NORTH ALEUTIAN BASIN ENERGY FISHERIES WORKSHOP

March 19, 2007 Anchorage, Alaska 1 P R O C E E D I N G S 2 MR. ALLEE: Well, good morning, if you could 3 take your seats we'll get started with this morning's session. 4 It's going to be an exciting one all the way over to Norway and 5 we've got an interesting panel. 6 Just in terms of brief discussions this morning I'd 7 like to thank you for coming again and I thought yesterday's 8 session was really quite good. We got into some great issues 9 at the end of the day kind of talking about some of the things 10 that were concerning people, that's the sort of thing we want 11 to promote, so we're trying to promote dialogue and discussion 12 and that sort of thing. We're going to continue in that vein 13 today so, again, thanks so much for showing up this morning and 14 we'll get started here. 15 I'd like to introduce the moderator of the panel and 16 that is Jessica Shadian. She just recently got her Ph.D. in 17 Political Science and International Relations from the 18 University of Delaware and she's an associate professor at the 19 High North Center for Business at Bodo University in the 20 graduate school there for Business in Norway. So I would like 21 to introduce Jessica at this time. Jessica. 22 MS. SHADIAN: Thank you. I'm just briefly 23 going to say for one second a little bit about what my research 24 is going to be about because it's basically taking this 25 dialogue today and trying to bring it a step backwards and look 2 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 at it as part of, you know, a theoretical and from an academic 2 prospective because this dialogue is actually part of this 3 larger trend that's taking place in international development 4 and it's, you know, usually regarding natural resource 5 development. 6 And it's this move from government to government that's 7 taking place. And often times you heard the title -- it's 8 discussed in terms of eco system management, stakeholder 9 management, stakeholder governance and basically it's this -- 10 the evolution of power that's going on toward a shared 11 bureaucratic decision making order where assessments emanate 12 from local citizens, local government, private industry, NGOs, 13 as well as state and international political bodies. 14 And these alternative institutional arrangements are 15 based on decentralization, collaboration and citizen 16 participation. And they're especially pronounced when you're 17 looking at regional environmental policies and development. 18 And I think the discussion from the last panel we had 19 yesterday and some of the questions that Judge Stevens (ph) 20 brought up are kind of the heart of what my research is going 21 to be looking at and because he's talking about how this is a 22 new process and so we don't yet understands who regulations and 23 who decides and who facilitates these order processes and so 24 that's really all I just want to, kind of, say about that. 25 And for now, I'm now going to introduce our first 3 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 panel. And our first panel is from Norway. And it's entitled 2 Perspectives on Energy Fisheries Coexistence in Norway. And 3 I'm going to introduce all the speakers and then as they'll 4 come up they'll just quickly say their own name. 5 We have Jan Oddvar Sornes who is actually the person we 6 see on the screen right now and he is the associate dean and 7 head of the MA Program and Energy Management at the Bodo 8 Graduate School for Business. 9 Next we're also going to hear from Jan Terje Henriksen 10 and he's a research fellow and managing director at the High 11 North Center for Business, also at the Bodo Graduate School for 12 Business. 13 We then will hear from Hans Nordgard and he's another 14 researcher from the High North Center. And this is going to be 15 followed by Pier Eidsvik and he's an advisor at the Northern 16 Country Government and I believe that's it. And so, Jan, 17 you're up. Can you hear me. 18 (Off record comments regarding slides) 19 MR. SORNES: Good morning everybody. And I 20 won't -- given the short time we have available I will 21 basically just introduce this session this morning by saying 22 thank you for inviting us and letting us be part of this. It's 23 so nice to see what we started last spring in 2007 has 24 developed into this great seminar which will continue in May in 25 Northern Norway -- continue this type of dialogue. 4 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 We'll see if the slides work now and try to refer to 2 these a little bit. I just want to let you know in Norway and 3 letting you the scenic nature of our environment..... 4 (This portion not requested) 5 MS. SHADIAN: Okay. And I'm going to introduce 6 now our next speaker and the next speaker is Jim Parker and 7 he's from Glasgow, Scotland and he has a Bachelors degree in 8 Biology, a MMC in Public Health Engineering and a PhD in Marine 9 Biology. As a marine biologist he has worked for 10 years in 10 the government fisheries laboratory in Northern Ireland. He 11 then joined Shell in 1986 as an environmental advisor for North 12 Sea operations and he now advises Shell International, a new 13 business development in the Hague (ph), so happy to introduce 14 you Jim. 15 MR. PARKER: Thanks, Jessica. And good morning 16 to everyone. I'm really delighted to be able to be here to 17 speak to you today about some of our experiences in the North 18 Sea particularly in developing the relationships between the 19 oil industry and fisheries. 20 I'm not going to give a lot of facts and figures about 21 the North Sea today. It's a very important fishery and to put 22 it in context I just looked up a figure last night. Scottish 23 based vessels landing to Scottish ports 380,000 tons of fish to 24 a value of three-quarters of a billion dollars, so that's the, 25 sort of, scale that we're talking about. 5 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 I just to repeat something that Gregg Nady said 2 yesterday and it's about hydrocarbon development phases. I'm a 3 bit unsighted from where I stand here at the moment, but 4 basically on this slide you see the entry phase, the phase that 5 we -- where we try to get entry to new acreage, exploration and 6 appraisal phases, development phases and then hopefully a long 7 production phrase. 8 And if you follow the money here the red line shows us 9 spending money and then as production kicks in, production is 10 the green line, we start to make money and then decommissioning 11 we spend again. So there's a long period of investment before 12 we actually make money and also as Greg said there's a period 13 here quite often it's difficult to get entry to new areas and 14 even once you explore as in, for instance, the Saint George's 15 Basin you can drill a lot of dry wells and actually not 16 progress the prospect. 17 So my point here is at the front end of the business 18 you can raise expectations about a new industry and these 19 expectations may not actually be realized so we have to be 20 careful at this point in time about the message that we give, 21 but nevertheless for the North Aleutian Basis I think this is 22 exactly the right forum to be talking in at these early phases 23 even before the acreage has been licensed. 24 And a few facts about the North Sea area, 222,000 (ph) 25 square miles. Total landing (ph) of averaging about 2.5 6 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 million tons. It has been higher. It has been up around three 2 million tons. These fisheries are under quite a lot of 3 pressure, particularly at the moment the cod fishery. The 4 herring fishery has in the past collapsed. 5 Three broad scale fisheries here. There's the -- the 6 dark blue one is the (indiscernible) ground (ph) fishery. The 7 middle one the pelagic fishery which is primarily herring and 8 mackerel and then this large scale industrial fishery for 9 Norway (indiscernible) and (indiscernible). These are fish 10 that go straight to processing plants to process the fish meal. 11 You can see here on the right hand side the scope of 12 the North Sea offshore industry. These are just Shell 13 installations spread from the southern gas fields here off the 14 coast of England through the central (indiscernible) oil fields 15 and some gas and condensate and then up to the east of the 16 Shetland Islands which are here and the major oil and gas 17 fields of the northern North Sea. You can see here the coast 18 of Norway on this side. There's also some oil and gas in the 19 Irish Sea and to the west of Shetlands up here. 20 And the topics I'm going to cover are quite wide 21 ranging. If you just cast your eyes down here I'll try to say 22 one or two sentences on each of these, but when I talk about 23 the North Sea industry I'm talking about small, in shore (ph) 24 vessels. This is a Yorkshire cobble (ph) which can be 25 launched from the beach. I worked as a deckhand on one of 7 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 these vessels for a 2 few seasons. 3 Small in shore (ph) fisheries for lobster in the -- 4 from spring through to autumn and salmon fishing during the 5 summer months and winter long lining for cod and it's not a 6 very comfortable way of fishing. Quite a hard life. 7 And the medium size vessels up to around 100 foot are 8 the typical vessels of the North Sea. I've been scientist in 9 charge on a number of these fishing for (indiscernible) and 10 herrings and gone (ph) on some exploratory voyages. 11 And now replaced (ph) the North Sea -- we start to see 12 these large 200 foot vessels up here in the North Sea. This is 13 the (indiscernible) and (indiscernible) largest fishing port of 14 Peterhead (ph) in Scotland. 15 So I'm going -- quickly go through each of these 16 things. I hope that you'll pick up some stuff that you might 17 think is applicable to future North Aleutian Basin oil and gas 18 industry relationship with fisheries. 