Alaska Natives poised to cash in on drilling
Jill Burke |
May 23, 2010
Several Alaska Native corporations with shareholders living on the North Slope stand to collectively earn more than $100 million in contract work if Royal Dutch Shell is allowed to proceed with offshore oil drilling this summer. Depending on which battle cries in the offshore drilling debate you side with, opening the Arctic Ocean to oil exploration and development will either save or endanger the way of life of Alaska Natives along the state's northern coast. Native-owned corporations partnering with Shell are staunch supporters of the oil company and its willingness to do business with locals, while many village councils are convinced the environmental risks aren't worth the financial rewards, regardless of how great. "These businesses have collectively earned more than $127 million to date and stand to earn millions more if the 2010 project moves forward," said Peter Slaiby, vice president for Shell Alaska, in a statement filed during a recent court challenge to the company's summer drilling plans. Eight Alaska businesses, many Native-owned, are hoping to provide engineering, inspection, emergency response, catering and other services, according to Slaiby. Delay drilling, and you jeopardize these jobs and future earnings for Alaskans, he warned. The village of Point Hope is among a handful of communities that loudly oppose oil and gas exploration, waging court battles to thwart industry's presence in the region. The village recently lost a challenge to Shell's drilling plan in a federal appeals court. Arguments in the case exposed deeply divided perspectives on the risks and rewards of drilling, with local councils and their corporations at times pushing in opposite directions. In the case, Shell's allies on the North Slope swooped in to defend the company. Those "friend of the court" filings reveal Shell forging a symbiotic relationship with Native corporations from the coastal villages. In sharp contrast to its village's tribal leadership, which has long fought to keep industry at bay, the Native-owned corporation in Point Hope is among Shell's supporters. Shell's plans "will benefit, not harm, Native Alaskans," urged Tikigaq, the village corporation for Point Hope, in unison with the much larger Arctic Slope Regional Corp., which has shareholders living across the North Slope. "Such responsible oil and gas development is critical to our shareholders' lives in rural Alaska because the jobs and tax revenues generated by oil and gas activities play a significant role in supporting crucial state and local services, such as education, roads, power, sanitation, and health care," the Native corporations noted. If Shell is allowed to drill, Tikigaq stands to earn $5 million in revenue through contracts in support of the operation, while an ASRC subsidiary is poised to earn $8 million to $10 million in revenue annually through contracts with Shell. ASRC and Tikigaq's contracts combined are projected to create about 100 jobs and $2 million in annual wages for Alaska Natives, who may land jobs as marine mammal observers on ships, public relations officers, subsistence advisors, spill responders, and weather forecasters. In the village of Wainwright, $3.5 million has already been spent by Olgoonik Corp. getting ready to lend a hand to the oil company, believing that jobs are a fundamental part of modern life. It's looking to land up to $10 million in contracts in support of the drilling season, which could create up to 25 jobs and reduce unemployment in Wainwright by six percent. "It's outrageous," said Wainwright resident Ira Ungudruk from the village council offices on rumors of the hourly wages being offered. For jobs that involve cleaning tanks and handling hazardous materials, he's heard the going rate is $50 an hour -- $75 an hour for overtime. Ungudruk, who has previously worked for the village corporation in its local store and hotel, hopes opportunities from oil and gas exploration will grow in the future. Looking around he already sees benefits. Local ships have been upgraded to meet Shell's needs, and job training classes are being held. He dreams of a time when shareholder dividends are large enough to live on, a time when his boys, ages 7 and 15, can worry more about hunting than finding jobs. "It's worth the risk if you ask me," he said.
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