|
Items in cart [0] |
Questions? Call 888-624-8373 |
| Copyright © 2009. National Academy of Sciences. All rights reserved. Terms of Use and Privacy Statement |
Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 132
9
Effects on the Human Environment
There is no turning back. We were introduced to the cash
economy and now we can't do without it. How do we bal-
ance these? I don't know. We are learning it as we go. I don't
know where is the middle place and I don't know what the
future holds.
Bernice Keigelak
The land can tell us everything we want to know. The only
problem is that it doesn't have a voice. But the spirit of the
land is always there talking to us. We must listen.
Arctic Elder
Some effects on the human environment of oil and gas
activities are analogous to effects on physical and biotic en-
vironments in that they are related in space and time to physi-
cal changes in the environment. But others differ in major
ways because an effect on humans can occur without a physi-
cal change in the environment. Information the announce-
ment of a leasing decision, or knowledge about an event that
occurred far away, for example can profoundly affect
people individually and collectively. These effects can occur
before any local biotic or physical changes. Similarly, ef-
fects on people can occur by changing people's perception
of risk or reward, and hence their behavior. Also, people can
adapt faster and to a greater degree than many other organ-
isms. As result of those differences, social and economic
assessments on Alaska's North Slope must include an analy-
sis of prior and distant effects. There is no analogy between
the analysis of those effects and the analysis of any physical
or biotic effect.
In addition, the harvesting of the wildlife resources that
live or migrate through the region is of major cultural, nutri-
tional, and economic value to North Slope residents. A1-
though peoples in other rural areas traditionally hunt and
fish for local wildlife, those activities are generally a supple-
ment to other forms of subsistence activities such as garden-
ing and timber harvest (Field and Burch 1991~. There is no
agriculture or forestry on the North Slope, so the Native cul-
132
tural heritage there is based to a much greater degree on
subsistence hunting and fishing than are subsistence cultures
elsewhere.
Energy-resource development on Alaska's North Slope
differs from the boomtown experience in the continental
United States (Kruse et al.1983~. The isolation of rural com-
munities on the North Slope, particularly because of their
lack of connection to a highway network, meant they did not
become staging areas for development. Instead, virtually in-
dependent infrastructures developed, centered on the termi-
nus of the haul road that was built to support the Trans-
Alaska Pipeline. The people hired to support the industrial
development of the North Slope were not local or perma-
nent, and in that way they are similar to the populations
that support offshore petroleum development elsewhere
(Gramling 1989, 1996~.
Because of these differences, the two research traditions
that have guided much social and economic impact assess-
ment are not entirely applicable to the North Slope experi-
ence. The first research approach flows from the National
Environmental Policy Act (NEPA) of 1969, which requires
that federal or federally funded agencies assess and mitigate
the environmental effects of their actions.
The NEPA led to the birth of a variety of assessment
techniques, summarized by Burdge (1994) and condensed into
guidelines by the Interorganizational Committee on Guide-
lines and Principles for Social Impact Assessment (1994~. The
focus is to predict and evaluate social and economic effects
before activities occur. It is necessary to describe baseline
conditions (how the basic social and economic environment
functions beforehand), identify the full range of probable so-
cial effects based on discussions with the affected parties, and
project responses to the most likely effects. The approach iden-
tifies alternatives to the action proposed, and it establishes
procedures for monitoring and mitigation.
The second tradition, which assesses the effects of de-
velopment activities after it happens, has a long history, par-
OCR for page 133
EFFECTS ON THE HUMAN ENVIRONMENT
ticularly in rural sociology (Field and Birch 1988; see Landis
1938~. The focus sharpened in the early 1970s with research
on the effects of the construction of coal-fired power plants
in the rural western United States. The driving force of this
"boomtown" model is population growth, which leads to a
host of associated, frequently undesirable, societal effects.
They include overcrowding; degradation of various munic-
ipal services, with a subsequent loss of informal control
of deviance and community support of its disadvantaged
members (Freudenburg 1986~; and increases in substance
abuse, divorce, homicide, and suicide (Albrecht 1978, Bates
1978, Cortese and Jones 1977, Gilmore 1976, Gramling and
Brab ant 1986~.
To allow assessment of social and economic conse-
quences related to oil and gas development on the North
Slope, the committee used the typology developed by
Gramling and Freudenburg (1992a, Freudenburg and
Gramling 1992) in its analyses. In this typology, effects are
separated into opportunity and threat effects, which can oc-
cur before any physical or biotic change; developmental ef-
fects, which occur during and soon after development activi-
ties occur; and adaptation and post-developmental effects,
which generally occur after development is complete. Be-
cause developmental effects those attributable to oil and
gas exploration, development, and production have been
far greater on the North Slope than opportunity and threat or
adaptation and post-developmental effects, they are dis-
cussed in the most detail.
OPPORTUNITY AND THREAT
In the human environment, real, measurable effects-
opportunity and threat effects begin with changes in social
conditions and so can start with a rumor or announcement
about a proposed activity (Krannich and Albrecht 1995~.
They result from the efforts of interested parties to define,
and to respond to, the anticipated effects of development,
either as an opportunity (for those who see the effects as
positive) or as a threat (for those who see them as negative).
Many effects on the human environment of the North Slope
133
nificant quantities of oil and natural gas at Prudhoe Bay. In
July, ARCO estimated the find as 9.6 billion barrels (Berry
1975~. The announcement of the discovery, the largest in the
western hemisphere, was a catalyst for changes that affected
the human environment of the North Slope and that increas-
ingly moved North Slope residents into the mainstream
economy. With the discovery, North Slope lands and waters
that were the traditional Inupiaq hunting and fishing grounds
suddenly had new meaning and value to the industrialized
world to the south.
Although the concept of a pipeline to move oil from the
North Slope to Valdez dates back to at least 1946 (Thomas
1946), the 1968 discoveries led engineers from British Petro-
leum, Humble, and ARCO to undertake more extensive stud-
ies. In 1969, those companies announced plans for a 1300 km
(800 mi) long pipeline, at an estimated cost of $900 million.
New companies joined the venture: Mobil, Phillips, Union of
California, Amerada-Hess, and Home Oil. On June 6, 1969,
they applied to the U.S. Department of the Interior for permis-
sion to build the pipeline across public land in Alaska.
In addition to opposition by environmental and com-
mercial fishery groups there were two key legal impediments
to the pipeline: long-standing Native claims to the land
across which the pipeline would traverse and the then-new
NEPA. The importance of the land rights issue encouraged
the multinational oil companies to support settlement of
Native claims. Once that support was forthcoming Congress
acted fairly quickly to pass the Alaska Native Claims Settle-
ment Act (ANCSA) in 1971, which can be seen as the first
major social and economic effect of petroleum activities on
the North Slope. The ANCSA fundamentally changed the
relationship between North Slope Alaska Natives and the
environment they had occupied for thousands of years. The
effects of that change accumulate to the present.
Congress chose a corporate model to address the issue
of common "ownership" of Native lands. The ANCSA cre-
ated 13 regional corporations, 12 in Alaska and 1 to repre-
sent Alaska Natives living outside the state. Alaska Natives
who enrolled were made shareholders. Approximately 200
village corporations also were created. Alaska Natives who
began with the announcement in 1968 of the discovery of enrolled in their village corporations received shares of that
oil reserves in Prudhoe Bay, and they were accomplished corporation. In general, Alaska Natives were allowed to en-
facts or well on the way to becoming so even before Con- roll either in the region and village where they grew up and
gross approved construction of the Trans-Alaska Pipeline in which they considered home, or in the region where they
1973.
Two types of information have resulted in the accumu-
lation of opportunity and threat effects for the residents
of the North Slope Borough: information concerning the ini-
tial find and information concerning various development
scenarios.
Discovery
In January 1968, Atlantic-Richfield (ARCO) and Hum-
ble (now Exxon/Mobil) announced that they had found sig-
_
were living at the time the act was passed.
The act also provided for the distribution of $962 mil-
lion in compensation to the regional and village corpora-
tions, essentially on a per capita basis. Of the funds, $462
million came from the federal government and $500 million
came from state royalties on petroleum over a period of 11
years. Thus, approximately half of the original funds to es-
tablish the regional and village corporations did not come
directly from North Slope petroleum activities.
One ANCSA provision requires that regional corpora-
tions share 70% of their resource revenues (those derived
OCR for page 134
134
from timber or subsurface mineral rights acquired as a result
of the ANCSA) with the other regional corporations. How-
ever, the Arctic Slope Regional Corporation (ASRC) would
not be required to share resource revenues from its subsur-
face inholdings in the Arctic National Wildlife Refuge, be-
cause those lands were obtained in a land exchange (GAO
1989~. This provision was designed to ensure that resource-
rich corporations shared with those that were resource-poor
simply by accident of location. This provision has had major
and continuing effects.