19 So the first one is -- first slide is on license 20 conditions and they're quite here to have (ph) -- for each 21 company to appoint a fisheries liaison officer to liaise the 22 government and the fishing organizations. We have produced 23 industry guidance on fisheries liaison which is available from 24 the web site of UK Oil and Gas and we also have a fisheries and 25 offshore oil consultative group which is chaired by the 8 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 government and brings together the oil industries -- and 2 representatives of the oil industries and the fishing 3 industries. 4 Other license conditions can include special conditions 5 laid down for areas where there are particularly sensitive 6 fishing zones. These are built into the conditions that are 7 issued to each operator depending on the area that -- the lease 8 that they're applying for. 9 And then for any new construction operators must 10 consult with fisherman whose views ware taken into account. So 11 that's how we actually do the formal liaison. 12 We've got some pretty good information now on fisheries 13 sensitivities around the coast so -- and there are requirements 14 to notify the government before survey operations, for 15 instance, seismic surveys are undertaken. 16 Here you can see the herring spawning grounds 17 distributed around the coast. And on the bottom slide you see 18 overall seismic sensitivity. And you can see, you know, the 19 major areas of gas and oil are pretty size (ph) sensitive in 20 terms of the species and the juvenile that are distributed 21 throughout the North Sea. 22 We have maps of spawning, nursery and feeding grounds 23 for all of the major commercial fisheries. That's very useful 24 when you're planning surveys. 25 We spoke about yesterday about compensation. Now, we 9 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 put into place in the UK a formal fishermen's compensation 2 fund. This fund is actually administered by the fishing 3 organizations and the purpose of the compensation fund is to 4 pay compensation to any fishermen who picks up oil industry 5 debris in the nets. That -- if the debris is attributable to 6 any one operator that operator will pay. If you're uncertain 7 who the operator is then there is a separate fund to pay 8 compensation. 9 And we've done of design work on subsea structures and 10 this is one of the protection measures that you can build into 11 a subsea well and to -- not really to protect from impact by 12 fishing gear. Our subsea wells can take the impact of 13 substantial fishing gear, although we obviously prefer that not 14 to happen, but this particular design allows the fishermen to 15 reverse the gear back off the wellhead. We have done some tank 16 files (ph) with this using a fishing skipper to manipulate the 17 gear. He was able to in a tank experiment to remove the gear 18 from the subsea wellhead. 19 As one of my colleagues mentioned yesterday we 20 sometimes unfortunately see disasters before we do something 21 about them. We had one case in the North Sea where a fishing 22 vessel caught a pipeline and was dragged down with, I think, 23 the loss of all hands. 24 And we've put into place in the North Sea a system 25 called FishSAFE. This is available to fishing vessels of any 10 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 size. It works through (ph) the GPS on the fishing vessel. 2 The GPS is attached to a comprehensive data base of pipeline 3 and subsea equipment locations. It gives an audible and visual 4 warning if the vessel approaches any subsea equipment so that's 5 FishSAFE developed by the oil industry and fishing industry 6 working together. 7 One other safety measure that we have is for each 8 installation we provide an area of radius 500 meters around 9 each installation and all vessels have to keep clear of this 10 unless they are actually working for the installation. And 11 there are a few exceptions, obviously in case of emergency you 12 are allowed to enter that safety zone, but it's normally closed 13 to fishing and any other activities. 14 Just a few issues to round off now and on some of the 15 concerns I have actually (ph) about our offshore industry. On 16 discharges, all of our discharges are -- discharges into the 17 sea are now permitted and the North Sea is under some 18 international authority framework because it is an 19 international water so many of our discharges are governed by 20 the Oslo and Paris (ph) commission. So there are 21 internationally agreed discharge limits for oil and water and 22 for chemicals. 23 And we have monitored contamination in fish around 24 installations. We have taken specific samples of fish around 25 installations, but the government fisheries laboratories have a 11 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 continuous program of monitoring of metals and other potential 2 contaminates in fish from the entire North Sea. I mean, I 3 think it's pretty true to say that the North Sea fish are about 4 fairly free of contamination from the industry. 5 Noise is also an issue both from seismic and its 6 effects, potential effects on juvenile fish stages and also the 7 effects on marine mammals. We have a large, joint industry 8 project at the moment looking at the effects of operational 9 noise from our industry on marine organisms. 10 The issue was raised yesterday about spills and 11 potentially having a bond in place. In the UK continental 12 shelf we have an arrangement called OPOL (ph) which is the Oil 13 Pollution Offshore Liability agreement whereby UK offshore 14 operators contribute together to a fund to make sure that the 15 industry can cover any liabilities from offshore pollution from 16 the offshore industry independent of the -- what that source 17 might be. 18 And other issues that occasionally come up with the 19 industry are the reef effects. So around these jackets of the 20 platforms you tend to find quite large accumulations of fish. 21 There have been suggestions that these platforms once 22 decommissioned should be left in place and potentially 23 developed as a reef fishery. Reef fishing isn't really 24 undertaken in the North Sea. Although in the Southern North 25 Sea there are some gill netters that fish over wrecks and so I 12 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 don't think there's a big argument there. It's a very useful 2 future use of an abandoned installation. And most installation 3 of this type will be entirely removed in the North Sea. 4 And then the migration of both fish and marine mammals 5 have been raised also as a potential issue for our industry. 6 And on the west of Shetlands, an area where BP are operating 7 there are about, I think, 15 species of Cetaceans (ph), whales 8 and dolphins that migrate along that route. And this picture 9 you can probably see in the bottom, less so in the top, but 10 this was a picture of a killer whale, an Orca that took up 11 residence around Marathon's (indiscernible) platform a number 12 of years ago. It's not a very good picture, but I managed to 13 capture a copy of it in any case. So -- and this young Orca 14 seemed to get a bit friendly with the offshore workers here. 15 So that's really all I wanted to say. I think that's 16 my last slide. My concluding remark is that really we need to 17 inform each other of what we're doing, of what our business is 18 and we need to consult with each other and we need to resolve 19 any problems that arise between our industries. 20 On informing each other I think this is a good venue. 21 And I actually -- I went into my garage just before I left on 22 Sunday. I was looking for a document that we produced in the 23 North Sea that helped explain to fishermen what our industry 24 does and what the impacts were. I thought I'd find it, but I 25 haven't, but what I found was this. 13 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 And this is an EPI document called Fish and Offshore 2 Oil Development. It's a really good booklet and it asks all 3 sorts of questions. You know, what are the impacts of oil 4 spills, what are drilling muds and cuttings. Are drilling muds 5 and cuttings a threat to fish life. So there's about 60 6 questions that are answered. You might want to revisit this 7 book. If someone will take it from me. I'm happy to leave it 8 with you and you might find that there are still copies 9 available. Gives good explanations of the industry and its 10 potential impacts. Okay, thanks. 11 MS. SHADIAN: I think we're going to open it up 12 for some questions. 13 MR. ALLEE: Questions and answers. 14 MS. SHADIAN: Yeah. Yeah, yeah. I didn't know 15 if I was doing this or not. So if anyone has any questions. 16 MR. HARBOUR: Question. Mic? 17 MS. SHADIAN: Okay. We've got one question 18 here. 19 MR. HARBOUR: Sorry, I don't -- I guess this is 20 the only way to do it. I'm Dave Harbor. I just -- to identify 21 myself I retired as a Commissioner on the Regulatory Commission 22 of Alaska a couple of weeks ago and find this sort of activity 23 the type of activity that leads (ph) dispassionate adjudication 24 and I appreciate the form (ph). 25 The question I had for the speakers this morning, I 14 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 wonder if -- maybe this is best answered by you. If the 2 fisheries offshore consultive (ph) group in UK, is that a rough 3 equivalent of what we heard yesterday about the One Ocean 4 concept that's employed in Canada? 5 MR. PARKER: Yes, to answer that question (ph) 6 (indiscernible) similar (indiscernible) to me yesterday as the 7 gentleman was speaking it looked to me as a very similar type 8 of organization. It's in a sense independently adjudicated by 9 the government departments. And there's representatives there 10 of the fisheries, departments from government, as well as oil 11 and gas. There's representatives of the offshore operators 12 association and there's representatives of the Scottish 13 fishermen's federation and I think the National Federation of 14 Fishing Organization. So brought together to solve the 15 problems that can't be solved at the more local level so it 16 looks at the more general questions of oil industry, fishing 17 industry liaison. 