Mikkelsen A., Langhelle O. (eds.) Arctic Oil and Gas. Sustanability at Risk?

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communities, and how they can protect their identity and culture. They connect

these issues to subsistence activities.

One female Inupiat says:

Local people very much define themselves and the future they hope for in

relation to the traditional subsistence way of life. People talk about jobs and

incomes, but the kind of thing that people will talk about in terms of hopes

and dreams, their sort of identity and their sense of being the authors of their

own future, is very much focused on providing stability and continuity in the

subsistence way of life.

These people emphasize the social organizational features of the subsistence

livelihood in which generations are integrated, the role of elders and the young,

and sharing practices where foods are widely shared between producing house-

holds and recipient households.

As an argument for development and against this way of thinking, others are

rhetorically asking if this is the kind of life the Native people want to go back to –

a community without money and with no modern equipment at all. They speak

loudly about all the blessings of the new life: ‘Earlier people used blubber for

heating fuel, so there have been some benefits from the industry.’

Many local people are looking for some middle ground where there is some adop-

tion of modernity, but they do not want to have the cultural shift forced on them faster.

The Native people do not want to be a theme park for other people to look at.

First and foremost, we want a right to self-determination. We do not want to

turn in our snow machines, rifles, whaling bazookas. But if we were to go

back – what would we do? Adaptation has always been a part of us. Also,

others are allowed to change, why shouldn’t we be?

The NSB advocate safe and responsible development and say: ‘This is the only

economy we have.’

An ASRC employee highlighted the need for a paradigm shift with young people:

People tend to see a conflict between the Inupiaq way of life and work in the

industry – but a blend is desirable. We are victims of that conflict. And we

don’t want to end up like those disenfranchised people you see elsewhere in

the world. There is a collision of cultures. Sometimes it’s perceived as oil and

vinegar – ‘please don’t touch our lifestyle’. The demand to stay the same is

present both within the community and from the outside.

He continues:

But what would happen if we stayed the same? We would be something

like Disney World where people could come and look at us. There is a

desire to protect our way of life, but we need to balance protection with

156 Aslaug Mikkelsen, Sharman Haley and Olaug Øygarden

Expanding oil and gas activities on the North Slope of Alaska 157

allowing development. There is conflict around this in the community, just

like in any culture.

The mixed economy

The pure subsistence economy does not exist any more. However, as we have

described, in terms of culture and individual and group well-being, identities, and

social well-being, subsistence is extremely important, even if you have a paid

job. With groceries costing twice as much as in urban Alaska, many people need

the food from the subsistence activities to maintain a decent living standard.

Some of the Natives can live by a combination of corporation dividends,

Permanent Fund Dividends and subsistence activities, but this is very little

compared to the costs of living. Other people do not receive dividends and

rely on social aid. In some villages, as much as 50 per cent of the people need

social aid to pay their bills.

The economy that is described by all the informants is a mixed subsistence-

based economy where the cash comes primarily from the oil and gas activities

through the NSB. A consultant says that what people want is relative stability

in this hybrid or mixed economy. Many Natives, both in the NSB and in the

corporations, and the local authorities also hold this view. Within this mixed

economy, the Inupiat people embrace the new technology, and use it in their hunt-

ing and their daily life. An Inupiat said: ‘We will use the satellite to find the

whale, but we will use our traditional seal skin boats to paddle out to the whale,

but then, in order to kill the whale faster so that it doesn’t suffer, we will use a

bomb.’ They want to maintain their subsistence activities in a modernized way,

and this has an oil dependency built in to it. Faced with the reality of the mixed

economy, many Inupiat people are looking for a compromise with the industry.

The industry is also adapting to the need of permits and demands on environmental

and social assessments, and mitigating activities for maintaining their license

to operate.

What are the social effects of the cash economy?

Introducing corporations and money into the traditional subsistence communities

created Native business people, Native shareholders and Native employees. A

main story line about this new characteristic of the society was ‘you share subsis-

tence food, but you do not share your money.’ Some people in the industry talk

about the Natives and their ability to adapt to this new way of life, and claim that

the influx of cash has led to abuse and westernization – money simply ‘isn’t good

for them.’A representative of a village corporation pointed out another issue, and

claimed that money and job competition has introduced new tensions and jeal-

ousy. Also, not all Native villagers have shares in the ANCSA corporations. One

informant claimed that this has led to new class differentiations.

