By Alan Weitzner and Corri Feige
While the Alaska Industrial Development and Export Authority (AIDEA) has been around since 1967, it is true we’re not exactly a household name. However, AIDEA recently gained attention when it was identified as the successful bidder for multiple tracts in the federal Bureau of Land Management (BLM)’s recent oil and gas lease sale. These tracts are located within the Section 1002 Area designated under the Alaska National Interest Lands Conservation Act (ANILCA), a small part of the Arctic National Wildlife Refuge (ANWR). We wanted to take this opportunity to provide some additional perspective on AIDEA and the opportunity presented by the Section 1002 Area lease sale.
What is AIDEA?
AIDEA is a unique entity within the state, formed by Alaska’s Legislature as a public corporation and managed by an independent board, with a mission to create jobs and spur economic development in Alaska. Since inception, we have directed over $3 billion into economic development within the state through our loan and project development programs, resulting in tangible benefits for Alaskans. AIDEA generates revenue based on successful investments in Alaska’s businesses and infrastructure that yield a positive return, which in turn covers our operating costs and provides for reinvestment in Alaskans. In fact, AIDEA has declared over $439 million in dividends to the state’s general fund, helping to support programs and services offered through the State such as health care, education, and public safety.
As we continue to navigate this new economic landscape created by the COVID-19 pandemic, it’s crucial that we as an economic development corporation have as many tools available to us as possible to promote Alaska’s economic interests. This includes preserving Alaska’s ability to access and responsibly develop its abundant natural resources, which is why AIDEA participated in the 1002 Area lease sale.
40 years of Alaskan support for the responsible development of the 1002 Area
Responsible resource development in the 1002 Area has been part of Alaska’s public discourse for over 40 years. When President Carter signed ANILCA in 1980, it not only expanded the Arctic National Wildlife Refuge from 8.9 million acres to 19.3 million acres, but also expressly set aside 1.5 million acres (known as the 1002 Area) for evaluation of its oil and gas development potential, which has the estimated potential to add upwards of 1.4 million barrels per day to Alaska’s production. Section 1002 was endowed within ANILCA by Alaska Sen. Ted Stevens and Rep. Don Young for the economic benefit of all Alaskans as codified access to Alaska’s natural resources. Alaska will receive half of all proceeds earned through the 1002 Area lease sale, as well as half of the fixed royalty of 16.67% on any production. But Alaska also stands to benefit from the injection of new production in enhancing North Slope infrastructure and keeping the Trans-Alaska Pipeline running and operating efficiently.
It is important to remember that there has been consistent and vocal support for responsible development of the 1002 Area from a cross-section of Alaskans, including all members of Alaska’s congressional delegation since 1980, Alaska’s Legislature with supporting resolutions passed in each session since 1997, and Alaska’s governor, Mike Dunleavy, as well as the majority of North Slope Tribal and Village leadership.
Alaskans know that the Native Village of Kaktovik is the only federally recognized community in the 1002 Area. They, along with more than 20 other Alaska Native organizations and corporations located in and around the 1002 Area have advocated for responsible development of the oil and gas on the North Slope. These include:
Native Village of Kaktovik, Kaktovik Iñupiat Corporation, City of Kaktovik, North Slope Borough, Arctic Slope Native Association, City of Anaktuvuk Pass, City of Point Hope, Native Village of Atqasuk, Olgoonik Corporation, City of Atqasuk, City of Wainwright, Native Village of Point Lay, Tikigaq Corporation, Atqasuk Corporation, City of Utqiagvik, Ilisagvik College, Ukpeagvik Iñupiat Corporation, Nunamiut Corporation, Native Village of Point Hope, Arctic Slope Regional Corporation, Wainwright Tribal Council, Iñupiat Community of the Arctic Slope, Native Village of Barrow, and North Slope Borough School District.
Much of the economic development and jobs supported across our North Slope communities has resulted from the responsible development of Alaska’s oil and gas resources. Public funding from taxes on oil and gas infrastructure has significantly contributed to economic security within these communities and provided revenue to fund local services, schools, health clinics, housing, emergency response, water and wastewater, heat and electric utilities, and countless essential services. We do not speak for these groups or individuals, but we’d be remiss if we didn’t highlight their voice and echo their support.
What does Alaska mean by responsible development?
Of the 1.5 million acres designated within the 1002 Area for its oil and gas potential, the BLM has stipulated that only a maximum of 2,000 acres, or roughly 3 square miles, can be used for surface infrastructure development. This means that any surface development footprint for oil and gas operations is already mandated to be less than .001% of the 1002 Area. All other acreage will continue to be managed as habitat and closely monitored. The lease stipulations include a long list of required operating procedures, which incorporate extensive pre-planning and authorizations prior to any operations. These also include protections for wildlife, subsistence access and the required coordination with Alaska’s Native communities on subsistence use.
To those who question whether any development can be done responsibly, we ask you to reflect on the past 50 years of oil and gas development in Alaska’s Arctic since the discovery of oil and gas in Prudhoe Bay. During this time, the oil industry established the backbone of Alaska’s economy, directly and indirectly created tens of thousands of jobs, and saw the Central Arctic Caribou Herd grow from roughly 5,000 in 1978 to approximately 30,000 in 2019, according to the Alaska Department of Fish and Game. Since 1970, technological advances in drilling and production have seen the surface footprint of development pads reduce by a factor of 5. What used to take a 65-acre pad to produce just 3-square miles of reservoir, now uses just a 12-acre pad area to produce over 100 square miles of reservoir. This incredible advancement in technology has been matched by world-class environmental stewardship and the development of new technologies that help protect the tundra, rivers, lakes and wildlife of Alaska’s precious Arctic ecosystem. The experiences of the past 50 years have established a track record of success exploring for and producing oil and gas in the harshest conditions, living up to the standards demanded by the most rigorous environmental protection laws in the world. Oil production in Alaska is cleaner and safer than anywhere else, and oil produced from leased acreage in the 1002 Area will be no different.
Alan Weitzner is executive director of AIDEA. Corri Feige is commissioner of the Alaska Department of Natural Resources.