18 I'm not sure what the arrangements are in Norway. I'm 19 sure you will have similar arrangements and the Norwegians may 20 want to comment on that. 21 UNIDENTIFIED VOICE: Could you possibly repeat 22 the question one more time for us? 23 MR. PARKER: Yeah, the question really was 24 about the arrangements that we have in the UK sector of the 25 North Sea include the fisheries and offshore operators 15 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 consultative group. And yesterday we heard from our colleagues 2 from Newfoundland and Labrador that they have a One Ocean 3 concept which is another forum for drawing together the fishing 4 organizations, the government departments and the oil industry. 5 And, I think, we'd like to know whether in Norway you have 6 similar consultative arrangements at that level for resolving 7 conflicts and discussing issues between government, fishing 8 industry and oil industry. 9 UNIDENTIFIED VOICE: We have such a group on 10 the national (ph) level and on top of it and the members of 11 this group come from the fishery association and oil companies 12 (indiscernible) and environmental organization, this is on a 13 national level not on the regional level. 14 MS. SHADIAN: Thank you. Is there any more 15 questions? 16 MR. SLADE: Just to mention, I spoke yesterday 17 about One Ocean. Just to clear a point here that the 18 government is not involved in One Ocean. It's the fishing 19 industry and the oil and gas industry, governments only sit on 20 the Board as ex officio members so it's really an outside 21 organization that is a company as such, independent, not for 22 profit so the governments are not involved, but the Coast Guard 23 and the Department of Fisheries and Oceans and the oil 24 regulator sit on the board in an ex officio capacity. 25 MS. SHADIAN: Thank you. I think this was a 16 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 good idea..... 2 UNIDENTIFIED VOICE: Thank you very much. You 3 talked about your fishery in Norway and I'm curious of how the 4 herring stocks are doing in Norway? And the other specie you 5 didn't mention that I'm curious are those wild salmon stocks 6 you referred to in your numbers? 7 UNIDENTIFIED VOICE: I'm sorry, could you 8 repeat that? The audio is not that good going this way 9 unfortunately. 10 UNIDENTIFIED VOICE: I've had the trouble here 11 in the last couple days. The herring industry, the herring 12 fishery in Norway, is it a lucrative fishery, has it come back? 13 The other part of that question is the other species that you 14 mentioned in great numbers are those wild salmon stocks? 15 MR. NORDGARD: Yes, they are wild salmon -- 16 salmon stocks and we are fishing, but no great quantities. 17 They are strictly regulated. Yes, the (indiscernible) herring 18 stock it's -- it has come back and it's very fast growing and 19 the stock is in very good condition. 20 UNIDENTIFIED VOICE: Thank you. And the second 21 part that I have is a report from Norway on the seismic 22 activity that's being going on. There's been reports that the 23 seismic vessels chasing the salmon -- or the fishery vessels 24 out of certain areas where they're allowed to do seismic 25 testing. They were bering referred to as cowboys of the seas 17 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 or something like that this -- of this nature. Can you give us 2 some idea of what's happening to that? Thank you. 3 MR. NORDGARD: Yeah. Yeah. There are at least 4 two questions about (ph) seismic activities. One is the 5 question you mentioned about who -- who should have the place 6 on the sea surface, the fishermen or the seismic ships. The 7 order (ph) of course is seismic itself harm the fish for a time 8 when the seismic got shoot -- or shot or later. It looks like 9 there has been some problems that the seismic ship has done 10 their work at the wrong time, that's to say when the fishermen 11 are out fishing at the actual areas (ph) and no, it has been a 12 bitter (ph) discussion between -- between authorities and the 13 fishermen organization so we've got smoother, but to say there 14 are still some problems about it especially from the 15 fishermen's point of view. 16 The seismic itself if it harmed the fish or juveniles 17 or eggs or whatever there are some -- some seismic (ph) trials 18 going on to see if it's -- if we can see any damage. It's -- 19 the (indiscernible) is not given yet. Thank you. 20 MR. EIDSVIK: I can support Hans (ph) and say 21 that we do know (ph) that it's not necessary that so many 22 company operate at the same time. We think also that 23 operations must be better coordinated. (Indiscernible) must be 24 adopted also to (indiscernible) fishery activities. Lost 25 income has to be compensated, that means also for industry 18 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 onshore. And we need more (indiscernible) technology for 2 seismic also. 3 MR. GREEN: I've got a question. Thank you 4 very much for your presentations. They're very informative and 5 useful. 6 My name is Ben Green. I'm with the Department of 7 Natural Resources for the State of Alaska and I've got 8 questions about discharges. I'm hoping that you can speak 9 somewhat about discharges and I'm referring not only to the 10 cuttings and -- the muds and cuttings from drilling, but also 11 produced water and what we call gray water and black water this 12 is sedentary and other discharges? 13 I was very interested Dr. Parker in his last 14 presentation from Glasgow he was talking about international 15 waters and being held to international regulations in the 16 Scottish/English area there. I am not familiar with the 17 process of regulating discharges in Norway other than the fact 18 that we heard and I don't know the details. You know, we hear 19 oh, they -- in Norway it's a no discharge policy for both 20 exploration, development and production and then later on you 21 hear that while no discharges, actually doesn't mean no 22 discharges, so I would appreciate some clarification? And 23 thank you very much. 24 MR. EIDSVIK: Yes, I think we have 25 (indiscernible) years to reach this goal of no discharge 19 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 (indiscernible) especially of produced water. That's very 2 important for us. I think the next goal is to get the emission 3 from the carbon (ph) to zero, that's very important. 4 MR. PARKER: I'll give a brief answer, too, 5 from the UK sector. In fact, the area of the Oslo and Paris 6 Convention runs to up almost I think to (indiscernible) in 7 Norway so that that entire area is actually covered by the 8 international convention which is called the Oslo and Paris 9 Convention. And that is the convention that provides the 10 framework regulation from all discharges from the offshore 11 industry. And produced water is regulated to that 12 international standards. All of the member states agreed the 13 oil and (ph) water discharge conditions. 14 And on an annual basis all of the countries report all 15 of the discharges from their offshore installations so this 16 information is all very transparent. 17 As to the question of produced water it is possible in 18 some areas to re-inject produced water, but it's not possible 19 everywhere so some installations can do it, some can't. And, 20 again, you really need to go back to the science of this 21 because over many years we carried out experiments on produced 22 water and the toxicity of produced water. There's a lot..... 23 (Indiscernible question and answer portion) 24 MR. ALLEE: Now we're going to move into 25 another interesting panel on Oil and Gas Impacts. And the 20 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 moderator of the panel is David Holt. David is the managing 2 partner of HBW Resources, a private company whose mission is to 3 promote policies that encourage the development of energy 4 resources that improve energy security, economic development 5 and responsible environmental stewardship. 6 In early 2006 David became the executive director of a 7 non-partisan organization, Consumer Energy Alliance and that 8 Alliance was formed to help support thoughtful utilization of 9 all domestic energy resources to improve domestic energy 10 security and reduce consumer prices. 11 He's also an adjunct professor with Bodo University 12 Graduate School of Business and Master of Science in 13 Engineering Management Program. So, please, welcome Mr. David 14 Holt. 15 MR. HOLT: Thank you very much, Brian. We are 16 missing a speaker. There he is. Looking for you. Thanks for 17 being here. 18 Good morning. Welcome to our panel on Oil and Gas 19 Impact Implications. I think a lot of questions that were 20 raised and some of the issues that were raised yesterday we'll, 21 kind of, start to lay some foundation for the dialogue to help 22 answer and provide some information on those issues. 23 So with that I'd like to, kind of, introduce our entire 24 panel here very quickly and then ask them to come up here one 25 at a time and then we'll take Q and A at the end. 21 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Our first speaker is Dr. Jerry Payne with the 2 Department of Fisheries and Oceans in Newfoundland, Canada. He 3 is a research scientist with the department and an adjunct 4 professor of Biochemistry at the Memorial University of 5 Newfoundland. 6 Our second speaker who will discuss the permitting 7 process and all the steps involved in going from development to 8 possible exploration and production with be Cindi Godsey with 9 Alaska Operations office of the U.S. Environmental Protection 10 Agency. 11 And our third speaker who will talk about drilling 12 fluids and more specifically mercury in drilling fluids I 13 believe is Dick Prentki with the Minerals Management Service. 14 He's an oceanographer there. 15 So with that please help me welcome Dr. Jerry Payne. 16 DR. PAYNE: Okay. Basically this is the 17 physical side. Basic -- most of my background is in discharges 18 and the drilling muds, production waters, what have you. And 19 my basic -- I'm an ecotoxicologist so and I just recently got 20 into the seismic end of things the last few years. 