The success of the ANCSA corporations varies across villages and regions. Some

of this variation may be connected to the location of the resources or industry, but

158 Aslaug Mikkelsen, Sharman Haley and Olaug Øygarden

it may also be explained by human agency. One academic described the leaders

in the ANCSA corporations as exceptional men who live in two worlds. They

have urban clothes and travel in jets, but they still have their traditional values,

and often combine their corporate jobs with being respected whaling captains.

Owing to the oil and gas activities at the North Slope, the ASRC has been

successful and, in terms of cumulative dividends paid, ranks second among the 12

ANCSA regional corporations. At the other end of the spectrum, the Calista

Corporation in southwestern Alaska has only paid dividends twice, a cumulative

total of US$49 per shareholder. One informant said: ‘ANCSA made a community

of those who have and of those who have not – it has created a very different

social structure.’ For the oil companies who come in to these communities, stake-

holder engagement is the tool that is used to prevent further negative impacts on

the societies.

The village of Nuiqsut illustrates the dilemmas of modernization (see Textbox 7.5).

Textbox 7.5 The two stories of Nuiqsut

Nuiqsut, population 417, is the North Slope village that has been most directly

impacted by the oil and gas activities. With the Alpine facility and later the

Alpine Satellites, development has moved closer and closer to the village.

The story of Nuiqsut is a contentious one. The Colville Delta has tradition-

ally been a gathering and trading place for the Inupiat and has always offered

good hunting and fishing. The old village of Nuiqsut (Itqilippaa) was aban-

doned in the late 1940s because there was no school. The village was reset-

tled in 1973. A school, housing and other facilities were constructed by

federal agencies in the summer of 1973 and 1974; goods were hauled from

Barrow by tractor and snow-machine. The City was incorporated in 1975

(see http://www.commerce.state.ak.us/dca/commdb/CF_COMDB.htm). One

narrative about the establishment tells of a group of 27 families who traveled

from Barrow across the tundra in the middle of the winter to claim their tradi-

tional hunting grounds as their own land under ANCSA. They established

Nuiqsut and lived there in tents for the first 18 months. Part of the reason why

they moved was because they wanted to get back to the old ‘Eskimo life.’

Other informants hold a different view. They see the establishment of Nuiqsut

as a strategic move into an area near Prudhoe Bay where oil had already been

discovered. Other aspects of the locale were not taken into consideration, and

the result was a village situated at a remote spot where it is hard to provide

employment and sustain a local economy.

The past is not the only contentious theme in Nuiqsut. Today, there is a

conflict between the local community and the ‘oil people’ and the impacts

they have brought. The impacts, as the community sees them, range from

the displacement of caribou, to dramatic increases in administrative work

for the City, to increases in substance abuse because ice roads built for the

Expanding oil and gas activities on the North Slope of Alaska 159

oil facilities make drugs and alcohol more accessible. The oil companies,

and to an extent other villages, tell a story of Nuiqsut as a village who has

gained a lot from the presence of the oil industry, in terms of financial

reward and employment.

The Native village corporation, Kuukpik Corp., has 212 shareholders

and a turnover of more than 10 million dollars a year. They own surface

rights to land around the village, and have subsidiaries that compete for

contracts in catering, transportation, security, and construction work among

other things. They pay dividends to their shareholders every year, and also

provide scholarships, training programs, and local employment. Through

skilful negotiations with the oil companies who needed their land for

development, they managed to get deals where they are treated essentially

as subsurface owners, meaning that they get royalties from production.

This is seen by some as an example of how a small community can stand

up to the industry and get advantages from industrial activities.

This success story is again countered by the social problems that

Nuiqsut is facing. Unemployment, substance abuse, mental health

complaints and the lack of educational opportunities are widespread.

Cultural disruption is also an important issue:

The next thing is a conflict between American culture and Native

values. You have satellite TV, you know, you want modern appliances,

everything, you know. You want to have a faster snow machine, a

bigger boat, a bigger jet boat to get up the river further to hunt. Well,

it takes gasoline and it takes money. You’ve created, what was a subsis-

tence economy, and converted into subsistence and cash economy,

both. But without a driving engine to provide cash. The next thing is,

you’ve changed the cultural values of the villages to some extent. It

used to be the hunters were, you know, you quit your job and you went

off and you went hunting.

Both representatives from the Native population and non-Native

employees of the NSB state that the ‘communities need to take control of

their own lives, they need empowerment.’ They need to look at the oil and

gas activities as opportunities. These statements are signs of another

conflict that Nuiqsut is facing, a conflict between a village that to an extent

sees itself as a victim of oil and gas, and others on the North Slope who see

them as people not valuing the opportunities they have been given.