Finally, under the ANCSA, 18 million ha (44 million
acres) of land was conveyed to the regional and village cor-
porations. Of that, 9 million ha (22 million acres) of surface
estate went to village corporations, using a population-based
formula. This land was generally located around villages and
consisted of prime subsistence areas. The subsurface rights
to this land, some 6.5 million ha (16 million acres), went to
the regional corporations. However, under ANCSA, regional
corporation selections for subsurface lands could not be
made within existing national wildlife refuges. About
810,000 ha (2 million acres) was conveyed for specific uses,
such as cemeteries, historical sites, and villages with fewer
than 25 people, and another 1.6 million ha (4 million acres)
went to reserves where the villages took land instead of land
and money. The ANCSA also specified that if the secretary
of the interior wanted to set aside a pipeline transportation
and utility corridor, neither the State of Alaska nor Alaska
Native groups could select lands within it. The ANCSA has
been both praised and criticized, but its role in bringing per-
manent and still accumulating change to the lives of Alaska
Natives on the North Slope and elsewhere cannot be denied.
The second major legal impediment to the pipeline, the
NEPA, led to a bitter fight in Congress, primarily over a
proposed alternative route through Canada and alternate
sources of energy for the nation. The fight over the Trans-
Alaska Pipeline concerned loss of wilderness, marine oil
spills atValdez, earthquakes, end otherissues (Coates 1991~.
The battle was finally settled, not by discussion or the NEPA
process, but by the October 1973 oil embargo staged by the
Arab members of OPEC. Shortly after the embargo began,
opposition to the pipeline in Congress declined: the Trans-
Alaskan Pipeline Authorization Act was passed November
12, 1973, and was signed by President Nixon on November
16. The act barred further review on the basis of the NEPA,
and it restricted further legal action only to questions con-
cerning the act's constitutionality (Gramling and Freuden-
burg 1992b).
A thirdimpedimentin 1970 through 1973 was a technical
review process that indicated the pipeline, as designed (to be
buried), was vulnerable to failure by thawing permafrost and
to destruction by plausible earthquakes. It mandated redesign
according to specific technical stipulations (DOI 1972b). The
redesign, in which about half the pipeline is elevated, was
completed during those three years. The estimated project cost
rose from the original $900 million to $8 billion.
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
The haul road was completed in September 1974, and
pipeline construction took the next three years. (For a con-
cise description of the pipeline and associated facilities,
see Coates 1991.) Oil first reached the Valdez terminal on
July 31, 1977.
On the North Slope, the initial discovery started a chain
of effects. The Arctic Slope Regional Corporation (ASRC)
was created to serve as the North Slope's regional corpora-
tion; it is one of the major players on the North Slope. The
North Slope Borough (NSB) was incorporated July 2, 1972.
The North Slope Borough almost would certainly not exist
except for North Slope petroleum, but if it did exist it would
certainly not be the dominant social, economic, and political
force that it is today.
The initial discovery at Prudhoe Bay, the subsequent
enactment of the ANCSA, establishment of the ASRC and
the village corporations, and the founding of the NSB have
been the primary factors in the growth, concentration, and
development of the communities and populations on the
North Slope. Without petroleum development on the North
Slope, those communities and populations, and the condi-
tions under which they live, would be vastly different. The
initial announcement of the discovery at Prudhoe Bay re-
suited in the restructuring of the social, economic, and po-
litical life on the North Slope in a way that allowed large
amounts (by North Slope standards) of capital to flow into
the region. That capital resulted in major changes in North
Slope communities.
Specific Development Scenarios
Information about two specific development scenarios
has led to significant opportunity and threat effects: offshore
development and development in the 1002 Area of the Arc-
tic National Wildlife Refuge.
Offshore Development
The 1983 observation of Kruse and colleagues, that
Native Alaskans' "fears that offshore development will in-
evitably harm subsistence resources are both intense and
widespread and themselves constitute an impact of develop-
ment," is still true. The committee was repeatedly told that
this is the issue for the Inupiat.
The concerns fall into three categories, all involving the
bowhead whale. The first is that the Inupiat do not believe
anyone has demonstrated the ability to clean up oil spilled in
a frozen sea or in broken ice. In fact, many have voiced the
belief that large marine spills cannot be cleaned up in any
situation, citing as evidence the Exxon Valdez spill and the
failure of any large marine spill to be contained and cleaned
up (see also ADEC 2000~. The Exxon Valdez oil spill was a
sensitizing event on the North Slope, as it was around the
world, in reinforcing the perceived consequence of a large
marine spill. Along the coast, the first concern is that a spill
OCR for page 135
EFFECTS ON THE HUMAN ENVIRONMENT
during the migration of the bowhead will injure or kill sig-
nificant numbers of whales. The Inupiat believe this would
be especially critical during the spring migration when both
spilled oil and whales would be concentrated in leads (cracks
in the ice cover).
The second concern is that a spill would cause the Inter-
national Whaling Commission to judge the bowhead to be
under greater threat than is currently perceived, causing that
group to curtail or reduce quotas for the striking of whales.
The final concern is that the noise associated with offshore
exploration and production would alter the migration routes
of the bowhead. This concern is based both on observations
by Inupiat hunters and on recent scientific data that bow-
heads will avoid seismic activity, moving as much as 20-30
km (13-19 mi) away from their normal migration routes
(Richardson 1997, 1998, 1999~. When whales move farther
from shore, the hunters must follow in their small boats to
unpredictable seas, and tow killed animals farther, as well.
Hunters are exposed to greater danger, and the amount of the
harvest is reduced because of spoilage.
It would be difficult to overstate the importance of bow-
head hunting to the Inupiat. The subsistence harvest dates
back several thousand years, but outside influences have
brought about social changes, and so whale hunting has be-
come a rallying point for the maintenance of Inupiaq cultural
continuity in at least four important ways. First, the organi-
zation of whaling crews and the preparation for the hunt is a
continuous activity that creates and reinforces social and
cultural bonds. Second, the hunt itself is an intensive experi-
ence that involves crews camping out on the ice, near a lead,
for up to a month. Third, the preparation and preservation of
a successfully taken whale involves the entire community.
Luton (1986) estimated that 70% of the entire population of
Wainwright was directly involved after the successful tak-
ing of a bowhead. Finally, sharing the whale is an integral
part of Inupiaq culture that reinforces cultural continuity and
that goes beyond social action to the way Inupiat are inter-
twined with the world. For the Inupiat, the only way humans
can take an animal as powerful as a bowhead whale is if the
whale gives itself to the hunters. Whales will do this only if
they are treated with respect. Sharing the whale is one way
of showing respect, as are activities such as cleaning the ice
cellar, the final resting place of the whale. Whales are shared
in three ways. First, whales are shared by whaling crews
according to a community formula (Luton 1986~. Second, as
with other subsistence commodities, once a crew member
has received his share, various portions of the whale are
shared with relatives, friends, and elderly members of the
community and others who cannot participate directly in the
hunt. Finally, a large part of the successful captain's share of
the whale goes to the Nalukataq, a festival and important
community gathering that includes a blanket toss, dancing,
and the sharing of food.
Each successful captain holds a Nalukataq (usually the
last two weeks in June), and friends, relatives, and former
135
community members travel to the community to visit and
catch up on what has happened over the past year. No other
shared pursuit involves as many members of the community,
for as much time, and as intensively as the activities that
surround hunting the bowhead. In Barrow, hundreds of thou-
sands of person-hours are spent in those activities (R.
Harcharek, NSB, unpublished material, 2001~. The same is
true in other North Slope whaling communities.
Finally, the size of bowheads makes them an extremely
important food source. It is doubtful that any of the North
Slope communities could survive in their present form with-
out the harvest. Of the 74% of NSB households that re-
sponded to a 1998 survey, 68.7% of Inupiaq households and
36.4% of non-Inupiaq households reported that at least one-
half of their annual food came from subsistence activities.
Hunting the bowhead has been the Inupiaq cultural an-
chor as change has come to the North Slope. The ongoing,
accumulating effects posed by offshore development, in the
form of perceived threats, would be diminished only by
clear evidence that the technology exists to mitigate large
oil spills in broken ice. There is no evidence to date that
such cleanups are possible. Current mechanical means of
collecting spilled oil are not likely to be successful in the
Beaufort and Chukchi seas (ADEC 2000~. Alternative
methods, such as in-situ burning and chemical dispersion,
still must be developed for use in ice-filled waters, incor-
porated into response plans and practiced, and approved by
regulatory agencies.