21 Today I have only 15 minutes on seismic, but I just 22 prepared a paper for a two day discussion in Ottawa next week 23 so basically I'm jumping from 15 minutes to two days next week 24 to -- for people to throw snowballs at me. 25 This is the oil development on the Grand Banks, 22 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Newfoundland. Of course one of the worlds richest fishing 2 grounds. And Exxon Mobil, Husky, Petro Canada are operating 3 out there. Some of the similar fisheries to here (ph) and 4 again it's one of the worlds, you know, richest fisheries. One 5 of the keys things here is there's excellent monitoring 6 programs in place, the EEM programs are, you know, extremely 7 good. And they incorporated the early warning systems for 8 effects on fish and shellfish. We look at basically the size 9 of the benthic family structure, we look at early warning 10 systems in the fish and we're looking at scallop and crab and 11 also flounder species. But one of the key things there is the 12 early warning system that we -- in most of the EEM (ph) 13 programs. 14 Again the coexistence, what's being discussed there and 15 as Gordon mentioned yesterday there's a transshipment terminal 16 in Placentia Bay. And there's concern there with fisherman, 17 what have you and, of course, the similar discussions here 18 about coexistence of the fishery and the oil industry. 19 A few pictures, intimidating towers. and somewhat -- 20 but it's somewhat unique. You know, most of the oil 21 development in Newfoundland today has been in the offshore, 22 it's not near shore. And there's a little bit of difference in 23 oil development say near shore versus the offshore. 24 Again this is, I can't say a typical community, but 25 possibly a community close to where Gordon Slade was born in 23 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Placentia Bay. 2 Small boat fishery is traditional besides the trawler, 3 the large trawler fleets. 4 Crab is one of the main species that's fished. It used 5 to be cod. Somebody mentioned yesterday about the size of the 6 stocks. (Indiscernible) in the oceans, the cod fish 7 (indiscernible) 800,000 pounds a year on the Grand Banks. 8 We're out there now monitoring, we can drag possibly for 20 9 minutes and we won't strike cod fish, not one. 10 But in the bays there's some still fishing going on in 11 the bays in Newfoundland, but basically the offshore stocks of 12 cod are somewhat decimated going back and it's under moratorium 13 at the moment. 14 And a couple Newfoundland fisherman in Placentia Bay. 15 Getting onto the seismic basically, I think we jumped 16 there. You know, it's a seismic ship with heavy sound guns, 17 hydrophones and, of course, principally it's a different 18 density, you hit rock it's a different density with oil and the 19 signature is somewhat different. That's (indiscernible) 20 crudely for a physical acoustician. But basically that's -- 21 and those hydrophone streamers go out to seven or eight 22 kilometers basically. And the guns, could be 40 to 50 guns 23 from the vessel. 24 Here is a fairly small rig, but you can see the guns 25 going back there. And somebody mentioned yesterday again we 24 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 know -- I won't get into it, we know that (indiscernible) 2 larva, very close to the guns, one or -- say within possibly 3 one meter from the gun or whatever down, and may be mostly 4 turbulence, (indiscernible) affect larva, that's well known. 5 But what's not so well known is the business of the -- what I 6 call delayed mortality and morbidity, what I call the sub- 7 lethal effects area which we have been working on. 8 And here again the basically four different points. 9 There's a -- again (indiscernible) debate about okay, of fish 10 avoidance. Basic -- there's studies have shown fish avoid 11 somewhat seismic, other studies have shown fish hatches 12 increases, okay, with seismic. 13 There's one study, again taken out of context, 14 basically one study by the Norwegians show avoidance, but 15 basically the catch statistics when you look at them 16 critically, statistically, the catch statistics of that survey 17 were no different from any other survey. And they often point 18 -- they often use that study, but they never use the other four 19 studies which found basically no difference. 20 Lobsters is one of the ones we've looked at. Again, we 21 don't have a seismic boat, it takes $100,000 a day to rent a 22 seismic ship. Those are -- we generate sounds in the lab 23 equivalent to what you could get. Okay. The decibels is 24 either in the lab or in the -- using longliner just offshore. 25 So basically the sound exposures, we simulate close to what you 25 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 would get in the seismic survey. And lobsters is a good -- 2 also a good proxy say for crab which we looked at somewhat. 3 And the point to be made is if you have a seismic 4 survey you will never see dead bodies, it's not a matter of 5 seeing in the old days explosives. We've looked at in the lab 6 codfish, crab, lobsters, smolt, jellyfish, shrimp cunners and 7 capelin, you'll never see dead bodies, okay, you can't, but you 8 will, so it's a questions of sub-lethal effects, the delayed 9 mortality/morbidity, you know, effects on reproduction down the 10 road or effects on molting. That's the key area that possibly 11 we're adding a little more work, but that needs to be done. 12 My area of interest, again I'm an ecotoxicologist, 13 whether it's chemicals or physical, in looking at biochemical 14 injury, cellular injury, organ and reproductive and behavioral 15 basically, those types of sub-lethal effects. 16 In lobster, again some work on crab, but I don't have 17 time to get in to it. Basically look at lobster and we expose 18 and we keep them in the lab for several months, okay, look at 19 and we monitor various indices. And you'll see the various 20 effects investigated: lobster survival, turnover rates, leg 21 loss, blood and various blood parameters that we look at in the 22 lab. 23 And several experiments with lobster and, you know, we 24 keep them up to eight months monitoring for effects. No 25 effects on lobster survival, turnover rates. Turnover rates 26 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 again is one (indiscernible) the brain structure in the 2 animals, there's some suggestion that's created about years of 3 fish and I can comment on that later if people want to, and leg 4 loss, what have you, no effects on those critical. 5 But what we did find, of course, was some subtle sub- 6 lethal effects on blood proteins, blood enzymes, blood calcium 7 and the interesting thing we found -- the most interesting 8 thing we found possibly in terms of what you call the clinical 9 effect was increased food consumption, okay. In the four 10 trials we carried out we actually (indiscernible) increase in 11 metabolic activity. But this is retained, okay, it's just not 12 for one day sort of with the increase in food consumption. 13 So again having some background in the biomedical 14 business, you know, if we have severe brain damage you won't -- 15 you won't have any appetite, but if you have modest brain 16 damage, one of the characteristics of modest brain damage in 17 humans or in rats models is an increase in food consumption. 18 And that's what you actually get, we picked up in the lobsters. 19 And we don't know why, we'd like to repeat again some of those 20 experiments again, but we certainly -- we picked up the 21 increase in food consumption. 22 It's the pathology, again the gold standard for effects 23 is just the pathology. This is a cross section of a liver of a 24 lobster, okay, and you can see that -- if you look at the 25 experiment, you see those little dots, there's accumulation of 27 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 glycogen in the liver so I don't know, some just -- some small 2 (indiscernible) change in the liver of the animals exposed to 3 seismic. 4 For relevance it's -- again it's in terms of decibels. 5 What we exposed, we used a gun that we bring it -- we exposed 6 about 200 decibels, okay. So a gun at 240 decibels would knock 7 (indiscernible) 100 meters in the water column so it's 8 certainly relevant that -- what we're doing in terms of the 9 exposure levels. 10 This is an important slide. (Indiscernible) very 11 difficult to find effects in the field. There's a -- if you 12 read this paper they say there's no effects of seismic. If you 13 read the statistics, the statistics points out that you need at 14 least a 50 percent kill to actually pick it up in a standard 15 fish survey. So basically you can have a severe effect and not 16 pick it up because -- and, of course, any fish we 17 (indiscernible) natural variability. 18 Look at some codfish studies, again those were fairly 19 (indiscernible) number of exposures, a number of exposures just 20 looking for indices to look at. Again the survival feeding 21 behavior and some work on gene expression. 22 And in codfish, again, was interesting thing was this 23 food consumption thing, an increase in food consumption which 24 is retained up for a number of -- so it looks like there could 25 some subtle kind of neurological disturbance. And again I 28 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 caution that this -- those codfish were exposed to a large 2 number of shots. But we were looking for worst case situation 3 and then go back and we're following up some of that work at 4 the moment. But the increase in appetite, and it could be some 5 sort of -- looks like some sort of neurological damage. 6 This fits again the -- there's studies in the Norway 7 which shows a fish catch was sometimes increased after a 8 seismic boat goes through. And possibly the fish are going -- 9 are steered towards the bottom and this is what we found in the 10 trials of codfish that the fish, okay, went to the bottom and 11 it just wasn't for one day, they went down for about two weeks 12 towards the end of the -- bottom of the tank. So they prefer 13 the bottom of the tank to the top. So this fits the increase 14 in the catch rates around some of the seismic vessels in the 15 North Sea. 16 Although again you have the counter, if the fish are 17 migrating you -- you know, you might have some avoidance or 18 whatever. 