160 Aslaug Mikkelsen, Sharman Haley and Olaug Øygarden

Is the cash economy sustainable?

Compared to the issue of balancing subsistence issues against industrial activities,

there is little discussion of whether the cash economy is sustainable. The living

standard on the North Slope rose dramatically as a result of the oil and gas activities.

The level of costs of living rose to a formerly unknown level, and the changes in

the economy, livelihood and institutional framework during the last 30–40 years

are comprehensive and irreversible.

However, the North Slope communities are not alone in this: the state economy

as a whole depends on oil revenues and federal transfers. An environmentalist

from the ‘Lower 48’ States commented on this and claimed that the majority of

Alaskans have to get away from being spoiled, reliant on the federal government,

the industry and the exemption from income tax.

Can the economy be diversified? Increased access to remote areas in the Arctic

could under some circumstances mean increased opportunities for entrepreneurship

or other local businesses like tourism, commercial fishing or guided hunting. It can

be argued that the North Slope environment is too vulnerable for allowing those

kinds of activities. Access can increase the possibilities for local abuse, and create

access for tourism to an extent that can be harmful. One informant compared the

heavily regulated access for oil companies and access on a general basis, which

could mean destroying the carrying capacity and the remoteness of the area.

Fate control

The Arctic Human Development Report frames the issue of fate control as a

central concern of Arctic people. This theme was prominent in our interviews in

Alaska. Stakeholders on all sides of the oil and gas development seek a compati-

ble mix of subsistence and development, but local stakeholders question how

much control they have over the mix. A regional official said that, if development

is going to occur, local stakeholders need to do better at taking advantage of the

opportunities so that they can continue to engage in subsistence activity. He

thought that there is room for both as long as sustainable development has done

minimal damage to the patterns of the animals or the land.

How this desire to have development yet maintain some local control over how

the impacts play out on the ground is illustrated by three stories: the NPR-A

Subsistence Advisory Panel; habitat protection around Teshekpuk Lake in the

NPR-A; and conflict avoidance agreements in the Beaufort Sea.

NPRA Subsistence Advisory Panel

During the preparation of an EIS for oil and gas leasing in the Northeast NPR-A

planning area in 1998, the Bureau of Land Management (BLM) convened subsis-

tence workshops in the regional centre of Barrow, and in Nuiqsut, the village

most directly affected by the proposed leasing program. Local residents expressed

frustration with ongoing impacts of oil and gas development on subsistence and

on the lack of channels for local interests to be heard. For two decades, public

Expanding oil and gas activities on the North Slope of Alaska 161

meetings held by the Minerals Management Service concerning offshore oil and

gas leasing resulted in widespread public testimony that subsistence resources were

being affected, subsistence harvest practices were impacted and local concerns

were ignored. Following a process of facilitated public dialog, BLM Northern Field

Office staff developed detailed recommendations for a Subsistence Advisory

Panel (SAP). The functions of the SAP include reviewing lease plans and provid-

ing recommendations on safeguards and mitigation measures, keeping local

communities informed of leasing and exploration activities, recommending plan-

ning, research, monitoring, and assessment activities to protect subsistence, work-

ing with agencies to maintain a repository of subsistence information, and serving

as a clearing house for subsistence research in NPR-A. Since its establishment in

1999, many regular meetings have been held, and members express satisfaction

with improvements in information exchange, and communication between the

communities, agencies and industry. No significant disputes have arisen

(McIntosh and Brelsford, 2006). Several informants supported this evaluation but

the locals are still not satisfied with the situation for subsistence activities.

An important factor in this story is the actions of federal agencies. In the late

1990s, under the Clinton administration, the Secretary of Interior Bruce Babbitt

wanted to preserve ANWR by redirecting attention for oil and gas development

to the NPR- A. This resulted in a new leasing program for the central portion of

the North Slope in 1998. Informants assess consultation with the communities on

subsistence hunting issues to be a distinct feature of the environmental review

under Secretary Babbitt. It was recognized as innovative and very much beyond

the norm in federal land management at the time. It is seen as the high point of

consultation and a very serious effort to avoid impacts on subsistence users.

However, in 2003 and 2005 under the new administration, Secretary Norton

decided to go back and revisit that leasing program and to change some of the

measures that were intended to protect environmentally sensitive areas and

important subsistence areas.