Engaging in subsistence activities is not simply a matter
of choice. Isolation from major transportation routes and the
area's inability to produce agricultural products mean that
the prices of goods and the cost of transporting them to the
North Slope are considerably higher than in the rest of Alaska
or in the continental United States. In 1998, the cost of a
"typical market basket" in Anchorage was $122.19; in Bar-
row it was $218.03 (NSB 1999~; it is substantially higher in
outlying North Slope villages. Costs for vehicles, construc-
tion materials, fuel, appliances, and tools are similarly in-
flated in the North Slope. This does not mean that Barrow
residents spend 178% of what residents in Anchorage spend;
indeed they cannot. Because North Slope residents do not
have greater per capita incomes than some of their counter-
parts in Alaska or in the United States in general, they must
have a lower standard of living, rely to a greater extent on
subsistence harvest, or both. Accordingly, examination of
any potential effects on subsistence resources is critical to
the assessment of the accumulation of effects of energy de-
velopment on the human environment.
Development in the 1002 Area
The Gwich'in Indians are traditionally a nomadic people
who follow the migration of the Porcupine Caribou Herd.
For thousands of years, their ancestors have relied on cari-
bou to meet their nutritional, cultural, and spiritual needs
OCR for page 136
136
(Gwich'in Niintsyaa 1988~. The Gwich'in Nation consists
of 15 villages in northeastern Alaska and northwestern
Canada (Arctic Village, Christian, Venetie, Beaver, Birch
Creek, Fort Yukon, Stevens Village, Circle, Eagle Village,
Chalkyitsik, Old Crow, Fort McPherson, Arctic Red River,
Aklavik, and Inuvik), all of which are outside the North
Slope. However, the coastal plain of the North Slope, primar-
ily the 1002 Area of the Arctic National Wildlife Refuge, is
the traditional calving ground for the Porcupine Caribou
Herd. The Gwich'in believe that oil- and gas-related activi-
ties there would affect the reproductive potential and migra-
tion patterns of the Porcupine Caribou Herd and as a result
threaten their way of life. As with the Inupiaq concerns about
offshore development, the beliefs are intense and widespread
and themselves constitute a continuing effect that is exacer-
bated by the past and current political debate over develop-
ment in the Arctic National Wildlife Refuge.
As an indication of the strength of their concerns, in
1988, in response to initial attempts to open the refuge, the
Gwich'in Nation met in Arctic Village to draft a resolution
petitioning Congress and the president to preserve the right
of the Gwich'in people to their lifestyle by prohibiting de-
velopment in the calving ground of the Porcupine Caribou
Herd and to designate the 1002 Area of the Arctic National
Wildlife Refuge as wilderness.
The residents of Kaktovik, who live on Barter Island at
the northern edge of the Arctic National Wildlife Refuge
coastal plain, are generally in favor of environmentally sen-
sitive development there, which could bring significant eco-
nomic resources to them.
EFFECTS OF DEVELOPMENT
Most research on effects on the human environment
has focused on development effects those associated with
the actual development, construction, and operation of a
project or with the onset of a particular activity or process.
Development activities also can alter physical systems in
ways that affect humans, and they can alter cultural, social,
political, economic, and psychological systems. Develop-
ment effects have been studied the most and are the best
understood of all socioeconomic consequences. A variety
of effects can be observed on the North Slope, including
those attributable to noise and disturbance, availability of
money, and alterations to the physical environment, with
indirect effects on people.
Noise, Bowheacl Whales, and Subsistence Hunting
Petroleum activities on the North Slope have affected,
and have the potential to affect, subsistence activities in sev-
eral ways. Direct effects have been documented in three ar-
eas. First, traditional hunting areas within active oil fields
are now closed to hunting. Second, offshore activity alters
bowhead migration routes. Third, as noted in Chapter 8, calv-
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
ing caribou tend to avoid intensive oil-field activity, shifting
to less disturbed areas. As activities expand on the North
Slope those effects could expand as well. In addition, Alaska
Native residents told the committee that there are subtle
changes in species harvested by subsistence hunters, who
have identified changes in the color, texture, and taste of the
flesh and skin of several species.
Inupiaq hunters in the coastal villages first expressed
their concerns about seismic noise affecting fall-migrating
bowheads in the 1980s (Ahmaogak 1985, 1986, 1989~. The
hunters' contention was that seismic disturbances were forc-
ing the bowhead offshore, making access to the whales more
difficult and time making the whales more wary and there-
fore more difficult to hunt.
However, early scientific studies concluded that the
bowheads did not react strongly to an approaching seismic
vessel until it was within 7.5 km (4 mi) (Ljungblad et al.
1985, 1988~. Native hunters strongly disagreed with this as-
sessment, and eventually two apparent problems with its
methods were identified. First, the whales were approached
by the boat, rather than the whales approaching the boat.
Thus, what was measured was how close a seismic vessel
needed to approach to force whales to move out of an area
they were already in, rather than to what extent migrating
whales would alter their paths to avoid a seismic vessel. Sec-
ond, in three of the four experimental situations in the study
there was already another seismic boat "booming" in the dis-
tance before the test boat began. This compromised the con-
trols. Those problems led scientists to conduct more care-
fully controlled studies in the late l990s. Data from three
years showed that nearly all fall-migrating bowheads stayed
20 km (12 mi) away from an operating seismic vessel, a
finding that supported Native observations (Richardson
1997, 1998, 1999~. In addition to avoiding active seismic
vessels, whales change their rate of calling as they approach
seismic sources. Data from seismic monitoring in 1996 and
1997 show that call rates changed at least 45 km (27 mi)
from an active seismic vessel (Richardson 1998), probably
indicating detection of seismic activity. (Details of the ef-
fects of noise on whales and other marine mammals are in
Chapter 8.)
In recent years, the Alaska Eskimo Whaling Commis-
sion (AEWC) and seismic-exploration operators have
reached an agreement that reduces the effects of seismic
noise. The "oil-whaler agreement" restricts seismic vessel
operations to the west of the Nuiqsut and Kaktovik hunting
areas until the subsistence hunt has been completed. The
agreement must be renegotiated annually because the areas
of seismic operation vary each year. The National Marine
Fisheries Service (NMFS) established the program and con-
tinues to require operators to cooperate with the AEWC.
Although the agreement is helpful, substantial expense of
time and resources is required for AEWC negotiations each
year in full consultation with its members in the affected
villages.
OCR for page 137
EFFECTS ON THE HUMAN ENVIRONMENT
A whale is brought ashore in Barrow, amid much interest and cel-
ebration in the community. September 1992. Photograph by David
Policansky.
The whale is hauled up the beach. September 1992. Photograph by
David Policansky.
Exploring the whale. September 1992. Photograph by David
Policansky.
137
The butchering of the whale is about to begin. September 1992.
Photograph by David Policansky.
Butchered whale ready for distribution to whaling crew members
and others in the community. Kaktovik, September 2001. Photo-
graph by David Policansky.
Alterations to the Lancl
Alterations to the North Slope physical environment
have had aesthetic, cultural, and spiritual effects on human
populations. They come primarily from construction of
roads, pipelines, buildings, and powerlines, and from offroad
travel.
Structures and Roacis
Before the completion of the haul road in September
1974, the only regular, mechanized access to the North Slope
OCR for page 138
138
Subsistence fishing for arctic cisco, Nuiqsut, October 1985. Photo-
graph by Lawrence Moulton.
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
was by air, or by water during the late summer and early fall.
Increases in settlement, agriculture, and forestry generally
accompany road building in temperate and tropical areas,
but for the North Slope the most relevant effect is the in-
creased hunting pressure that accompanies roads (Box 9-1~.
Currently, roads of the industrial development stretching
from Kuparuk to Endicott are closed to public traffic, but
should any of them be opened to public use, effects would
increase. The Alaska Department of Transportation is con-
sidering a new all-season road to connect the National Petro-
leum Reserve-Alaska with the Dalton Highway (Petroleum
News Alaska 2002b).
Access by Nuiqsut caribou hunters to oil-field com-
plexes has been reduced because hunting is prohibited within
some, but not all, such areas. Physical barriers to use of all-
terrain vehicles and snowmachines are posed by pipelines,
and many hunters are reluctant to enter the oil fields for per-
sonal or aesthetic reasons. The committee heard repeatedly
from North Slope Inupiat residents that the imposition of a
huge industrial complex on the Arctic landscape was offen-
sive to the people and an affront to the spirit of the land.
