A major proposed North Slope oil project is running into local opposition from residents of the village of Nuiqsut, who are already partially surrounded by development and wary of more.
After hearing residents’ concerns at a North Slope Borough planning commission meeting that ran past midnight earlier this month, the commissioners declined to support a rezoning proposed for the Nanushuk project — a development that could produce 120,000 barrels of oil a day at its peak, or about one-fourth the amount that currently flows through the trans-Alaska pipeline.
The 4-2 vote isn’t binding, and the borough Assembly will take up the question at a meeting next month. But the decision highlights how the balance between development and subsistence is becoming increasingly fraught in Nuiqsut, a village of 450 that’s found itself in the middle of the oil industry’s resurgence on the North Slope.
[Read more: How a small, Arctic village found itself in the middle of Alaska’s new oil boom]
Eight miles north of the village is ConocoPhillips’ Alpine project, a $1.3 billion development that opened in 2000 and is still expanding, with sites to the south and west. Another big new Conoco project, Willow, proposes to establish a gravel mine seven miles west of Nuiqsut, with as many as 250 wells at the site of the development farther away.
Then there’s Nanushuk, pushed by Papua New Guinea-based Oil Search. The company plans to build one of its drill sites seven miles northeast of Nuiqsut, with a processing facility — to separate out oil from natural gas and water — farther away.
Some of Alaska’s elected leaders have touted the developments as a major boost to the state’s oil-dependent economy. And many Nuiqsut residents support continuing oil development, citing the ample financial benefits and quality-of-life improvements the industry has brought to the village’s residents — particularly those who are shareholders in the village’s Native corporation.
But Sam Kunaknana, Nuiqsut’s representative to the borough and an outspoken critic of oil development’s impacts on the village, said that the other commissioners — who represent different North Slope communities — were persuaded to vote against the Nanushak resolution by testimony from Nuiqsut residents.
People are concerned about development’s impacts on the fish they’re catching and the caribou they’re hunting, Kunaknana said in a phone interview. Already, oil development has affected as much as one-third of Nuiqsut’s traditional subsistence range, according the local Native village corporation.
“It’s not just one project,” Kunaknana said. “It’s everything that’s going on around this area.”
Oil Search’s Nanushuk project and Conoco’s Willow project could, if built, together produce 250,000 daily barrels of oil at their peak, or roughly half the amount of oil that currently flows down the trans-Alaska pipeline. The companies’ management would have been watching the planning commission’s meeting closely, said Tim Bradner, a former BP employee and journalist who’s long followed Alaska’s oil industry.
“And they would be very concerned about making sure that their relationships are good with the local people up there,” he said. “Because unlike in a lot of places, the North Slope is a place where the local people really do have clout.”
Oil Search has been expanding its footprint in Alaska and recently hired Joe Balash, formerly a top official in the U.S. Interior Department; the company recently moved into office space in BP’s Midtown Anchorage headquarters. Spokeswoman Amy Jennings Burnett declined to comment.
The planning commission’s vote comes as the Trump administration pushes to loosen restrictions on oil and gas development in the area. Later this week, the Bureau of Land Management plans to release an environmental review of a new land-use plan for the National Petroleum Reserve in Alaska, where the Willow project and others are located — and it’s expected to revoke some of the environmental safeguards contained in a previous, Obama-era version.
[Read more: Trump administration moves to open environmentally sensitive National Petroleum Reserve land to oil drilling]
The challenge of balancing resource extraction and subsistence exists across the North Slope, but that tension has escalated in Nuiqsut amid the increasing development nearby.
“I can’t think of anywhere in the state where the juxtaposition of these issues comes to roost as it does in Nuiqsut,” Bradner said. “You have to feel some sympathy for the people — they’re surrounded by all this and they worry about their community kind of becoming a truck stop for the industry. On the other hand, there are people in the community who see a lot of upside to this.”
Nuiqsut sits in the biologically-rich delta of the Colville River, just south of where it flows into the Beaufort Sea, and it was founded amid passage of the Alaska Native Claims Settlement Act in the early 1970s. At the time, the oil industry’s focus was 50 miles east, where the Prudhoe Bay field had been discovered. But in the decades since, development has crept steadily west.
Since Alpine opened in 2000, Conoco has linked its central facility with several additional sites, with pipelines and roads now stretching nearly 180 degrees around Nuiqsut; a new connected drill site, Greater Mooses Tooth 2, is under construction.
Oil Search’s Nanushuk development is proposed northeast of Nuiqsut. And Conoco’s new proposed Willow project, to the west, is currently undergoing federal environmental reviews.
Conoco has a “long-term relationship with Nuiqsut, which goes back over 20 years with our Alpine development,” spokeswoman Natalie Lowman said in an emailed statement.
“We are actively engaged with the community on our Willow project to identify concerns and seek collaborative solutions,” she said. “It is our goal to assist the community and ensure the North Slope Borough and all the NPR-A villages have the opportunity to benefit from our activities in the NPR-A.”
In February, Nuiqsut’s tribal government sued the federal government over its approval of Conoco’s exploratory drilling program for the previous winter.
[Read more: North Slope village tribal government sues over ConocoPhillips drilling plans]
But Nuiqsut’s Native village corporation, Kuukpik Corp., has taken a different approach, often partnering with the oil industry to bring cash and infrastructure improvements to shareholders and residents.
Kuukpik’s shareholders receive as much as $30,000 a year in dividends, thanks in part to royalties from oil pumped from some of Kuukpik’s lands that are part of the Alpine project. Alpine also is the source of a natural gas line that runs directly to Nuiqsut, allowing residents to heat their homes for a fraction of the cost in other rural Alaska villages.
Kuukpik has fought for, and received, concessions from oil companies to protect the village’s subsistence harvests and health. For one project, Conoco agreed to move the location of a proposed bridge away from an area where residents fish; for another, it used lower-emission generators to power a drill rig, reduced noise levels and boosted air and water quality monitoring.
The Nanushuk project also included a list of mitigation measures in the resolution that the planning commission rejected this month.
Oil Search, the company pushing the project, would have been required to hire a “subsistence representative” and conduct an array of studies on fish, caribou and the “cumulative impacts” of development in the area. It also would have been required to host an annual job fair in Nuiqsut, and to the extent possible, involve local students in their studies and hire local boat and snowmachine drivers.
The company has also agreed to build a boat ramp on the Colville River, along with a road to it, to improve residents’ access for subsistence.
The North Slope Borough’s planning department recommended that the planning commissioners approve it, and Kuukpik’s position was similar.
“The corporation still thinks that Oil Search will be a genuine and viable partner in the Colville delta,” Lanston Chinn, Kuukpik’s chief executive, said in a phone interview this week. “And we’ll see where it goes from there.”
The North Slope Borough Assembly is scheduled to consider the Nanushuk rezoning at its meeting Dec. 3. The borough’s chief administrative officer, Deano Olemaun, said he could not comment on the project “until all the final processes have been completed.”
Bradner, the journalist, said he expects the Assembly to balance the planning commission’s position with the project’s potential to add to the North Slope’s tax base. Most of the borough’s $400 million budget is paid for with property taxes on oil infrastructure, and “as the industry matures on the North Slope, its existing tax base is depreciated,” he said.
“They need new projects to keep their tax base active and renewed, to maintain all the public services that they support up there,” said Bradner. “So there’s two sides to this issue, and it’s a complicated question.”