Teshekpuk Lake

Teshekpuk Lake is an important wildlife habitat area, including calving grounds

for the Central Arctic caribou herd and wetlands for migratory waterfowl. The

geography of the area is shown in Map 7.2. The Borough land use management

plan designated Teshekpuk Lake as a protected area owing to its high value as

wildlife habitat and its importance for subsistence for people from Nuiqsut,

Atqasuk, and Barrow. The BLM plan for NPR-A initially followed suit and clas-

sified Teshekpuk Lake as a special protection area where no leasing was allowed.

A decade later however, the new federal administration, over the unanimous

protests of people in the region, cut the protected area in half and opened the rest

to development under performance-based environmental standards. The lease sale

was temporarily blocked, however, by a federal judge who, in response to a

lawsuit brought by a coalition of environmental organizations, ruled that BLM

had not considered the cumulative effects of development.

162 Aslaug Mikkelsen, Sharman Haley and Olaug Øygarden

The communities felt that the federal government was going back on its word:

the areas that had been excluded were suddenly up for renegotiation. This was a

matter of great frustration and concern in the North Slope communities. The

NSB, for instance, had not been fully satisfied with the 1998 plan, and were

strongly opposed to the inclusion of the areas they saw as environmentally sensi-

tive and central to subsistence. The informants’ conclusion on this is that the

Map 7.2 Teshekput Lake.

Expanding oil and gas activities on the North Slope of Alaska 163

legislative protections are fairly weak. Section 8–10 in the Alaska National

Interest Lands Conservation Act does ensure public notice and analysis of

impacts, but it does not go further to guarantee protection. The protection of these

subsistence uses really comes from the political mobilization by the local commu-

nities, if and when they develop their own scientific and technical arguments.

The NSB is recognized as a capable actor in doing this. According to an NSB

employee, the battle for what alternatives should be considered is an important

part of the planning and permitting process. The fate of the McCovey-project and

the conflict over the Nuiqsut bridge have already been described. Another exam-

ple is the collaboration with the AEWC in opposing the whaling ban.

Conflict avoidance in the Beaufort Sea

The village of Kaktovik, as all the other villages on the North Slope, is strongly

opposed to exploration in the Beaufort Sea. During the summer of 2006, eight

companies shot seismic in the Chukchi Sea and the Beaufort Sea. This is in

federal waters; Native people and the NSB do not have authority to stop the activ-

ity. However, the environmental and subsistence protection system does give the

Native people a position to negotiate. The executive director of the AEWC says:

‘we have to take advantage of the situation and – because you cannot stop the

offshore activity we have to use the situation and be specific on the demands to

the industry.’The tools used are Conflict Avoidance Agreements (CAA) and Good

Neighbor Policies (GNP). Representatives from the NSB also argue that they will

use their position to negotiate:

Offshore the development is going to happen, there is no moratorium on the

ocean here, and we don’t want to fight it in court where we would probably

lose anyway, so we try and influence it before it happens – make development

that is considerate of our concerns.

According to an NSB attorney, a CAA is not mandatory (although the AEWC

claims that the federal government requires it), but is encouraged by the govern-

mental agencies in charge of the permitting process.

Companies like Shell, ConocoPhillips, and GX Technology Corporation are

active and are trying to get the permit to shoot seismic. To do this they are nego-

tiating a CAA with the villages. An academic comments on this situation saying:

‘The CAAs are an example of the stakeholders themselves negotiating with

industry, and the agreements are good.’

A CAA is an agreement where whaling and oil activities are scheduled in such

a way that they don’t interfere with each other. When there are several operators

in the water at the same time, these agreements become very complicated. In

2006, six different companies signed a programmatic agreement. According to

the AEWC, factors included in the agreement are charity contributions to the

AEWC for the establishment of communication centers with 24 hours on duty

dispatchers in the villages, funding for a search and rescue services, and VHF

164 Aslaug Mikkelsen, Sharman Haley and Olaug Øygarden

radios for the communities, whaling boats, and seismic ships. A contentious issue

is how extensive the marine mammal monitoring done by the operating compa-

nies should be. Every ship should have an observer on the deck so that activities

can cease if mammals are seen. Shell has agreed to do monitoring from the air as

well. The AEWC wants hydrophones to be included as part of the monitoring.