19 Look at again -- being a biochemist I looked at some 20 genetic effects on gene regulation. This is the brain of 21 codfish after exposure to seismic. Can you see this -- this 22 rocket shooting off there. The top is what you call gene for 23 up regulators so there's virtually hundreds of different genes 24 that go up and there's hundreds of different genes that go 25 down. So basically you can see that the signal is touching the 29 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 animal's brain because you have a large number of genetic 2 upswings and downswings in the brains of the animals that we 3 exposed. 4 Looking at some work on monkfish at the moment. Again 5 the fishermen's union, this creature lays its egg in veils and 6 the egg floats on top of the water. And the fishermen's union 7 in Newfoundland, the FSAW (ph) is doing some work, we're 8 helping with that, looking at say the effect of seismic on the 9 fish eggs at the surface of the..... 10 I don't want to get into to much heavily on the snow 11 crab. We have carried out some work on snow crab. This is the 12 -- of course, this is just the female, the eggs cut out. And 13 it was mentioned yesterday I think about -- there was a study 14 in Canada with snow crab. We haven't been able to repeat some 15 of that work, okay, the original study was basically different 16 animals, they were caged on the bottom of different areas and 17 there's some small changes which can be attributed to natural 18 variability. And we haven't been able to repeat some of that, 19 but, I mean, the case is not closed (indiscernible) on snow 20 crab or whatever, that we would like to see a little bit more. 21 And one of the key things that I would like to see is a 22 (indiscernible) extremely difficult to do, is molting, but 23 molting, okay. And those animals are very difficult to deal 24 with too, snow crab, because you've got to expose them and keep 25 them in the lab for up to a year before the eggs will develop. 30 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 So it -- it's extremely difficult to do this kind of work. 2 And, of course, you can't do it -- you can only do it in the 3 lab or small in the field because -- well, it's -- you know, 4 (indiscernible) large program. 5 Now if you're rich like the Norwegians, they are -- 6 they've had programs up to a couple million dollars, you know, 7 with the seismic ships. But there's basically very little work 8 say on what you call the sub-lethal effects. And so we're not 9 saying that basically -- I'm certainly not saying those are 10 preliminary experiments that, you know, it's all -- it's all 11 crying doom with seismic in terms of sub-lethal effects. But 12 it would be premature for marine mammals there's 180 DV or MS 13 (ph) for the guidance that they use for marine mammals. And 14 would be premature at this stage to say it was guidance for 15 fish or shellfish. We need a few -- at least a few 16 representative type studies to find at what energy levels, 17 okay, is what sound levels could have effects. And some key 18 things is like on reproduction and in the case of snow crab or 19 lobster, say molting. 20 So basically the conclusion is it is premature to adopt 21 reference levels. We need a few representative experiments, I 22 think, you know, on the fish and shellfish. Because most of 23 the work today, there's virtually tens of millions of dollars 24 have been spent on seismic on marine mammals, I mean, it's 25 certainly of the tens of millions range. But a few critical 31 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 experiments are needed on fish and shellfish. 2 As I point out at the end there, we need -- we can't at 3 this moment say, but -- and we need it (indiscernible) 4 assurance, but it's not -- you know, to me -- you know, you 5 should not over read possibly those results. There should be a 6 little bit more work there going on in some of those areas, but 7 I wouldn't call for a -- I wouldn't call for a make work 8 program for universities for the next 10 years for that. 9 So anyway that's it. Thank you. 10 MS. GODSEY: Okay. I've geared this 11 presentation more towards energy permitting, but a lot of the 12 requirements and the processes are applicable to seafood 13 processing also. So -- okay. 14 Okay. NPDES, the National Pollutant Discharge 15 Elimination System, is the permitting process authorized under 16 Section 402 of the Clean Water Act. And in Alaska at the 17 present time EPA issues the permits for these discharges. The 18 permits are meant to control the discharge of pollutants from 19 point sources into waters of the U.S. They have to be -- 20 probably consistent with the Coastal Zone Management Act which 21 is administered by the state of Alaska. And in state waters 22 the permits have to be certified by DEC as complying with water 23 quality standards. 24 Now in the -- on the outer continental shelf these are 25 in federal waters greater than three miles offshore or outside 32 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the baseline. The state doesn't certify the permits in these 2 areas or and sometimes we have permits that cross boundaries 3 and they'll certify the portion that applies to state waters, 4 but not the portion that applies to federal waters. 5 And my nod to another media is that in the OCS, EPA 6 issues the air permits, not the state of Alaska. 7 And currently under the program these are the 8 activities that EPA has undertaken. We draft the permits, we 9 issue them, we conduct compliance inspections and track 10 compliance and take enforcement action where necessary. And I 11 say currently because DEC is actually in the process of 12 preparing an application to take over the permitting program 13 for those areas that the state can. So that application is due 14 into EPA sometime in the spring. 15 Now in the oil and gas realm for oil and gas 16 explorations, this regulation, 122.28(c) in 40 CFR says that 17 EPA shall issue general permits for exploration activities and 18 also in the regulation is the requirement that we draft a 19 permit -- be in the process of issuing a permit when MMS is at 20 the draft EIS stage and also include a schedule for the final 21 issuance of the permit which is supposed to coincide with MMS 22 and sometimes it does and more often it doesn't. 23 And this is the general permit process. EPA identifies 24 that a general permit is necessary, an MMS lease sale would be 25 the impetus in the OCS. We have to deal with the services for 33 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 endangered species and essential fish habitat and have to ask 2 if the tribes in the area would like to participate in tribal 3 consultation. 4 We develop a draft permit which will contain the limits 5 and conditions and will have EPA's date and tribal review of 6 the pre-draft and generally at this time if the state needs to 7 certify, they'll provide us a draft certification to be 8 included in the public notice. 9 Sometimes we have a public hearing, sometimes we don't. 10 We're not required to. If there is interest in the process we 11 can schedule one with the public notice. If we don't schedule 12 one people can request that we hold one. 13 After we receive the comments we prepare the final 14 permit and the response to comments as well as the 15 administrative record. The state will do the final 401 cert, 16 we'll wrap up any ESA consultation that we have and issue the 17 final permit. 18 When the permit is issued it's a 30 day time frame 19 before the permit is effective. And but the appeal process for 20 the permit -- for a general permit it is the ninth circuit 21 court and the appeal period is 120 days after issuance. So the 22 permit goes into effect before the appeal process is over and 23 the permit actually stays in effect unless the court says it 24 isn't in effect. And so if there is an appeal then we'll work 25 either through mediation or reissuance of the permit and come 34 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to a final agency action. 2 Now the exploration permit for the Chuckchi and 3 Beaufort Sea contains limits and requirements, conditions for 4 these 14 different types of discharges. When we're considering 5 a permit for the North Aleutian Basin to go with MMS' lease 6 sale, these are likely the same types of discharges that you'll 7 see covered in the act. 8 To evaluate the impacts that issuing a permit may have 9 on the environment, 40 CFR 125, subpart (m), is the section of 10 the regulations that contain the requirements for ocean 11 discharge criteria. And it requires that EPA make a 12 determination that a discharge or in the consideration of a 13 general permit, the possibility of multiple discharges wouldn't 14 have -- won't cause unreasonable degradation. And we develop 15 in conjunction with the draft permit publish an ocean discharge 16 criteria evaluation for this purpose or an ODCE. 17 And just a general quick sketch, an ODCE is actually 18 required by regulation for any discharge outside the baseline 19 which is that solid -- okay, let's see if I can do this. Nope. 20 Okay. And the computer guy is gone. 21 UNIDENTIFIED VOICE: He's coming right back. 22 MS. GODSEY: I know, I see that. I won't try 23 to work the red light any more. 24 Anyway, the baseline is a -- generally a designated 25 line and it can cross estuaries and bays and inlets and the 35 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 like. And the ODC is required outside of the baseline and then 2 inside the baseline it's not a requirement. 3 Several of the conditions that would be considered 4 unreasonable degradation, significant adverse changes in the 5 ecosystem, a threat to human health, loss of esthetics, 6 recreational, scientific or economic values. Not just that, 7 but are unreasonable in relation to the benefits of the 8 discharge. 