Opening Arctic Refuge brought Alaska’s largest Native corporation $22.5 million from BP, Chevron
The Alaska Native regional corporation for the North Slope collected $22.5 million from a pair of oil companies after Congress opened the Arctic National Wildlife Refuge’s coastal plain to drilling in 2017, according to corporate documents.
Arctic Slope Regional Corporation, whose 13,000 Alaska Native shareholders own the oil rights to 140 square miles along the coastal plain, has long been one of the most aggressive advocates for opening the refuge to oil development. The payment, referenced in ASRC’s latest annual report, underscores just how much the corporation had to gain from the congressional action. It stands to benefit further if the oil companies, BP and Chevron, ultimately find and produce petroleum on its property.
ASRC’s 92,000 acres, along with the 1.6 million acres of federal lands in the coastal plain, were all off-limits to drilling until late 2017, when Congress passed the tax overhaul that opened the area to development. ASRC previously confirmed that a payment had been made under an existing, decades-old lease agreement with the oil companies, but it declined to reveal the amount.
ASRC is the largest Alaska-owned business, with annual revenues exceeding $3 billion and more than 15,000 employees inside and outside the state.
The corporation is heavily invested in oil and gas, with its own refineries and an oil-field services business; it also collects royalties from oil production on some of its lands outside the Arctic Refuge.
Those holdings have proven valuable to its owners: ASRC’s most recent annual dividend was $7,000 for each shareholder with the standard 100 shares. But the corporation’s pro-development position has recently caused tensions with other Alaska Native groups, whose members say they’re threatened by global warming. And ASRC recently withdrew its membership from the Alaska Federation of Natives.
ASRC spokesman Ty Hardt declined to comment on the payment from the two oil companies. A Chevron spokeswoman, Veronica Flores-Paniagua, and a BP spokeswoman, Meg Baldino, each confirmed that the payment had been made, but declined to comment further. Officials at Hilcorp, which is acquiring BP’s stake in the Arctic Refuge lease in a pending business deal, declined to comment.
ASRC’s shareholders are descendants of the Inupiat people who originally inhabited the North Slope, and the corporation acquired roughly 5 million acres of land through the 1971 Alaska Native Claims Settlement Act. The act granted a dozen Alaska Native regional corporations a total of $960 million and 44 million acres, or a little more than 10 percent of the state’s total area. In exchange, Alaska Native groups set aside their aboriginal land claims, which had delayed construction of the trans-Alaska oil pipeline.
When the act passed, ASRC was barred from claiming potentially valuable oil-bearing lands in the Arctic Refuge and the National Petroleum Reserve in Alaska, because those areas had already been set aside by the federal government. But a decade later, ASRC struck a deal with President Ronald Reagan’s administration to trade 101,000 acres of the corporation’s land within Gates of the Arctic National Park for 92,000 acres of subsurface rights within the refuge — around the village of Kaktovik.
The land trade set the stage for a 1984 lease between ASRC, BP and Chevron, and it also gave them the right to drill the only exploratory test well ever placed in the Arctic Refuge. The results from the well are still one of the oil industry’s most tightly-guarded secrets, though a New York Times report last year suggested that they were not promising.
After the well was drilled, both the corporate and federal lands along the coastal plain remained closed to actual oil production until Congress’ 2017 vote. ASRC had allowed Chevron and BP to suspend their lease payments while the closure remained in place, Teresa Imm, an ASRC resource development executive, said in an interview last year.
ASRC was a major participant in the lobbying campaign to open the refuge to oil development, nearly doubling its federal lobbyist spending in 2017 to $590,000, according to figures compiled by the Center for American Progress, a Washington, D.C.-based liberal advocacy group.
ASRC’s lands along the coastal plain are far from existing oil infrastructure, meaning development there could still be decades away. But drilling opponents are already questioning how the ASRC-controlled area fits into the Trump administration’s plans to open the refuge’s federal lands to development, and they want to know what environmental safeguards will apply.
“ASRC lands potentially being open to oil and gas is a major change in private land use that must be clearly addressed,” a coalition of more than two dozen opponents wrote in a March comment letter to the Bureau of Land Management, which is leading the environmental review in advance of drilling in the refuge. The groups added: “BLM must be clear on this point.”
BLM officials pointed to the agency’s written response to the letter, which was published as part of a 2,100-page document that addressed the thousands of unique public comments on the Trump administration’s draft environmental review.
That review, BLM wrote, “is not intended to address ASRC’s management of oil and gas exploration and development on its lands.” Restrictions and environmental safeguards adopted by BLM, the agency added, “will only apply on federal lands within the coastal plain.”
Any development on ASRC’s land would still have to comply with national environmental laws like the Clean Water Act and Marine Mammal Protection Act, which could trigger permitting and other requirements for individual projects. And the 1983 land trade also gave the U.S. Fish and Wildlife Service authority to review proposed oil development on ASRC lands, and includes a list of specific environmental safeguards that companies must follow.