OCR for page 139
EFFECTS ON THE HUMAN ENVIRONMENT
The roads and gravel pads are not likely to be removed
because exploration and development leases do not gener-
ally require rehabilitation. Rather: "[A]t the option of the
state, all improvements such as roads, pads, and wells must
either be abandoned and the sites rehabilitated by the lessee
to the satisfaction of the state, or be left intact and the lessee
absolved of all further responsibility as to their maintenance,
repair, and eventual abandonment and rehabilitation"
(ADNR 2002, emphasis added). It was the State of Alaska,
not the oil companies, that pushed for public access to the
Dalton Highway. Thus, the extent of permissible access to
the infrastructure associated with current and future petro-
leum production on the North Slope ultimately rests with the
state government.
Off-Roacl Travel
The primary effects of off-road tundra travel are im-
prints on the land that persist for varying amounts of time.
Off-road travel does physical damage to the land and vegeta-
tion, and the tracks laid down by various types of vehicles
are aesthetically unpleasing. The recognition that imprints
of human activity make a qualitative difference in a land-
scape can be seen in the wording of the Wilderness Act of
1964 (PL 88-577~: "[A] wilderness, in contrast with those
areas where man and his own works dominate the landscape,
is hereby recognized as an area where the earth and its com-
munity of life are untrammeled by man. . .". As with most
questions of aesthetics, different people perhaps even en-
tire cultures are affected differently by seeing, or just
knowing about, changes to the environment caused by
human activity. That the landscape is altered, however, is
undeniable.
Seismic exploration leaves an imprint on the landscape,
particularly the more recent 3-D (three-dimensional) meth-
ods that require receptor lines to be much closer together
than earlier methods. Of the activities associated with seis-
mic surveys, the camp trains (pulled by D-7 Caterpillar bull-
dozers) appear to leave the most visible scars. It is not known
how long the tracks left by seismic activity will remain on
the tundra; however, some of the tracks left in the 1984-
1985 seismic surveys in the Arctic National Wildlife Refuge
are still visible.
Human-Health Effects
During the committee's four meetings in Alaska, resi-
dents offered individual perspectives on many subjects, and
we heard testimony about both positive and negative effects
from oil and gas development. Alaska Natives recognize that
oil production in the region has given them money to spend
on community facilities, schools, modern water and sewer
systems, village clinics, child emergency shelters, and be-
havioral outpatient and residential programs that provide
mental health care and counseling for substance abuse and
139
domestic violence. North Slope residents reported that
money has increased the quality and quantity of health care
for elders, especially for those who need assisted-living ser-
vices. Each individual receives a permanent fund dividend
every year that is funded by investment of state money. Bar-
row residents already enjoy low-cost natural gas heating for
their homes, and other communities are expected to receive
it soon. Some residents believe that the access to the Internet
increasingly will provide people with education without the
cost of travel or absence from the village.
North Slope residents also reported that traditional sub-
sistence hunting areas have been reduced, the behavior and
migratory patterns of key subsistence species have changed,
and that there is increased incidence of cancer and diabetes
and disruption of traditional social systems. They also see
vastly increased time, effort, and funding necessary to re-
spond politically and administratively to the ever-multiply-
ing number of projects proposed in their own back yards.
Alaska Natives told the committee that anxiety over in-
creasing offshore and onshore oil and gas activity is wide-
spread in North Slope communities. Hunters worry about
not being able to provide for their families or about the added
risk and expense of doing so if game is more difficult to find.
Elders who can no longer provide for themselves worry
about the challenges facing younger hunters who will go to
great lengths to provide them with essential and traditional
foods. Families worry about the safety of hunters who must
travel farther and more often if game is not easily accessible.
Many adult residents already lead dual lives as wage earners
and subsistence providers for their families. They also are
faced with the need to attend industry-related meetings and
hearings, and review documents, because they believe that
decisions will be made that can significantly affect their daily
lives and those of generations to come. They worry about
contamination of the food they consume and know that their
health will suffer if they are unable to eat as their ances-
tors did.
In addition to stress contributing to adverse health ef-
fects, oil development has increased the smog and haze near
some villages, which residents believe is causing an increase
in asthma. The stress of integrating a new way of life with
generations of traditional teachings has increased alcohol-
ism, drug abuse, and child abuse. Higher consumption of
nonsubsistence food, such as shortening, lard, butter, and
bacon, and reduced consumption of traditional foods, such
as fish and marine mammal products, have increased the in-
cidence of diabetes (Ebbesson et al. 1999~.
The NSB bears the costs of those social stresses. Vil-
lages now provide substance abuse treatment, counseling,
public assistance, crisis lines and shelters, and other social
service programs. The borough provides the search and res-
cue services that respond when hunters put themselves at
risk in the pursuit of less accessible game. The revenue from
oil development has funded a police force, which must re-
spond to the situations that arise when people and their com-
OCR for page 140
140
munities are subjected to long-term and persistent stress. The
borough supports biologists, planners, and other specialists
who review and offer recommendations on the volume of
lease sale, exploration, and development project documents
that are produced each year. It must also cover the ever-
increasing expense of travel to Fairbanks, Anchorage, and
Juneau, Alaska; Seattle, Washington and Washington, D.C.,
where agencies with authority over oil and gas leasing, ex-
ploration, and development, and the subsistence resources
they depend on, conduct most of their work and make most
of their decisions. Although many public services would not
have been possible without the revenue from oil develop-
ment, many of those public services would not have been
necessary if oil had not been found and extracted from the
North Slope.
Wilclerness and Wilcilancis
The only legally designated wilderness areas under
study by the committee are a portion of the 3.2 million hect-
are (8 million acre) Mollie Beattie Wilderness that lies north
of the Brooks Range within the Arctic National Wildlife
Refuge and a small segment of Gates of the Arctic National
Park north of Chandler Lake (Box 9-2) (NWPS 2002~. The
Wilderness Act expressly prohibits the construction of roads
and structures and the use of motor vehicles, motorized
equipment, and motorboats, or aircraft and other mechanical
transport, in formally designated wilderness [Sec. 4(c)~.
However, the Alaska National Interest Lands Conservation
Act (ANILCA) of 1980 subsequently authorized the use of
motorized boats and snowmobiles, subsistence hunting and
fishing, the construction of temporary structures, and the
landing of airplanes and other activities in Alaska wilder-
ness areas.1
In addition to formally designated wilderness, more
than 300,000 ha (750,000 acres) of federal land in the 5.2
million ha (12.8 million acre) area between the Arctic
National Wildlife Refuge and the National Petroleum
Reserve-Alaska has been collectively managed by the
Bureau of Land Management (BLM) as a wilderness study
area (R. Delaney, BLM, personal communication,
5/17/2001 and 1/30/2002~.2 BLM is required to maintain
the wilderness character of this area. Although the amount
of formally designated wilderness on the North Slope is
small, a substantial portion of the slope outside the oil fields
retains the characteristics of wildlands and is de facto wil-
derness (TAPS Reapplication EIS).
~ Sections 811, 1110, 1316 of ANILCA arid 50 CFR Sec. 36.12. See 66
FR 3716 et seq. for a discussion of ANILCA exceptions to wilderness study
area (WSA) prohibitions.
2 Due to transfers of some of this lard to the state arid native corpora-
tions, this number is now less than 750,000. BLM does not have an accurate
accounting of the current area managed as WSA in this area.
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
Wilderness
The term "wilderness" carries many connotations, de-
pending in part on the cultural and historical perspectives of
the beholder. The definition provided by the Wilderness Act
of 1964 is viewed with profound skepticism and resentment
by many Alaska Natives, who have lived for generations in
"wilderness" areas on Alaska's North Slope:
None of this country is wilderness, nor has it ever been. It
has been continuously used and occupied by us and by our
ancestors for millennia. Since wilderness is defined as a place
without people, we are deeply insulted by those who pro-
claim any of this country wilderness, as if we were not con-
sidered to be real people (From In This Place [Anonymous,
unpublished, 2001]~.
Although reconciling the various views is a task well
beyond the committee's charge, some commonalities are
worth noting. Some ideas embodied in the legislative vision
of wilderness are also seen by Alaska Natives of the North
Slope as essential elements of their history and culture:
We told these [visitors] we liked the mountains and we liked
the sea. We liked to spend as much time in these places as we
could, the frozen sea, the snowy mountains, the summer sea,
this gorgeous, ever changing, breath-taking country which is
our homeland. Nowhere else is all of this possible, a sea full
of great whales and seals and fish and polar bear and foxes
and birds of every kind, from nearly every land, with moun-
OCR for page 141
EFFECTS ON THE HUMAN ENVIRONMENT
tains just nearby full of white sheep and wolves and wolver-
ine and with great plains in between the mountains and the
sea with muskoxen and caribou and river and lake fish and
many more birds and a thousand other things, all inter-
mingled with the spirits and memories and stories and leg-
ends and graves and old houses of our people. This is the
perfect place, the perfect place for us, which is why God
probably put us here, these few of us, and made us tough
enough to stay (From In This Place [Anonymous, unpub-
lished, 2001]).
