Bristol Bay land added to leasing program

Posted: Thursday, July 03, 2003

ANCHORAGE (AP) The Alaska Division of Oil and Gas will open up millions of acres around Bristol Bay to exploration, adding them to the state's five-year leasing program, Gov. Frank Murkowski said Wednesday.

The area comprises state and Native corporation land. It was added to the lease program at the request of the Bristol Bay Native Corp., the governor said.

Residents for years have been reluctant to support oil and gas development because of concerns about the potential environmental impact on the region's salmon fisheries, an important part of the Bristol Bay economy.

But with the recent downturn in the fishing industry, many of the same groups that thwarted oil and gas development, including the Native corporation, have gathered in support of opening the area to onshore oil and gas development.

Nels Anderson Jr., a former state senator from Dillingham who helped negotiate the leasing plan with the state, said it could mean more jobs and lower energy costs.

''We're desperate out here,'' Anderson said. ''Our young people are leaving because the cost of living is so high.''

State lawmakers recently approved a plan that would give tax breaks to exploration companies of up to 40 percent of the cost of new wells. Murkowski said that incentive should attract the industry interest in the area.

''I believe that outside the North Slope and Cook Inlet, the Bristol Bay region offers one of the state's best opportunities in terms of commercial quantities of oil and gas potential,'' the governor said.

About a dozen wells have been drilled onshore in the region, but no commercial quantities of oil were discovered, said Kevin Banks, a state petroleum market analyst. There have been no leases available in the Bristol Bay area since the 1980s, Banks said.

The state currently sells oil and gas leases on the North Slope and the North Slope foothills, in the Beaufort Sea and Cook Inlet. A schedule for lease sales in the Bristol Bay region has not been set.

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