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Vol. 12, No. 26 Week of July 01, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Balancing development, cultural values

ASRC president: North Slope development benefits residents; important to preserve values, sustainable Arctic environment

Alan Bailey

Petroleum News

Speaking on a general theme of “developing resources while honoring the past” at the June 19 annual meeting of the Resource Development Council, Bobbi Quintavell, president of Arctic Slope Regional Corp., described ASRC’s delicate balancing act of encouraging the economic benefits of industrial development while respecting the traditional values and culture of the Native peoples of Alaska’s North Slope. ASRC is the Native regional corporation for the North Slope.

Following a poignant introduction in her Native Inupiat language, Quintavell gave an ASRC perspective on oil, gas and other resource development.

“I want you to know that honoring our past is vital to us in the Alaska Native community. As corporate leaders in our state our past and our traditional values are what guide us each and every day,” Quintavell said. “… At ASRC we are not only focused on our past, we are working towards adapting to the changes that we see on our horizon.”

Pro-active

ASRC is trying to proactively deal with the changes that are occurring on the North Slope, with the intent of benefiting the economic freedom of its shareholders.

“These are times when we really need to be involved in the processes of change and the processes of the projects before us,” Quintavell said, “not as naysayers, because we are afraid of change, but as contributors to guide the changes on the way. We need to find ways to control how we can minimize through mitigation the impacts to subsistence and traditional ways of life.”

But Quintavell cautioned that everyone needs to understand the importance of the Arctic way of life to the Native communities of the North Slope.

“We want to try to make you aware that, while we see the benefits of this type of development from revenue, jobs and improved infrastructure, those benefits do not come without a cost to the Inupiat people who live off the land,” Quintavell said. “… My perspectives are shaped both by the economic reality of growing a sustainable local economy in the area and by the fundamental human desire to ensure that my children who come after me will have a livable and prosperous natural habitat.”

ASRC has become a successful and profitable entity that blends traditional Native values with business values, Quintavell said.

“Thirty-plus years ago we were told that Natives could not be good business people,” she said. “We have worked very hard over those years to prove that theory wrong.”

Excitement

And there’s great excitement about potential new developments, especially a North Slope gas line and the development of massive coal reserves near the Chukchi coast, she said.

A need for clean energy and electrical power is driving the need for more natural gas, and the Alaska Gasline Inducement Act will now provide a framework to set a North Slope gas line project in motion, Quintavell said.

It’s an uphill problem “but from where I stand in Barrow I must say it looks all downhill from here,” she quipped, alluding to events over the past couple of years.

Increased gas exploration will lead to more jobs and long-term economic viability for Alaska. And the availability of reliable supplies of reasonably priced natural gas would spur new industrial opportunities in Alaska, Quintavell said.

High-quality North Slope coal deposits, perhaps approaching billions of tons, present other energy development possibilities, Quintavell said. ASRC has worked for many years to form an agreement with BHP Billiton to move forward with the Western Arctic Coal Project, a plan to develop coal deposits that lie immediately inland from the Chukchi Sea coast, she said. BHP has been exploring for coal in the area, as well as assessing development and production concepts.

“What I am really excited about are the economic opportunities for the villages of Point Lay and Point Hope … as a result of our agreement with BHP,” she said.

That agreement obligates BHP to enter into agreements with Point Lay and Point Hope, to build economic stability in those communities.

“We are watching the process closely but so far all we see is success,” Quintavell said.

Quintavell also said that expansion of the De Long Mountain terminal near Kivalina, the port for the Red Dog zinc and lead mine, will prove critical to the Western Arctic Coal Project.

But Quintavell dismissed accusations by some that ASRC is pushing the Western Arctic Coal Project as a piece of corporate exploitation. Developing the coal will provide a very slim economic return for ASRC but has a real potential to provide a long-term economic base for the North Slope region, she said.

Section 7(i)

Quintavell also explained to the largely business audience at the RDC meeting about the ramifications of Alaska Native Claims Settlement Act Section 7(i), when negotiating a resource development opportunity with an Alaska Native corporation. Section 7(i) requires a regional corporation that earns revenue from resource development within its lands to share 70 percent of that revenue with the other regional corporations.

“If I were to allow this opportunity to pass without sharing some perspectives about 7(i), necessary for you to develop a better understanding of our behavior, I would feel remiss in my obligations to you,” Quintavell said.

More than two-thirds of the revenues shared under the Section 7(i) provision have come from just two regional corporations, ASRC and Sealaska Corp., Quintavell said. Cook Inlet Region Inc. has also distributed significant revenues under Section 7(i).

“This is an important point to understand because you need to realize that when you are negotiating with an Alaska Native corporation for exploration or development options on their land, that the Alaska Native corporation is not receiving 100 percent of the benefits of that finalized agreement,” Quintavell said.

That tends to make the Native corporations somewhat passive about resource development in their lands — corporations will generally enter into traditional lease relationships with developers, but with significant emphasis on the non-revenue bearing aspects of any exploration or development agreement, Quintavell said.

Pro-development

But Quintavell emphasized that ASRC supports resource development as part of its mission to ensure economic and cultural freedoms for its shareholders. And, so far, it appears that economic gains have not happened to the detriment of the cultural values that also underpin those freedoms.

“The development that has taken place in the Arctic over the last 30 years has truly enhanced our lives,” Quintavell said. “Certainly life in our communities in the Arctic has improved, with health care, housing, sanitation and education. I would like to tell you that the habitat we rely on for our subsistence resources has been well respected by the industry occupying that same space with us. Not only have they respected the land but they have also respected the people who live there and worked with them to solve challenges presented by the environment in which we live. Granted there have been some mistakes but lessons have been learned. … It appears to me that we are doing a good job of ensuring economic and cultural freedoms for the Inupiat people.”



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