The nature and intensity of human use, along with the
persistence of evidence of such use, determine the extent to
which an area retains its wild, "untrammeled" character.
Land use by indigenous peoples on the North Slope has been
for the most part nonintensive, leaving few traces on the
landscape outside of established villages. In contrast, oil de-
velopment has altered the landscape in ways that will persist
long after oil and gas extraction ceases. Testimony provided
to the committee in various communities on the North Slope
repeatedly cited "scars on the land" that result from indus-
trial development and that have altered both the physical and
the spiritual elements of the landscape, and thus the very
basis of Alaska Native culture on the North Slope. Many
Alaska Natives argued, however, that a wilderness designa-
tion can unfairly exclude them from their own ancestral land.
However, the Gwich'in people support wilderness designa-
tion of the 1002 Area as the appropriate legal tool to protect
their subsistence way of life.
Although acknowledging the existence of divergent
views, the committee evaluated the effects of oil develop-
ment on wilderness as the term is defined in the Wilderness
Act. To avoid confusion, we use the word "wildlands" rather
than wilderness except when discussing legally designated
wilderness. A typology of wildland values is presented in
Figure 9-1.
Effects of Development on Wilcilancis
Before oil development began in 1968, the area north of
the Yukon River, including the North Slope, was considered
the largest intact wildland area in the United States (DOI
1972a, FWS 1987~. Since that time, a large segment of this
region has been transformed. The perimeter of the oil fields
now extends over some 2,600 km2 (1,000 mi2) of the North
Slope, an area roughly equivalent to the land area of Rhode
Island. The oil fields constitute one of the world's largest
industrial complexes, and they have substantially affected
many of the wildland qualities of the region. The associated
roads, pads, pipelines, seismic vehicle tracks, transmission
lines, air, ground and vessel traffic, drilling activities, land-
fills, housing, processing facilities, and other industrial in-
frastructure have reduced opportunities for solitude; dis-
placed animals; altered ecological processes; compromised
scenic values; and resulted in noise and air emissions. Be-
cause the landscape is open, the changed nature of the land-
141
scape the roads, pads, pipelines, other structures, alter-
ations of the tundra from seismic activities is visible at a
distance, particularly from the air. Similarly, changes in
noise and air quality are perceptible far beyond points of
emission. All of these effects have resulted in the erosion
of wildland values over an area that is far larger than the area
of direct effects.
Most analyses of effects on the wilderness and wild-
lands of the North Slope have been conducted in the context
of environmental impact statements. And the analyses gen-
erally are cursory and often out of date. None has used new
techniques for measuring wilderness values; none has at-
tempted to coordinate wilderness planning or assessment
among different jurisdictions.
The National Petroleum Reserve-Alaska Production Act
of 1976, for example, required BLM to examine all resource
values, including wilderness values, in the National Petro-
leum Reserve-Alaska. This analysis (known as the 105(c)
study) was completed in 1978, almost a quarter of a century
ago. It is the only comprehensive wilderness evaluation that
has been done for the entire National Petroleum Reserve-
Alaska. In connection with the 1996 decision to open up the
northeast portion of the reserve to leasing, BLM prepared an
integrated activity plan/environmental impact statement
(IAPIEIS). At the time, BLM was barred from recommend-
ing wilderness designation (which would require an act of
Congress) for any portion of the area under consideration
under a directive issued in 1981 by then Interior Secretary
James Watt. As a result, although the IAPIEIS for the north-
east lease sale area contains scattered references to the wild-
land values of the area (principally focused on recreation),
there is little meaningful analysis of the consequences of
development for the range of wildland values.
Economic Benefits
The cash economy of the North Slope Borough largely
would not exist without oil and gas production. To supple-
ment their subsistence activities, some residents would have
earned income from U.S. government transfers such as so-
cial security, medical and veterans' payments, or Bureau of
Indian Affairs payments. Sport hunting, fishing, and other
recreational activities would have generated some income.
And although the ASRC has generated some earnings re-
cently, without North Slope oil that corporation would not
exist.
Table 9-1 is a summary of total personal income data
for residents in the NSB. After oil production began in the
late 1970s there was a dramatic increase of total personal
income. The NSB was established in 1972. Per capita in-
come in 1999 was about $27,000. For comparison, per capita
income in Arctic Village, not part of the NSB, was $10,761
in 2000.
Personal income is not necessarily the best measure of
effects, especially over the long term. Another, longer-term
OCR for page 142
142
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
Total Economic Value of WildIands
~~//~
~ - ~
DIRECT USE COMMUNITY SCIENTIFIC OFF-SITE BIODIVERSITY ECOLOGICAL PASSIVE USE
BENEFITS BENEFITS BENEFITS BENEFITS CONSERVATION SERVICES BENEFITS
On e recreation Resew Dir1 use
Human development Education Genetic
Cultural-Heritage Management Intrinsic
On-site hunting
Commencal |
Subsistence use Off-site hunting
Non-recreation jobs Scenic viewsheds
Retirement income Higher property values Watershed protection
Recreation jobs Increased tax revenue Nutrient cycling
Non-labor jobs Carbon storage
Pest control
1 Pollu ~
Off-site consumption Option Bequest Existence
of information in value value value
books and magazines, 1 +
and scenic beauty In ~
photos and videos Benefits from
Future direct, indirect, knowledge of
and off-line benefits ~ ~ continued
existence
Value of
conserving
wildlands for
future generations
1 1
Habitat conservation Habitat
Biodiversity conservation,
Ecological services Endangered
On-site recreation species, Wild
Off-site hunting recreation
Biodiversity
On-site recreation
Ecological services
Archeological resources
Decreasing "tangibility" of value to individuals
FIGURE 9-1 SOURCE: Morton 1999. Reprinted with permission, copyright 1999, Denver Law Review.
-
-
-
-
-
-
OCR for page 143
EFFECTS ON THE HUMAN ENVIRONMENT
TABLE 9-1 Total Aggregate Personal Income for the
Alaskan North Slope, 1970-1999
Year
Total Personal
Income (millions $)
Barrow-North Slope Division
North Slope Borough
970
975
980
985
990
995
999
12.4
42.4
82.1
33.6
145.6
200.6
205.8
SOURCE: BEA 2002.
accumulating effect is the progressive exhaustion of oil and
gas resources, because current and past cash income has been
purchased at the cost of denying income to others in the
future.
An informative way to illuminate the accumulated ben-
eficial aspect of oil and gas development is to measure net
assets on the North Slope. Assets are a measure of the pri-
vate and public wealth of an economy that, by their nature,
represent the accumulation of value over time. In contrast,
income represents value earned for a relatively brief period,
such as a year.
Table 9-2 summarizes the private and public assets on
the North Slope as of 2000. More than 90% of the private
property value on the North Slope, including oil deposits, is
directly attributable to the oil sector. Most private property
is taxed, and that revenue supports public services in the
borough. A region that has a substantial tax base, such as
private petroleum assets, can collect corporate taxes to pro-
TABLE 9-2 Net Assets: North Slope Borough and
Private Assets, 2000
Assets/Liabilities
($ millions) Total
Private assets
Petroleum
Other private
Exemptions
North Slope Borough assets
Cash arid investments
Profits
Physical improvement
Other
Borough liabilitiesb
Net assets
0,528
334
745a
903
713
372
949
,607
3,392
a Tax exempt value for 2001.
b D. Packer, Of lice of the Mayor, North Slope Borough, personal communi-
cadon, 2/27/2002.
SOURCE: Comprehensive annual financial report of the North Slope Bor-
ough, Alaska, 2000. pp.29,31,33,104-105, 108.
143
vice generous social services or to reduce its private citi-
zens' tax liabilities.
Over time, the NSB has used its income to create net
public assets that stood at $1.8 billion in 2000. The public
and private net assets that year amounted to $13.4 billion-
more than $1.77 million per capita. It is hard to compare
such figures with those for counties or for other small towns,
because public assets generally are not recorded. Instead, a
comparison is made with private assets. A sample of a dozen
small towns in Washington state (population 5,000-10,000)
reveals a private per capita taxable asset value owned by
individuals, corporations, and other taxable sources averag-
ing about $74,000; on the North Slope it is about $1.53
million.
North Slope Borough
The North Slope Borough is the dominant economic
force in North Slope communities. Petroleum activities have
been and continue to be the primary source of income on the
North Slope. In addition to property tax revenue from petro-
leum installations, income flows into NSB communities
through royalties paid to the State of Alaska, which are re-
turned to the NSB; through direct oil-field employment of
NSB residents; and through the activities of the regional and
village corporations.