9 And these are slides that I hate to see in a 10 presentation, but there's 10 criteria that EPA have to evaluate 11 when making the determination of unreasonable degradation. And 12 basically it's, you know, the potential for bio accumulation or 13 persistence of the pollutant; the transport mechanisms and how 14 they could -- how chemicals could be changed; what the 15 biological community consists of and their vulnerability to the 16 exposure -- to the discharge; the importance of the receiving 17 water itself to the biological community, are there spawning 18 area, migration paths and the like; and then the existence of 19 special aquatic sites, are there marine sanctuaries in the 20 area, wilderness areas; and then the potential impacts on human 21 health; the existing activities in the area; the applicable 22 requirements of the coastal zone management plan for the area 23 in question; other appropriate facts; and finally what we base 24 our permit limits on, the water quality criteria that are 25 developed pursuant to this section of the Clean Water Act. 36 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 And this is my contact information. I'm an MPDES 2 permit writer. We do have some people who work in our office 3 specifically with oil and gas projects. Diane Sauderlind (ph) 4 is our oil and gas team lead, she would be here today except 5 she just got back from Hawaii at 6:00 o'clock this morning. 6 And basically either of us could be reached at that toll free 7 number. And the direct number for the office is 271-5083. 8 Thank you. 9 DR. PRENTKI: I'm Dick Prentki, Minerals 10 Management Service here in Anchorage. I've been working for 11 MMS since '81 and I've been in the state mostly since I got -- 12 went to graduate school in Fairbanks in '69. 13 A lot of this talk is from Dr. Mary Boatman in our 14 headquarter's office who's working on the mercury issue in 15 drilling muds in large part because of this headline that came 16 out in the Gulf of Mexico newspapers, Mobile Register in 2001 17 and went on this series of articles for a couple of years. The 18 reporter writing these articles had a different interpretation 19 of the data than the scientists that did the work or our 20 science review board and we don't quite agree with it, but it 21 did cause a mercury scare. 22 I want to briefly overview mercury and environment, 23 mercury and drilling fluids and then get a little bit in to 24 what our study results have been on the mercury issue. 25 Mercury in the environment. Okay. Elemental mercury 37 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 is a liquid, that silver you see in the thermometer, it's also 2 a gas in the atmosphere. Inorganic mercury is a salt or it's 3 actually a metal cation. And then also present is the mineral 4 cinnabar, which is mercury sulfide. You can find that on the 5 beach at Nome. 6 Organic mercury, methylmercury, is the one that's most 7 worrisome, it's a -- what's usually taken up by the biota and 8 the most toxic form. In conversion of mercury to 9 methylmercury, it's a natural process, it's converted by 10 bacteria, but only a few species of bacteria under a fairly 11 special set of circumstances. It has to be mildly reducing, 12 can't be strongly reducing, can't be oxygenated. So there's 13 only a very small part of the environment where it can happen. 14 And it can occur without bacteria, but rarely, and it's 15 possible that some plants may also be able to convert mercury 16 into methylmercury. 17 The effects of methylmercury -- excuse me, mercury 18 including methylmercury, and you can get this from both the 19 inorganic form, cation form and for methylmercury a 20 deterioration of the nervous system, impairs hearing, speech, 21 vision and gait, causes involuntary muscle movements, corrodes 22 skin and mucus membranes, causes chewing and swallowing to 23 become difficult. These are known. 24 The mercury in the industrialized society -- pre- 25 industrial society was used to make mirrors and to process 38 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 felt, and that's felt in hats is where the term mad as a hatter 2 came from because of the mercury symptoms in the people that 3 made hats. 4 It was also used in gold mining and this is not Pebble 5 type gold mining where we're extracting gold, but where you 6 capture the gold in a mercury amalgam and then you use a 7 furnace or a stove to boil out the mercury and leave the gold. 8 Some methods like that were used in Nome as recently as 1987 9 before the EPA stopped them, but it's more of a historical use 10 than a current use except in, I think, Brazil or some places 11 now where they have some still going on chlora-alkali plants, 12 paper plants, it's used as a fungicide in our culture, use to 13 be used as a fungicide in latex paints. The dentist uses it 14 when he puts -- fills your cavities and in some household 15 products. Here's some examples of household products and oh, 16 on the upper left it's starting to become an issue now because 17 of so many florescent light fixtures and they use mercury and 18 they're becoming a waste issue. 19 Mercury emissions. It's -- mercury's a global 20 pollutant and it gets mostly into the environment through air 21 emissions and then deposition. Major sources are coal 22 combustion and non-coal combustion, this is like from municipal 23 incinerators and things like that. Manufacturing is there. 24 Miscellaneous sources which is a very small portion, you would 25 include things like drilling muds. It's not a major source of 39 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 mercury in the U.S. 2 This is -- shows the -- where fish consumption 3 advisories have been issued by either the state or EPA 4 regulators. And most of the states in the U.S. have had them. 5 As of last month Alaska would now be blue because EPA did issue 6 a warning about eating some fish in places like Noatak Preserve 7 if lake -- specifically related to lake trout in some of remote 8 lakes. It wasn't in terms of the fish that most people eat and 9 the fact they found high mercury levels in those fish is not 10 too surprising. Fish are notorious for mercury. Long lived 11 fished that eat fish are the ones which accumulate it, the -- 12 things like pike or lake whitefish are almost always high in 13 mercury no matter where you find them. 14 U.S. industrial report consumption of mercury, little 15 bit outdated, but it shows what's happening. Mercury 16 regulation has caused a tremendous drop off in the amount of 17 mercury being used now, particularly mercury batteries. I 18 can't even see what that bottom line is from here, but 19 essentially it's use of mercury has gone way down. And it's 20 also -- the drop off from mercury shows up when you look at 21 pores (ph) either in ice or mostly sediments in North America 22 or the north hemisphere. 23 Over the last 100 years there's been -- and there will 24 be a chart that shows this on the next page, but a 20 fold 25 increase in mercury deposition, 70 percent of it from 40 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 industrial anthropogenic sources, but over the last 10 years 2 that deposition declined so we're currently only about 11 fold 3 over preindustrial background. 4 And this the chart showing that. The blue dots are 5 about what we think background is, these are from ice pores of 6 a glacier in the lower 48 western. You can see some peaks from 7 volcanic eruptions, Krakatoa, Mount Saint Helens. And then you 8 also on the -- a little peak from the gold rush days. But I 9 want to -- you note these two yellow or orange arrows here, 10 this is about 1920, this is about 1980. And I'll show you the 11 next graph. Also look at the general shape of the increase 12 concentrations going up to here and then a decrease in the most 13 recent decade. 14 And this is some data for Alaska from Shelikof Strait 15 and Homer Boat Harbor that we did as part of a study to look at 16 -- actually we're looking for oil industry pollutants down 17 current of Cook Inlet. Homer Boat Harbor would be up current 18 of it, but it's -- this is mercury on this line here, this is a 19 definite sediment core, this one's mercury and show a typical 20 curve in Shelikof Strait. 21 And over here is -- this is -- right across, this is 22 where 1920 is. And this is 1980 right here. This one, 1980, 23 is down here. So look at this group in particular. And 24 there's essentially no increase, we don't see the same sort of 25 build up of mercury that we see in the Lower 48 in Shelikof 41 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Strait or Cook Inlet. And apparently we've missed some of that 2 mercury boom that they've had in the Lower 48. So our 3 background levels here look like they may not be as 4 contaminated as they are elsewhere. 5 Okay. Mercury and drilling fluids. Okay. Mercury's 6 present and primarily in barite as trace contaminant. Barite's 7 used as a weighting agent to make mud heavy enough to keep the 8 fluid down the well. It's about 40 percent of the fluid in the 9 average and concentrations of mercury have to be less than one 10 part per million by regulation. In the '70s and early '80s, 11 they could be -- they weren't regulated that way. This is one 12 gram of mercury and that in one ton of drilling barite is what 13 is allowed just to give you an idea of what we're talking 14 about. 15 To get mercury into fish from the drilling mud would 16 have to come from the barite. And there's several steps which 17 are listed on the slide, but I only want to relate -- emphasize 18 the ones in blue here. Okay. Mercury must be released from 19 the barite. The mercury has to be methylated and then has to 20 be incorporated into the food chain. Others are also 21 important, but I just don't have time to talk about those 22 today. 23 Mercury in the sediment. There's a lot of studies that 24 talk about what level of mercury is -- causes problems in the 25 sediments. Well, levels less than .15 rarely cause problems 42 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and actually background mercury in sediment is often about .05 2 to .15. Frequently problems are above .71 parts per million. 