and) made list after list of pros and cons. Certainly there are some cons, but you can never do anything good without taking a chance. I think it is a chance worth taking.”
Environmental impacts But, with concerns about the potential impacts of oil development on the environment and the subsistence way of life in the region, there has also been vociferous opposition to the land swap proposal.
“The Gwich’in people of the Yukon Flats have been dependent on the resources provided by this land for thousands of years,” said Dacho Alexander, first chief of the Gwichyaa Zhee Gwich’in tribe in Fort Yukon, in a press release published Jan. 23 by the Gwichyaa Zhee Gwich’in tribal government and several environmental groups. “We are acutely aware that even a minor spill could have devastating effects on the fragile ecosystem, not only here in the Yukon Flats, but along the entire Yukon watershed.”
“Oil and gas development are not compatible with the purposes for which the Yukon Flats National Wildlife Refuge was established,” said Nicole Whittington-Evans, director of the Wilderness Society’s Alaska Refuge Program. “The U.S. Fish and Wildlife Service itself has acknowledged this in the past. Development poses a threat to water quality, fish and wildlife habitat, subsistence cultures, and the wilderness and recreational values of the refuge and its adjacent public lands.”
In fact the draft EIS acknowledges that any oil and gas development in the Yukon Flats would result in some alteration of wildlife habitats and other environmental impacts.
But the draft EIS also says “there would be a net gain (to the refuge) of water bodies and fish habitat, high value waterfowl habitat, wildlife habitat, aquatic mammal species, known cultural resource sites, and lands for subsistence use.”
Fish and Wildlife would end up administering more land, with some consolidated surface ownership and reduced refuge boundaries, the draft EIS says.
Mery pointed out that Doyon will likely proceed with oil and gas development on its existing lands, even if the land swap does not happen. Then, under the terms of ANILCA, Doyon would have the right to cross refuge lands, including the lands that the corporation would have gained in the land swap, to develop the corporation’s oil interests on Doyon land.
So, Mery sees the land swap as a gain to Fish and Wildlife, regardless of whether oil or gas is ever found in the Yukon Flats basin.
And to address subsistence concerns Doyon funded a $230,000, Fish and Wildlife-designed study into the subsistence use of land within the refuge for the EIS, Mery said.
“One of the things that was clear to us at Doyon was that there was not any good recent data on subsistence uses in the Yukon Flats,” Mery said.
That survey has shown that most of the subsistence use occurs along the river and creek system, Mery said. In particular, there is little subsistence activity in the prime area of potential oil and gas development in the south-central part of the area. Doyon land involved in the swap also sees little subsistence use.
Moreover, land transferred to Fish and Wildlife would remain available for subsistence hunting, with a priority for rural hunters, Mery said.
Loss of land Some residents of the Yukon Flats have expressed concern that under the terms of federal land valuation rules the Native corporations would relinquish a larger area of surface land than they would gain.
“We’re already checkerboarded and our land is rapidly leaving Native hands,” Gary Lawrence, executive director of the Gwichyaa Zhee Gwich’in Tribal Government, told Petroleum News in 2005. “We believe we’re losing our Native land base within our traditional territories.”
But Mery said that the exceptionally large land selection that Doyon originally made in the Yukon Flats in anticipation of the area’s oil and gas potential more than compensates for any net surface acreage loss as a result of the land swap.
“Those are 330,000 acres of surface that the villages own that could have gone someplace else. … So they were already way ahead of the game before we started this,” Mery said.
It is also Doyon policy to require any potential developer to work out surface use agreements with the villages for access to Native-owned surface land, he said.
Land sale Some Yukon Flats residents are particularly concerned about the part of the land swap agreement that involves potentially selling up to 120,000 acres of Doyon land to Fish and Wildlife if oil and gas is developed.
“They really didn’t like this sale notion,” Mery said.
To allay this concern, the draft EIS includes an option, supported by Doyon as an alternative action, to grant immediate conservation easements to Fish and Wildlife on that 120,000 acres. Thus, instead of this land transferring to Fish and Wildlife, the land would remain under Native ownership but would be protected from oil and gas development.
But that easement agreement would go into effect, regardless of whether any oil or gas is ever developed on Doyon land — under the proposed action, as in the 2005 agreement, the additional 120,000 acres would not be impacted unless oil and gas is developed.
In addition to that proposed action and the alternative involving the conservation easements, the draft EIS considers two other alternatives. One of these alternatives consists of a land swap involving a reduced land area, to exclude two areas previously recommended for wilderness designation. The other alternative is for no land swap to take place.
And Doyon supported the EIS development, even though there was no legal requirement to do the EIS, Mery said.
“There is a full blown EIS process because we listened to a lot of our shareholders (supporters, opposition and those on the fence) who a couple of years ago thought that the process was moving too quickly and that more study was needed,” Mery said.
The draft EIS is out for public review at http://yukonflatseis.ensr.com/yukon_flats/default.html. Comments are due by March 25.
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