The property taxes underpin the current NSB economy.
In the 1999-2000 fiscal year, revenues for the NSB were
$240,105,567, of which $201,223,579 (83.8%) came from
property taxes. Of that amount, $192,524,702 (95.4%) was
paid by five petroleum companies. Fifty-two percent of all
jobs reported in the NSB 1998 survey are funded by the bor-
ough. Thus, petroleum activities have had massive develop-
mental effects on the economy of the NSB and on the lives
of its residents (Table 9-3~.
Arctic Slope Regional Corporation
The Arctic Slope Regional Corporation currently
receives annual revenues of approximately $1 billion.
Throughout its existence, it has distributed approximately
$123 million in dividends to its shareholders, and it currently
employs more than 500 of those shareholders (ASRC 2001~.
In 2000, the ASRC distributed $8,841,000 through share-
holder dividends, through distributions from its permanent
fund, and through its Elders' Settlement Trust investment
fund program. The ASRC subsidiaries were heavily involved
in the construction and drilling of the Alpine field, which
recently came on line, and the ASRC owns, with the state,
the subsurface mineral rights to the Alpine field. The ASRC
and the village corporations have been and continue to be
dominant economic forces on the North Slope. ASRC sub-
sidiaries employ the overwhelming majority of North Slope
residents who work in the oil and gas sector on the North
Slope (Alaska Petroleum Contractors Inc. and Houston Con-
OCR for page 144
144
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
TABLE 9-3 North Slope Borough Revenue, 1991-2000 (Thousands of U.S. dollars)
General Sales/
Fiscal General Economic Impact Charge for
Year Property Assistance Intergovernment Services Miscellaneous Total
1991 221,630 4,408 36,796 7,786 45,345 315,965
1993 235,928 5,009 30,209 8,663 51,337 331,146
1995 227,292 5,000 32,664 10,497 37,714 313,167
1997 223,923 4,900 32,240 11,643 43,018 315,724
1999 211,512 4,700 33,900 13,935 27,770 291,817
2000 201,224 4,600 37,088 9,493 30,213 282,618
tracting Co-Ak Lt. employed 50 of the 64 employees noted
by Alaska Department of Labor and Workforce Develop-
ment in 2001~. The ASRC owns the mineral rights to ap-
proximately 2 million ha (5 million acres) of land on the
North Slope, much of which has proven reserves of, or holds
promise for, oil, gas, coal, and base metal sulfides. The
ASRC and its subsidiaries constituted the largest local prop-
erty tax payers on the North Slope in fiscal year 1999-2000
(NSB 2000~.
State Royalties Returnecl
Another useful economic measure of the accumulation
of effects is the Alaska Permanent Fund. Royalties from oil
sales, which have accumulated in this fund, amounted to
more than $28 billion in 2000. Its size ranks in the top 100
funds in the world (Everest Consulting Association 2001~.
Annual payments to every resident of Alaska, including chil-
dren, have grown steadily from a few hundred dollars per
year in the early 1980s to about $1,900 in 2000 and 2001
(Table 9-4~. North Slope oil is not the only source of fund
revenue, but it constituted more than 95% of Alaska's oil
production in 1999 and has been a major source of the fund' s
revenue since inception. Thus, assuming the population of
the North Slope is 7,500 this year, the Permanent Fund Divi-
dend program will produce approximately $13.5 million for
TABLE 9-4 Permanent Fund Dividends, 1982-2001
Year
Amount
2001
2000
1998
1996
1994
1992
1990
1988
1986
1984
1983
1982
$1,850.28
$1,963.86
$1,540.88
$1,130.68
$983.90
$915.84
$952.63
$826.93
$556.26
$331.29
$386.15
$1,000.00
SOURCE: Alaska Permanent Fund 2001.
the North Slope economy, much of that initially generated
by past oil royalties.
Economic Costs
There have been no economic valuation studies of ef-
fects on the physical, biotic, or human environment on the
North Slope. That is, no research has translated positive and
negative effects measured in physical units into how people
value them in monetary terms. From the rich array of poten-
tial economic effects of oil and gas activities a few can be
used to illustrate methods and types of data needed for eco-
nomic evaluations: air pollution; altered spatial distributions
of caribou and bowhead whales; and effects of long-lasting
structures, roads, and trails on landscapes.
Air Pollution
A sample of time series emission data coupled with a
diffusion model would help to establish where and how much
air pollution North Slope residents are exposed to. These
data can then be related to observed rates of morbidity and
mortality. The economic value of lost days of work and
medical expenses can then be tied to the rates of morbidity
specific to the identified pollution loads. Estimated rates of
mortality can be combined with estimated valuers) of a life
(EPA 1997, Freeman 1993, Viscusi 1992~. This cannot be
done for the North Slope because records of emission are
incomplete.
Subsistence Hunting
Oil exploration and development can alter the spatial dis-
tribution of caribou and the migration paths of bowhead
whales. No studies, to our knowledge, demonstrate quantita-
tively whether spatial redistributions alter the sustainable equi-
librium harvest or change the time it takes to harvest caribou
or bowhead whales. The lack of data precludes estimating the
dollar value of increased harvest time or of changed size of
sustainable harvest. Other possible losses, such as the lowered
quality of whale meat, are even more difficult to measure be-
cause of the lack of market prices. Finally, this method does
not capture the economic cost of the reported greater risk in-
OCR for page 145
EFFECTS ON THE HUMAN ENVIRONMENT
valved in hunting when bowhead whales move farther from
shore in response to seismic activity.
Passive Use Values
Some values cannot readily be directly or indirectly tied
to market prices. For example, the benefits of wildlands in-
clude (Morton 2000) the scientific (protection of structure,
composition and functioning of natural communities and en-
tire landscapes as well as archeological and paleontological
resources), the recreational, and the scenic. They also include
protection of reservoirs of biological diversity, provision of
ecological services, and spiritual (connection with "something
beyond our modern society and its creations, something more
timeless and universal" [66 FR 37291), psychological (soli-
tude; respite from machines, steel and concrete, crowding),
and cultural and historical benefits, and "passive use values,"
as enumerated here (see also Figure 9-1~:
· option value, maintaining for oneself or one's chil-
dren the option of visiting wildlands,
· existence value, the value of knowing a place exists
independent of ever going there, and
· bequest value, the value associated with bequeath-
ing wilderness to future generations ("the hope of an undi-
minished future [66 FR 37301"~.
The value of those benefits tends to increase as large,
relatively undisturbed landscapes become scarcer. In the ab-
sence of markets for the goods and services illustrated above,
people are studied using carefully designed surveys with
methods developed by cognitive psychologists and market
research specialist to elicit monetary values for quantitative
changes in the qualitative features of an ecosystem (Cum-
mings et. al.1986, Diamond and Hausman 1994, Hanemann
1994, Hausman 1993, Mitchell and Carson 1989, Portney
1994~. Many elements and values of wildlands can be
roughly quantified, allowing those areas to be mapped ac-
cording to the quantitative values they retain.
Of these different types of costs, the direct measurable
costs associated with environmental effects are the easiest to
quantify and are the best understood. In contrast, the com-
mittee could find no evidence of attempts to quantify the
long-term future costs, passive-use values, or indirect costs
of environmental effects. The information essential to as-
sessing such effects is not even being collected. As a result,
the full cost of oil development on Alaska' s North Slope has
not been assessed, quantified, or incorporated into decisions
that affect use of public land. The following section illus-
trates a method for valuing passive-use values indirectly.
Incorporating Economic Costs of Environmental Effects
into Decision Making
Incorporation of indirect, long-term, and passive use
costs into an overall economic assessment of development
145
would alter projections of economically recoverable oil and
gas on public land on the North Slope. For example, the
U.S. Geological Survey (USGS) periodically estimates the
amount of recoverable oil in various areas of federally owned
land on the North Slope. In doing so, the USGS generally
projects the amount of oil that is economically recoverable
from these lands given a particular price of oil and given a
set of costs associated with development and transportation.
By not fully accounting for indirect, future, and passive-use
costs in its projections, the USGS underestimates the cost of
development, which in turn inflates the amount of oil con-
sidered economically recoverable at a given market price.