3 The Gulf of Mexico monitoring experiment called GOOMEX, 4 looked at mercury levels along platforms particularly in 5 relation to drilling muds and removement. They looked at five 6 platforms, five distances, 50 meters up to 3,000 meters, did 7 replicate samples along each of the radii in four sampling 8 periods. Results, they -- at two of the 50 meter locations at 9 one of the five platforms, they found concentrations above that 10 .71 part per million. And that mercury was from the drilling 11 mud. A drilling occurred between 1975 and '83, prior to the 12 one part per million limitation, and in that one case the 13 drilling mud cuttings were shunted to within 10 meters of the 14 bottom to keep the muds from disbursing, they did not want the 15 muds to get to the flower gardens which was a protected area. 16 So in this case they tried to concentrate the muds. So there 17 was a little bit of mercury there. 18 However when you look -- they also collected samples 19 from a biota from within 100 meters of the platform and as far 20 as 3,000 meters using invertebrates, shrimps, crabs and fish, 21 fish that were sampled, some fish stomach contents. Results 22 indicate that there was no statistical difference between the 23 near and far samples and they concluded that the platform did 24 not support enhancement of mercury in marine organisms. 25 Another study we did, a report by Dr. Jerry Neff, 43 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 reviewed a wide range of literature. Mercury in the Gulf is 2 primarily from natural sources, only .3 percent of it came from 3 oil industry discharges. No evidence that mercury discharges 4 was getting into seafood. 5 Another study we looked at, a report by Dr. Trefry, 6 direct measurements of total mercury and methylmercury 7 estimated at 99.9 percent of the methylmercury is generated 8 from natural mercury and not from our -- and not from drilling 9 muds. 10 A third study looked at whether mercury can be 11 solubilized from the barite under various conditions in the 12 various conditions where seawater reducing conditions and mild 13 acid which be similar to digestive juices in the stomach. They 14 concluded that mercury's probably present in barite as a 15 sulfide mineral and that it cannot be leached out of the barite 16 under standard environmental conditions. In other words they 17 tried to leach it out and couldn't get it out. 18 We've done some, or a little bit of work here in Alaska 19 on mercury issues. We had a workshop and two studies relating 20 to gold mining off the Nome coast. And that study -- we did 21 look at salmon, found very low mercury levels in salmon. And 22 we looked at human hair and found nothing in human -- no 23 problem with heavy subsistence food users who eat a lot of 24 fish, they have low mercury levels also. 25 Sediment quality in depositional areas in Shelikof 44 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Strait and outermost Cook Inlet, that was looking at whether 2 any drilling effluents were getting into the sediments down 3 current of Cook Inlet. We found no significant signals there 4 and none for mercury as I showed you. 5 We've also been looking at this in the Beaufort Sea 6 near the Prudhoe Bay area and we're looking at -- we've been 7 tracking trace metals and hydrocarbon levels there since the 8 '80s and we're not seeing any significant accumulation there 9 either. So there's some local hot spots where they had some 10 drilling muds and those spots may stay there, they're burying 11 the sediment, but there's no general increase in background 12 levels. 13 Just a quick summary, I think I'm out of time. Mercury 14 is a global pollutant, many sources of mercury in coastal 15 marine waters. Drilling discharges do contain small quantities 16 of mercury, thus far there's no evidence the oil and gas 17 activities contribute to mercury in fish. 18 MR. ALLEE: Not a lot, but I think we have 19 about 10 or 15 minutes for questions, open it up to a little 20 dialogue, Q&A. 21 UNIDENTIFIED VOICE: A couple of questions, I'm 22 (indiscernible). The question I had is when they were doing 23 that dredging off the coast of Nome (indiscernible) mercury in 24 some of the walruses and sea lions (indiscernible) as I recall 25 on the liver they found some mercury and there was 45 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 (indiscernible) from the Nome area and it was..... 2 DR. PRENTKI: Yeah, the -- I don't recall what 3 the concentrations were in the marine mammals. The marine 4 mammals do -- some of them are -- do accumulate mercury in some 5 of the organs and that usually is stored as a, I believe, 6 organic mercury. But I don't think there's anything 7 attributing that to the gold minding up there. The problem 8 they had in the data we saw was that according to their water 9 quality numbers they were putting a heck of a lot of mercury 10 into the water. The waters come -- that they had the reports 11 were higher than background and they kept going up as they 12 sampled and they finally found out they were contaminating 13 their samples in the lab by doing gold amalgamation in the same 14 place they pulled the water samples. When we had somebody else 15 take a look at the water samples, or do water analyses. The 16 numbers are very low, but I don't recall the -- too much about 17 the water..... 18 UNIDENTIFIED VOICE: So now the rule is just 1 19 percent (indiscernible) mercury that's allowed..... 20 DR. PRENTKI: One part per million. 21 UNIDENTIFIED VOICE: One part per million. Who 22 monitors that, just samples are sent in to..... 23 DR. PRENTKI: There is an end of well analysis 24 that has to be sent in to EPA. I've not seen those because we 25 don't get them. When they did our Gulf of Mexico studies, they 46 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 did look at what the concentration they found in mercury, and 2 the average they found in the drilling muds was about half a 3 part per million. So they were well below that on average. 4 UNIDENTIFIED VOICE: So your saying that the 5 company sends in their samples basically..... 6 DR. PRENTKI: I'm not sure. 7 MS. GODSEY: The analysis for drilling fluids 8 and drill cuttings, is a requirements of the exploration 9 permits that EPA has now. And I believe in -- it's been a 10 while since I've looked at one of these permits, but I believe 11 that mercury in the muds and cuttings is one of the tests that 12 they have to evaluate for. And yes, the NPDEF program is a 13 self monitoring program. 14 UNIDENTIFIED VOICE: Thank you. 15 DR. PRENTKI: But they send in samples of gray 16 -- were you going to add something to that? 17 UNIDENTIFIED VOICE: Well, yes, I've worked for 18 Shell and I remember back (indiscernible) those test results 19 (indiscernible)..... 20 UNIDENTIFIED VOICE: Can't hear you. 21 UNIDENTIFIED VOICE: I'm sorry. Greg 22 (indiscernible) for Shell and I just wanted to clarify 23 (indiscernible) is tested by an independent lab. I think we 24 were taking (indiscernible) and I don't know if the EPA or if 25 other people come in and check (indiscernible). Typically 47 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 those tests would show, I think it's a one part per million 2 limit. Typically it comes in at either .2 -- a range between 3 .2 and .9 parts per million. And I think what Dick said is 4 accurate, if you look an average it's about a half a part per 5 million (indiscernible)..... 6 UNIDENTIFIED VOICE: My name is (indiscernible) 7 environmental consultant. You might also have checked out some 8 of the previous studies (indiscernible) in Alaska 9 (indiscernible) and three or four in the Beaufort Sea and in 10 the late '70s and early '80s. In none of those studies did 11 they find any (indiscernible) of mercury above (indiscernible) 12 less than a part per million. Also on the elevated mercury in 13 marine mammals, that's fairly common and it's fairly well 14 documented from a bunch of Canadian literature from the '70s 15 (indiscernible) accumulate in marine mammals (indiscernible). 16 UNIDENTIFIED VOICE: Two questions, first for 17 Dick. Who funded your studies? 18 DR. PRENTKI: Most of ours are funded by MMS. 19 I don't guarantee there was not some co-fund -- there was 20 probably some co-funding on some of the Gulf of Mexico studies, 21 but I don't have those numbers. But the Alaska ones are funded 22 by MMS. 23 UNIDENTIFIED VOICE: Okay. And then for 24 (indiscernible) Australia and coincided with some studies that 25 were done on the East Coast on seismic, and I'm curious if in 48 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the studies that were done around Newfoundland there was 2 anything that was looked for (indiscernible) fish stocks 3 following the -- or concluding the studies here it was noted 4 that after seismic tests around Australia and on the East Coast 5 there were a number of whales that beached themselves 6 (indiscernible) was there anything done for studies there on 7 fish with air bladder and the effects on seismic? 8 DR. PAYNE: No, not really. I'm familiar with 9 the studies on the herring, you know, the Australian 10 (indiscernible) pretty close. The best study basically we 11 would like to see it repeated, but (indiscernible) study since 12 that showing, okay, the reasons why they come out showing you 13 can get -- you wouldn't promote decimation, but you can have 14 very serious ablation of the ear, say, and they did a -- you 15 know, and that was seismic, whatever and (indiscernible) effect 16 of (indiscernible) end of fish. But certainly is a -- you 17 know, it's still informed. 18 The thing that we looked at in the lobster, a 19 comparable thing, say the sensation was established as to our 20 crab. You'd turn over a loss of equilibrium. And 21 (indiscernible) of (indiscernible) study, but we looked at the 22 (indiscernible) behavior to see if they could fit 23 (indiscernible) whatever. And we found no evidence there. But 24 are still -- you know, still questions to me in terms of the 25 sub-lethal effects, okay, that needs to be looked at a little 49 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 bit more intensely. And I certainly agree that because a lot 2 work done on marine mammals and again, marine mammals are an 3 old area that we don't spend two days on next week besides fish 4 and shellfish, but there is some information with sonar, 5 specifically with sonar in terms of marine mammals. 