Salmon, merger make news

Posted: Sunday, December 31, 2000

ANCHORAGE -- The year 2000 in Alaska was marked by a big oil merger, weak salmon returns, the crash of Alaska Airlines flight 261, a battle over the Steller sea lion and a crackdown on cruise-ship waste.

Some of the year's biggest news came from Alaska's oil patch.

''It was certainly a watershed year in a lot of ways,'' said Ken Boyd, who recently stepped down as director of the state Division of Oil and Gas.

The year began with BP Amoco pressuring the Federal Trade Commission to approve its takeover of Arco. But in February the FTC rejected the $29 billion deal by a 3-2 vote. The agency said the merger would reduce competition for West Coast oil and consolidate ownership of oil holdings on the North Slope.

In March, BP announced an agreement to sell Arco's Alaska holdings to Phillips Petroleum. The deal satisfied the FTC, preserved nearly 400 jobs and brought a new competitor into Alaska's oil industry.

A year of high oil prices benefitted the industry and added to state coffers. Chuck Logsdon, the state's oil economist, said the price of oil averaged about $28.48 a barrel in 2000. That's the highest yearly average price since the early 1980s.

''We're quite a bit above the price we expected,'' Logsdon said. Those high prices are expected to help the state end fiscal 2001 with a budget surplus of about $116 million.

As the year came to a close it was Alaska's abundant natural gas reserves, estimated at 35 trillion cubic feet, that were grabbing headlines. Efforts to tap that gas and build a pipeline to markets in the Lower 48 gained momentum as prices and demand soared.

By early December, BP Explo-ration (Alaska) Inc., Phillips Alaska Inc. and Exxon Mobil Corp. agreed to spend about $75 million on a joint project to determine if a gasline is feasible.

Soon after the new year started one of Alaska's most prominent Native leaders was killed in the crash of Alaska Airlines flight 261. Morris Thompson had retired just one month earlier as president and chief executive of the Interior Native corporation Doyon Ltd. His wife Thelma and daughter Sheryl were among the 88 people killed when the plane went down off the California coast on a flight from Mexico Jan. 31.

Alaska Airlines came under increased federal scrutiny for its safety practices in the wake of the accident. The National Transporta-tion Safety Board has not determined the cause of that crash, but suspicion has focused on mechanical controls in the tail.

At year end, a number of tributes to Thompson were in the works. A new $1 million visitor center planned for Fairbanks is to be named for Thompson. A dormitory for Native students to be constructed at Alaska Pacific University will be called the Morris Thompson Living and Learning Center and the Alaska Federation of Natives named Thompson Citizen of the Century.

There were several significant developments in relations between the state and Alaska Natives in 2000.

The state announced in January that it would appeal to the U.S. Supreme Court the Katie John subsistence lawsuit, which established that the federal government could enforce subsistence fishing rights for rural residents on most state waters in Alaska. The decision drew condemnation from the Alaska Federation of Natives.

Nevertheless, Mike Williams, chairman of the Alaska Inter-tribal Council, says progress was made in state-tribal relations during 2000. He credits Gov. Tony Knowles' decision in September to sign an order recognizing the 227 federally recognized tribes in Alaska. In addition, the state began talks aimed at establishing a government-to-government relationship between tribes and the state.

''We have come possibly 500 percent in the last year in terms of relations between the tribes and the state,'' Williams said. ''These are exciting times in Alaska -- to be in the midst of making strides and improving the quality of life in rural Alaska.''

Alaska's fishing industry weathered rough seas in 2000.

The Bering Sea crab fleet was facing drastic harvest limits, due to a crash in crab stocks, as the year began. The fleet also had a nearly three-month delay in the start of the season because the sea ice moved farther south than normal, covering prime fishing grounds.

By the end of the year Congress had approved a $100 million program to buy back crab fishing boats and federal fishery workers were eyeing a program that would grant each crab boat an individual harvest quota.

Western Alaska suffered another year of disastrously low salmon returns, with the Yukon River seeing the worst returns in 40 years.

''To see them at these disastrously low levels is very scary and tragic and we don't quite know what the cause is,'' said Gunnar Knapp, a fisheries economist with the Institute of Social and Economic Research at the University of Alaska Anchorage.

Cook Inlet's fishers had one of their worst seasons on record. The harvest in Bristol Bay, the state's largest salmon fishery, was within the five-year average, but fishermen were disappointed with prices lower than last year.

But it was, perhaps, the pollock fishery that saw the greatest upheaval as efforts in the courts to protect the endangered Steller sea lion sharply curtailed the fall fishery. The National Marine Fisheries Service proposed even tougher limits on fishing in 2001. But Sen. Ted Stevens managed to work out a compromise with the Clinton administration that would phase in limits and give the North Pacific Fishery Management Council input on any fishing restrictions.

The cruise ship industry faced continued tough scrutiny for air and water pollution. Cruise ship waste became a big issue in 1999 when Royal Caribbean Cruise Line and Holland America Line Westours were convicted of polluting the Inside Passage.

In September, Knowles denounced the industry for what he called disgraceful violations of pollution standards. Cruise industry officials reached an agreement in principle with the state in November to monitor the discharge of treated sewage and waste water.

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