This problem is most acute in light of uncertain, but
plausible, effects that are likely to be irreversible and the
traditional economic prescription, "Invest when expected
benefits exceed expected costs," does not hold. The follow-
ing example illustrates this fact. For the necessary geo-
graphic specificity, and because data are available, the Arc-
tic National Wildlife Refuge is used as an example. The
analysis can be applied to any undeveloped area. Develop-
ment can include the construction of roads, pads, and other
long-lived changes to the landscape. Before that, explora-
tion creates seismic trails, of which about 15% are visible
from the air after 15 years (Figure 7-7a). Many would regard
seismic trails as having a negative effect on landscapes that
accumulates as more trails are created. Given that about
4,000 km (2,500 mi) of lines or trails were surveyed during
1984-1985 in the Arctic National Wildlife Refuge, the ap-
propriate setting is the value of further visual effects on the
600,000 ha (1.5 million acre) Arctic Coastal Plain.
The USGS has estimated that Arctic National Wildlife
Refuge oil development would not be feasible if the price
of North Slope oil is $15 per barrel ($0.36 per gal) or lower
(because costs could not be covered by revenues). But this
estimated minimum does not include any environmental
costs associated with development or decommissioning (K.
Bird, USGS, personal communication, 2001~. At one point
during the time this report was being prepared, the price of
North Slope oil was around $17.50 per barrel ($0.42 per
gallon) (Wall Street Journal, Jan. 24, 2002), and prices
have fluctuated considerably before and since. Figure J-2
(Appendix J) illustrates a time series of crude oil prices
whose level and fluctuations approximate North Slope oil
pnces.
Suppose, however, the expected price warranted devel-
opment now, but that, in the future, the actual or expected
price does not warrant further development and would not
have justified the up-front exploration and development costs
in the first place. Nevertheless, the environmental damage
effects of seismic trails associated with the original explora-
tion, together with the effects of roads and pads, persist.
Appendix J works out empirically the (stochastic dy-
namic programming) method (Arrow and Fisher 1974) used
to analyze investment options under uncertainty with
irreversibility.
OCR for page 146
146
Oil development might not be warranted from a social
perspective, even if privately profitable; that is, if the private
net benefits of development are positive. From a social per-
spective, expected private net benefits from oil development
must be reduced by the accumulated environmental effects,
including the loss of nonmarket values described in the sec-
tion on wildland values in this chapter. The expected private
value of oil development in the Arctic National Wildlife
Refuge for alternative futures is calculated in Appendix J. A
particular "future" is the chance that the price of oil will be a
specific price above the break-even private cost of oil devel-
opment. For any given future, there is an expected private
net value of oil development. The important public-policy
issue is whether the private net value for any given scenario
is greater or less than the expected accumulated environ-
mental costs of exploration and development. Because envi-
ronmental costs have not been estimated in money terms, the
analysis is done in terms of hurdles or thresholds. How large
must the accumulated environmental costs be to offset the
positive expected net private benefits of oil development?
Equivalently, from a national perspective, if oil development
in the Arctic National Wildlife Refuge (or elsewhere) should
go forward, what is the highest value of accumulated envi-
ronmental opportunities forgone that would not thwart this
decision economically?
a
. ~ . . a. . . . . . ~ . .
Employment
A main effect of the expansion of services and the capi-
tal improvement program by the NSB was the creation of
borough jobs in the expanded educational system, in con-
struction for the capital improvement program, and in busi-
nesses that emerged of the growing economy.
Two patterns characterize employment in the NSB
(Table 9-5~. First, the NSB has a disproportionate concentra-
tion of employment in government and government-funded
activities. The borough government, school district, and
capital improvement projects; Ilisagvik College; and the city,
state, and federal governments together employ 61% of the
workforce. A second pattern is the disproportionately low
number of Inupiaq people employed in the oil and gas indus-
try (although that is partly attributable to the larger percent-
ages of Inupiaq young people: approximately 50% of North
Slope Inupiat are under 20~.
That few who live in the North Slope Borough are di-
rectly employed by the oil and gas industry has been noted
for almost two decades (Kruse et al. 1983) and is supported
by findings of both the NSB survey (NSB 1999) and the
Alaska Department of Labor (Alaska Department of Labor
and Workforce Development 2001~. The NSB survey re-
corded only 16 local people of the 2,418 people surveyed
who worked for petroleum companies. The Alaska Depart-
ment of Labor reported that, for companies that collected
and reported residency, of the 7,432 people who reported
working on the North Slope in 1999 in the oil and gas sector,
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
TABLE 9-5 North Slope Borough Residents'
Employment by Sector and Ethnicity,a 1998
Employer
Inupiat
Other
White Minority
Total
NSB government
NSB school district
Village corporation
ASRC or subsidiary
NSB capital improvement
Service
Ilisagvik College
Private construction
City government
Transportation
Federal government
State government
Trade
Oil industry
Communications
Finance and insurance
Other
Total
509
134
225
90
82
28
21
44
43
14
17
9
14
10
171
1,411
217
108
33
26
23
36
36
14
17
11
19
9
4
1
68
634
151
47
17
16
7
19
12
8
6
12
11
7
12
2
1
45
373
877
289
275
132
112
83
69
66
57
43
39
35
35
16
284
2,418
a Includes only the 74% of the borough who responded to a survey (NSB
1999).
only 64 lived in the state's Northern Region the Nome,
North Slope, and Northwest Arctic boroughs (Alaska De-
partment of Labor and Workforce Development 2001~. Most
of that group (50) were employed by two companies that are
subsidiaries of the ASRC. Kruse et al. (1983) reported a va-
riety of factors that affected both male Inupiaq willingness
to work in the oil fields and the desire of companies in
Prudhoe Bay to hire them.
An important factor is a desire to participate both in the
cash economy and in the subsistence harvest. Borough jobs
are preferable to oil industry jobs in part because they offer
more flexibility, allowing time off for hunting. Those jobs
also pay as well as the oil industry jobs do, and they are
available locally instead of requiring extended periods of
time away from home. In addition, Inupiat at Prudhoe Bay
find they are a small minority in a primarily white workforce
that can sometimes express hostility toward Alaska Natives.
The jobs available to the Inupiat often are seen by them as
menial or as token jobs. And employment by the oil compa-
nies can threaten participation in the activity that provides
the most status, hunting the bowhead whale.
Another barrier is the lack of formal training and certifi-
cation for skilled jobs. Industry employees need specific
skills from employees and often are unwilling to train work-
ers unless there is some certainty that trainees are committed
to remaining employed. Frequently, hiring takes place not
on the North Slope, but in Fairbanks, Anchorage, or at com-
pany headquarters in the continental United States. Ac-
knowledging that racism is difficult to document, Kruse et
al. (1983, p. 138) recognized antagonism toward Inupiat
OCR for page 147
EFFECTS ON THE HUMAN ENVIRONMENT
among North Slope oil industry workers. Anecdotally, the
committee heard from industry representatives that they hire
Inupiat only to have them not come to work reliably, and
from Inupiat that they experienced discrimination in hiring
and promotion. Whatever the causes, a main vehicle for fun-
neling cash generated on the North Slope to residents of the
NSB is functioning only marginally. Several programs have
attempted to address this issue, but with limited success.
Because employment in the oil industry has been mini-
mal, adaptation effects on North Slope residents are slight.
However, if North Slope residents were to move increas-
ingly into oil-field jobs there will be consequences (primar-
ily on families) attributable to concentrated work scheduling
(7 days on, 7 days off) (Forsyth and Gauthier 1991; Gramling
1989, 1996; Gramling and Forsyth 1987~. Although the de-
sire to participate in subsistence hunting is perceived as a
barrier to employment on the North Slope, in the Gulf of
Mexico the same work schedule allows employees extended
periods to engage in traditional activities, such as fishing
and shrimping (Gramling 1989~.
ADAPTATION EFFECTS
Human systems are adaptable, even in extreme situa-
tions (Bettelheim 1943~. The issue is not whether people will
adapt to externally generated perturbations or to internally
negotiated threats and opportunities but rather what conse-
quences will accrue. As the various components of the hu-
man environment adapt to a development activity, new skills,
knowledge, tools, and resources become available to sun-
port traditional activities. Two potentially problematic re-
sults also can occur.
First, the old patterns of behavior, economic activity,
skills, and capital improvements might be lost (sometimes
quickly, sometimes across generations) because they are no
longer relevant. The losses occur as Alaska Natives are en-
trained into a cash economy and increasingly need to use
English as their primary language for communication about
political, economic, and social changes. As they strive to
become full partners in discussions about these changes, in-
cluding those related to oil and gas development, it is diffi-
cult for them not to lose fluency in their traditional language,
with its embedded knowledge of adaptation to the physical
environment and of traditional relationships with the biota.
Cable television, common in North Slope households, accel-
erates the cultural changes. Many North Slope residents re-
ported to the committee their concerns about losing their
traditional knowledge and practices and their way of life,
despite their general reluctance to forgo the economic ad-
vantages they enjoyed.