By April 2006 the AEWC had reached a CAA with the whalers in Kaktovik,

Nuiqsut, Barrow, Wainwright and Point Hope. By May, however, Kaktovik was

feuding with Shell over its plans for offshore seismic exploration. Kaktovik’s City

Council passed a resolution calling Shell a ‘hostile and dangerous force’, and

authorizing the mayor to take legal or other actions necessary to defend the

community. In a news release issued with the resolution, Mayor Lon Sonsalla said

Shell had failed to address village concerns about how it would keep seismic test-

ing scheduled for this summer from disturbing migratory bowhead whales and

how the company would operate safely in unpredictable sea ice. ‘Instead of tech-

nical staff or people with authority, they send public affairs. Instead of true

consultation with community leaders on substantive issues, they try to schedule

superficial social gatherings where they can talk at us’ (Anchorage Daily News,

May 24, 2006). Kaktovik’s May 9 resolution said Shell ‘has ignored our advice’

and called on all North Slope communities to oppose Shell’s work on its offshore

leases until it establishes a respectful relationship with the indigenous people.

One informant without specific ties to Kaktovik commented on how Shell had

contacted the village for consultation very late in the process, and that this might

be an important background for the skepticism.

Balance of power

A representative from the Alaska Native Science Commission (ANSC) says:

ANCSA came into being because the US wanted access to the oil on the

North Slope. The good thing is that it brought us, the Native community, two

things – land and money. And if you have land and if you have money, you

have power.

Locals question whether the parties are on an equal footing in negotiations. An

NSB bureaucrat says defensively: ‘People are going through a transition, and oil

holds them hostage all the time.’ A more offensive attitude toward the industry

is held by a village corporation manager: ‘The threats that the companies will

leave the state when the Native companies negotiate on finding environmental

and society friendly solutions – when these are not the cheapest ones, get people

frustrated.’ Philanthropy can also be used as leverage, such as in Nuiqsut:

ConocoPhillips has not given money to their annual festival this year, and people

in Nuiqsut are convinced it is because they are in conflict over the bridge issue.

A Native informant said that the people on the North Slope tend to be non-

confrontational. ‘It’s a cultural trait. So, when people push, [we] have a habit of

giving. But then we push too.’

Expanding oil and gas activities on the North Slope of Alaska 165

There are strong and emotional responses to the questions on environmental

effects of the oil and gas industry. NSB bureaucrats say that the environ-

mental community uses the legal system to force the industry to follow the

environmental laws. If the industry fails to meet the requirements in environmen-

tal laws, however, the laws are changed! They hold the opinion that it partly comes

down to economics – industry claims it’s too expensive to follow environmental

requirements. The Nuiqsut bridge was used by informants as an example of this.

Some informants do not see that the Inupiat can have a more central role in the

oil and gas activities: ‘Some of the Natives will not appreciate the accommoda-

tions they will have to make. Since they do not participate in the cash economy

by paid work, they will not see the benefits.’ A consultant to the NSB did not see

this as a ‘system failure’ but as a private individual choice: ‘This non-participa-

tion is a personal lifestyle choice.’

All together, it might be hard to convince local stakeholders that they have much of

a choice. A mayor says: ‘The oil and gas activity is closing us in – Alpine is becom-

ing a spaghetti and it is barricading us. It is limiting our access to hunting ground.’

Arctic National Wildlife Refuge

To open ANWR or not?

The ANWR debate has a unique constellation of vocal stakeholders. The question

of opening the coastal plain of ANWR to oil and gas activities has generated

national and state-wide debate for decades. The Alaska Coalition is a major player

on the conservation side of the debate. Arctic Power, an NGO funded with a mix

of private and state money, voices the position to open ANWR. They get their

main support from the Republicans, and they report that their ‘case is dead if the

Congress is Democratic.’ A consultant for Arctic Power differentiates between

offshore and onshore activities for the possibility for having support of the Native

people. ‘If you’re talking about ANWR ... you get a lot of support.’

The debate on opening ANWR does not only contain arguments on impact on

subsistence living. One of the main arguments is that oil from ANWR will

increase the energy supply, supply security and price stability for the United States.

On the other side, the argument that the oil will go to the Far East, to Japan and

China, has been used against developing it. A consultant for Arctic Power says:

There have been a lot of false arguments on both sides in this debate. In my

view this effect on gas prices is also false. What it would do, it might change

the prices of gasoline in pennies, no more. But, what it would do, I think,

would be to get rid of the real spikiness.

Another informant also talked about distorted facts:

ANWR is used by the environmental groups. They push the ANWR button

whenever they want to raise money. I personally think that they have