Here is just one more reason why sound, diversified economic development (read sustainable local living economies) are absolutely necessary.  It must not be Jobs vs Environment.  We cannot afford to pit them against each other.  We must make the Smart Choices necessary to promote and sustain both.  It may sound idealistic, but god help us if we lose a sense of idealist purpose to balance all the gritty reality of failed economics that didn’t take human nature and a compelling drive for community into account.  - KWC

 

Alternative Alaska Areas Eyed for Oil

2003-07-12 , By Yereth Rosen

 

CORDOVA, Alaska (Reuters) - The Alaskan seaside hamlet of Cordova may seem like an unlikely oil-boom town.  It is a town where salmon dominate life, residents still seethe over the Exxon Valdez disaster and voters a decade ago elected the nation's first Green Party mayor.  But Anchorage wildcatter Bill Stevens believes there are oil riches to be found in the rain-drenched forest 50 miles southeast of town.

The target is Katalla, a deserted coastal site that was home to Alaska's first commercial oil production, an early 20th century enterprise that generated about 154,000 barrels, barely scratching the surface, according to Stevens.  "It's been overlooked. It's been neglected," Stevens said. "It's a profitable situation waiting to be exploited."

The U.S. Forest Service late last year granted Stevens' company, Cassandra Energy Corp., permission to use a corner of the Chugach National Forest to probe for deep oil pockets that may lie beneath the old field.

The project fits into Bush administration and state government policies of stimulating oil and gas development far from Alaska's existing oil fields on the North Slope and in the Cook Inlet basin.  Untapped oil and gas abounds in Alaska, officials say, from Bristol Bay in the southwest to the interior birch forests to the mountainous Gulf of Alaska shoreline.

The U.S. Minerals Management Service is trying to drum up interest in areas off the northwestern Alaska coast closer to Siberia than to Anchorage. It has found no takers yet, but plans to offer offshore leasing options annually until 2007.

Rights To Untouched Basins

The Alaska Division of Oil and Gas has an exploration license program that gives companies the rights to explore up to 500,000 acres in largely untouched basins for a $1-per-acre fee, a posted bond and a commitment to spend a specific dollar amount. The program has sparked interest from smaller companies seeking to be pioneers, division director Mark Myers said.

What is attractive about some basins, Myers said, is the short-term potential for selling natural gas to local markets and the long-term potential for exports. He cited the Nenana basin west of Fairbanks, which state officials believe could hold 1 trillion cubic feet of natural gas and where Houston-based Andex Resources holds an exploration license. Denver-based Forest Oil Corp. has a license to explore a separate interior basin, and the state is in the process of issuing other licenses.

Gov. Frank Murkowski, meanwhile, recently announced plans for oil leasing near Bristol Bay, where residents want an economic alternative to salmon fishing.

Environmentalists worry about some of the prospects, which lie near wildlife refuges, parks or important fish runs. But Katalla development in particular strikes a raw nerve.  Cordova is home port for much of Prince William Sound's fishing fleet, and bitter memories of the 1989 Exxon Valdez spill remain. "I have no trust in the oil industry. None. Zip. Zero. That's learned. That's not just gut reaction," said Kelly Weaverling, a bookstore and cafe owner and the former Green Party mayor.

Copper River Pollution Fears

Residents fear oil will pollute the fabled Copper River east of town. The river, milky with glacial silt, is the spawning ground for a world-famous commercial salmon harvest. Its braided delta is North America's longest Pacific wetland, a draw for millions of migrating shorebirds and increasing numbers of bird-watching tourists.

Boosters say Katalla drilling, which Stevens plans to start next winter, could bring economic diversity to Cordova, a mountain-rimmed town of 2,500 that lacks outside road access and endures high prices and the fishing industry's caprices.  It could also profit the Native-owned Chugach Alaska Corp., which has Katalla mineral rights that might otherwise expire.

Dreams of a Katalla boom are nothing new.  Oil was discovered there in 1894 -- according to legend, when a bear hunter fell into a natural seep and found his gun covered with sticky crude. The site was once home to thousands of people, 13 saloons, a newspaper and big ambitions.

"Katalla is bound to become a great oil-producing section, and within a year or two I expect to see the oil belt in and around Katalla covered with oil rigs as thick as they can stand," one visitor told The Katalla Herald in 1907.  But the town vanished after its refinery burned down in 1933.

Relics of Katalla's oil days -- sepia-tinted photographs, office equipment and jars of yellow and red petroleum -- now sit behind glass in Cordova's museum.  That's where the oil legacy should stay, many say.  "We've had our problems with oil," said museum attendant Frances Mallory. "It doesn't mix with water. It doesn't mix with fish."

 

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