Second, human and financial capital and nonrenewable
resources can be, and usually are, actively committed to and
consumed by the new development. If the new activity is not
sustainable, when it declines or ceases communities or re-
gions can be left less able to survive in their environment
147
than they were before the new development came along.
Freudenburg and Gramling (1992) call this overadaptation.
Oil and gas development has provided significant tax
revenue to NSB residents. But the tax base is now declining,
raising the question of whether the NSB can maintain its
budget and its capital improvement program if oil and gas
development diminish. Even in the short run as newer,
more efficient types of development are adapted and as older
methods are phased out the tax base for the NSB could
decline more, leading to less support for the existing infra-
structure and fewer borough jobs. Declines in borough
revenue would require residents to pursue some mix of seek-
ing oil industry jobs more aggressively, finding alternative
sources of economic activity, relying more heavily on sub-
sistence, migrating off the North Slope, or accepting a lower
standard of living.
Another effect could precede actual declines in produc-
tion. Increasingly, petroleum production on the North Slope
is using new technologies, such as directional drilling, that
occupy much smaller surface areas. This brings obvious en-
vironmental benefits, but also benefits the companies. Pro-
ducing oil from a smaller space is cheaper because less gravel
is mined and moved for pads and roads. Fewer shutdowns
are needed to move the rigs and support equipment; there are
fewer locations to deliver supplies to; fewer facilities to be
built, heated, and maintained during production; and if reha-
bilitation is required, much smaller areas to be rehabilitated.
Highly concentrated sites, however, can have lower assessed
values, relative to the size of the subsurface structure they
exploit, than huge surface complexes like Prudhoe Bay. So
as big facilities are shut down and new, smaller facilities
such as Alpine open, property tax revenues could decline
significantly even as production increases.
The construction of a gas pipeline could forestall, at least
for a time, the decline in tax revenue for the NSB. Commer-
cial gas production would require the construction of new,
taxable processing and transportation infrastructure, which
presumably could remain operational in older fields even
after they are no longer producing commercially feasible
quantities of oil. At some point, however, North Slope oil and
gas will no longer be economically viable to recover. The
potential for overadaptation by the communities now depen-
dent on funds generated by this resource is a real one. The
current standard of living an economic benefit of oil and gas
activity could be impossible to maintain once petroleum
activities cease.
The same trend toward smaller facilities and more envi-
ronmentally friendly petroleum development is also likely
to affect the ASRC, which is heavily invested in the oil-
field-service industry. Smaller facilities will require less sup-
port during drilling and production, reducing the need for
equipment and services. As with the NSB, there also is the
potential for building infrastructure private as opposed to
publicly funded that will be difficult to maintain once pe-
troleum activity ceases in the region. The ASRC's primary
OCR for page 148
148
assets appear to be its heavy investments in the energy ser-
vices sector and its potentially mineral-rich lands. Natchiq is
a family of more than 20 diverse and strategically aligned
companies and subsistence that operates in Alaska, Canada,
the U.S. Gulf Coast and the rest of the continental states, and
Russia to support the oil and gas industry. It offers explora-
tion to development, construction to production, and main-
tenance services, and the Natchiq companies employ nearly
4,000 people (ASRC 2001, p. 14~. As Freudenburg and
Gramling (1998) have noted, however, in examining the pe-
troleum support sector in the Gulf of Mexico, a support sec-
tor that has fiscal linkages primarily to one sector (petroleum
extraction and production) is likely to mirror the performance
of that sector, both as it rises and as it falls.
FINDINGS
· Without the North Slope petroleum discoveries and
development, the North Slope Borough, the Alaska Native
Claims Settlement Act, and the Arctic Slope Regional Corpo-
ration would not exist. The emergence of those structures has
caused major, significant, and probably unalterable changes
to the way of life in North Slope communities. The primary
vehicle of change is revenue that has flowed into communities
from NSB property taxes on petroleum infrastructure. Oil de-
velopment has resulted in assets for North Slope residents that
exceed $1 million per capita. Asset value per capita, exclud-
ing petroleum structures, exceeds $100,000. Many North
Slope residents view the changes positively. However, social
and cultural changes of this magnitude are not without costs in
terms of social and individual pathology.
Offshore exploration and development and the an-
nouncement of offshore sales have resulted in perceived risks
to Inupiaq culture that are widespread, intense, and them-
selves are accumulating effects. The people of the North
Slope have a centuries-old nutritional and cultural relation-
ship with the bowhead whale, and most view offshore indus-
trial activity as a threat to bowheads and thereby to their
cultural survival. They have generally supported onshore
development, however, subject to adequate environmental
controls.
· Proposals to explore and develop oil resources in the
Arctic National Wildlife Refuge have resulted in perceived
risks to Gwich'in culture in Alaska and the Yukon Territory
that are widespread, intense, and themselves are accumulat-
ing effects. The Gwich'in have a centuries-old nutritional
and cultural relationship with the Porcupine Caribou Herd
and oppose new onshore petroleum development that they
believe threatens the caribou.
· The current standard of living for North Slope resi-
dents will be impossible to maintain unless significant exter-
nal sources of local revenue are found.
· There has been little direct employment of North
Slope residents by the petroleum industry. Several programs
have addressed this issue, but their success has been limited.
.
CUMULATIVE EFFECTS OF ALASKA NORTH SLOPE OIL AND GAS
· Many activities associated with petroleum have
changed the landscape in ways that have had aesthetic, cul-
tural, and spiritual consequences; those consequences will
increase as the use of these facilities and infrastructure
declines.
· Wildland values over more than 2,600 km2 (1,000
mi2) of the North Slope have been compromised by oil de-
velopment. The potential for further loss is at least as great
as what has already occurred as development expands over
the next 20-50 years, although the nature and degree will
vary. Some effects will dissipate when oil activities end, but
many structures now on the North Slope are likely to remain
long after industrial activities cease, rendering their effects
on wildlands essentially permanent.
· There is no integrated, North Slope-wide framework
for wildland evaluation, mapping, ranking, planning, and
analysis of effects. There has been a steady erosion of wild-
land values over a vast area through a series of individual,
project-by-project decisions by different state and federal
government agencies.
· Environmental impact statements do not in general
evaluate the individual or the accumulation of effects of
development proposals on wildland values in a meaning-
ful way.
· The common practice of describing the effects of
particular projects in terms of the area directly disturbed by
roads, pads, pipelines, and other facilities ignores the spread-
ing character of oil development on the North Slope and the
consequences of this to wildland values. All of these effects
result in the erosion of wildland values over an area far ex-
ceeding the area directly affected. The loss of wildland val-
ues has not been assessed in terms of the total area affected.
· Although there are rigorous means of evaluating wil-
derness values, academic and agency researchers have paid
insufficient attention to developing meaningful, qualitative,
and quantitative metrics for evaluating wildlands and incor-
porating findings into the decision-making process. There is
inadequate knowledge of the economic value of North Slope
wildlands.
· Oil prices will depend primarily on circumstances
far from the North Slope. The social cost of alterations to the
landscape caused by oil and gas development that are long-
lived or irreversible, such as seismic trails and gravel roads
and pads, will continue long after the private returns from oil
and gas extraction on the North Slope cease. Therefore, the
social costs of development in new areas of public land
should play a central role in determining whether explora-
tion and extraction in previously undeveloped public lands
are economically warranted.
· The full economic costs associated with environmen-
tal effects of oil development on Alaska's North Slope have
not been quantified.
· Human-health effects, including physical, psycho-
logical, cultural, spiritual, and social, have not been ad-
equately addressed or studied.
OCR for page 149
EFFECTS ON THE HUMAN ENVIRONMENT
· A slope-wide, jurisdictionally coordinated frame-
work for wildland evaluation, mapping, ranking, impact
analysis, and planning would help decision-makers identify
conflicts, set priorities, and make better-informed decisions.
RECOMMENDATIONS
· Research should identify the specific benefits and
threats that North Slope residents believe are posed to their
ways of life by oil and gas development. This research should
target how much oil and gas activities, as distinguished from
other factors, are associated with rising levels of sociocul-
tural change. Research on the North Slope, regardless of its
subject matter, needs to occur as a cooperative endeavor with
149
local communities. Traditional and local knowledge and lan-
guage involves rich, detailed information about the physical
environment, the biota, and the human communities of the
North Slope. That information should be incorporated into
research from identification of topics and study design
through interpretation and presentation of results.
· The research community should focus on developing
ways to translate theoretical wildland concepts and values
into concrete terms that can be used in environmental assess-
ments and other contexts.
· Research should identify the specific human-health
effects (physical, psychological, cultural, spiritual, social)
that North Slope residents believe they experience as a result
of oil and gas development.
Representative terms from entire chapter:
oil development