6 UNIDENTIFIED VOICE: (Indiscernible) protective 7 resources. And just a couple follow-ups. And question one is 8 it's really important when -- for folks to understand that when 9 you're looking at studies of fish or other critters that have 10 been studied in other locations, that those results may or may 11 be informative to understand (indiscernible) in a given 12 location to the species that you're interested in. So when 13 there is seismic survey in a given area how (indiscernible) and 14 site specific, is also dependent on what the source actually 15 was. And seismic sources while they have characteristics in 16 common and also have differences in terms of the way a survey 17 is done in terms of the actual air gun, the amount of total 18 energy that is released and that sort of thing impacts what 19 happens to the noise as well as the characteristics of the 20 environment. The point is that the effects are going to be 21 very site specific. They're going to be very dependent upon 22 the exact (indiscernible) and on the species. 23 With respect to fish it's been shown that, you know, 24 first of all, just one kind of qualitative statement, our 25 knowledge of (indiscernible) fish are really in infancy. And 50 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 what we do know that there's (indiscernible) and that different 2 types of fish are probably more or less vulnerable to seismic 3 surveys. Some fish are hearing specialists, some depend on 4 hearing more, some don't. And that matters a lot, for example. 5 That's just kind of a general point is that, you know, look 6 very carefully at studies that have been done, (indiscernible) 7 places, they may or may not be informative to what we would 8 expect here in the North Aleutian Basin on the species that 9 concern you as fishermen, pollack or cod fish or salmon or Atka 10 mackerels, all (indiscernible) so that's one thing. 11 And then I was just curious (indiscernible) looked at 12 stress hormones and there is some emerging literature related 13 with respect to noise on fish and other critters and concerns 14 about elevated stress hormones which is related to disease. 15 Thanks. 16 DR. PAYNE: Okay. We've looked at hormonal 17 thing, and I certainly agree with you in terms of the -- and as 18 the gentleman just mentioned (indiscernible) cod fish doesn't 19 hear very well, but a capeline or herring does. So basically 20 in a hearing specialist with hearing sensitivity, some can be 21 extremely sensitive while others are not. And I certinaly 22 agree with the -- but one of the things that we wanted to look 23 at (indiscernible) but also a 3D survey (indiscernible). And 24 we know in the lab that you can just disturb fish, okay, and 25 you get cortisol coming up in codfish and you get deformed 51 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 larva, okay. Could be while developing eggs is much more 2 critical in spawning cause in the lab if you disturb the fish 3 chronically the cortisol will go up over a period of weeks and 4 basically you get deformed larva for three or four weeks or 5 whatever, you're chronically stimulating adrenalin cortisol, 6 you could get that. That's one of the experiments that we 7 would like to see in terms of chronic toxicity is exactly what 8 you suggest. 9 UNIDENTIFIED VOICE: (Indiscernible). I have a 10 question for Cindi. You talked for awhile about 11 (indiscernible) OBCE discharge and who determines what's 12 unreasonable. Some of the criteria seems subjective while some 13 seem objective, and who actually does the research to back up 14 unreasonableness determination..... 15 MS. GODSEY: Generally the OBCE is developed in 16 the course of drafting a permit and that OBCE would be 17 available for public comment. And EPA has a -- usually 18 contracts that work out to experts in the field that -- to do 19 that because while we have some experts in-house, if we tried 20 to get them to do all the work that we needed to do we'd have 21 them be very busy and we wouldn't have them very long. So we 22 generally have contractors develop the ODCE. We have to make 23 the -- make a determination and that determination is put out 24 for public comment. And we take comments on that during the 25 comment period on the permit. And so if there's discrepancies 52 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 or arguments to be made they can be made during that time. 2 MR. HOLT: Any other questions? Great. Well, 3 I'd like to thank our panel. 4 MR. ALLEE: We'll take a break..... 5 (Off record) 6 (On record) 7 MR. ALLEE: This is going to be a very 8 interesting panel, I think. You're going to enjoy it and I'd 9 like to introduce the moderator of the panel Stephanie Madsen. 10 She has a very strong background in fisheries. She's a leader 11 in this state. She was the past chair person of the North 12 Pacific Fishery Management Council. She's the executive 13 director of the At-sea Processors. She's done a number of 14 things in Alaska and she's a real friend of fisheries and I'd 15 like to introduce her now. Stephanie. 16 MS. MADSEN: Well, good morning. It's a 17 pleasure to be here today and it really is a pleasure to be 18 able to moderate this panel. I spent 18 years out in 19 Unalaska/Dutch Harbor during the time when we were building 20 that community to ensure that the economy was diversified from 21 a crab -- king crab only port to a bottom fish port so that 22 entailed a lot of work and I was on the City Council out there 23 for nine years. Lived there for 18. 24 So this was really a very important panel for me to 25 moderate because I've know most of these people for -- I hate 53 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to tell you, probably 25 years or more and they're all very 2 special people and close, very close to my heart. 3 Today's panel is North Aleutian Basin Potentially 4 Impacted Communities, Opportunities and Concerns. The topics 5 that our panel is going to talk about this morning are jobs, 6 economic development, maintaining culture, transportation, 7 shipping, ports, safety, Regional Citizens Advisory Council, 8 how do you balance the value of fisheries resources with oil 9 and gas development. 10 As you know when you are a community leader you have a 11 diverse responsibility to ensure the sustainability and the 12 future of your community and so these decisions are very, very 13 difficult, but we've got qualified people up here that will 14 give you their perspectives. 15 Now, as a moderator you have to introduce your 16 panelists and my threat was I've known you all for a long time. 17 You can either give me your two sentences or I'll make them up, 18 so some of them provided me some written comments and some of 19 them didn't so you'll have to decide which one I made up and 20 which one was provided. 21 Our first panelist is Shirley Marquardt. She's the 22 Mayor of my old hometown the City of Unalaska. Shirley is a 28 23 year member of the Unalaska/Dutch Harbor community. Lives in 24 the only log house in the Aleutians with a husband and two 25 children and a somewhat neurotic dog. She served as a city 54 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 council member or mayor for the past 13 years. 2 She's pitched crab in shore plants, sailed on the old 3 floating processors, cook on 130 foot trawler and commercially 4 fished the local waters around Unalaska Island for halibut and 5 bairdi crab. Aleutians is a place that she loves and not a 6 better place to raise her family. So, please, a warm welcome 7 for Mayor Marquardt. 8 MAYOR MARQUARDT: Thank you. Thank you for the 9 opportunity to be a part of this ongoing discussion. It seems 10 like it's starting early, but when I start to look at the 11 process, of how many years the process is going to take and how 12 many different steps along the way, I think it's really 13 critical that agencies, communities and individuals are 14 involved in this every step of the way so whatever final 15 product may or may not be, and we're all stakeholders, we all 16 need to have a stake in making it the best it can possibly be. 17 Dutch Harbor, the port of Dutch Harbor and the City of 18 Unalaska is truly geographically blessed. We're the only deep 19 water, ice free port on the Great Circle Route and because of 20 all the infrastructure that was left by the military when they 21 pulled out in the late '40s we had a really good starting base 22 to start building the small community. Start building a 23 support system that would almost 70 years later become the 24 number one fishing port in the United States. Number one in 25 landings. Number two in value. 55 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 It's my first Power point. Our community is a really 2 interesting mix of old and new, or large scale industrial, 3 fishing industry, small business, multi-units housing, and 4 single family units. We're extremely diverse in both in our 5 cultures, in our interests, and in what we do for a living. 6 But there's about 4,000 of us who all live together in this 7 community and we're sometimes a bit of a dysfunctional family, 8 but who isn't, but there's not a whole lot of squabbling. 9 We've got life pretty good in Unalaska. 10 This is a good view of the industrial side of Unalaska. 11 The Uni-Sea (ph) Complex. And over on the far end Valley Huge 12 (ph) Mountain where at the base of that is our 3,900 foot 13 runway and this was all new in the last 20 years. When I first 14 came to Unalaska it was very small town. About 400 people and 15 very limited infrastructure. 16 And then came groundfish and millions and millions of 17 dollars of infrastructure was built in the next 20 years to 18 support the fishing industry and came in and provide us with 19 jobs, with fish tax revenues that literally built that 20 community from the bottom up. 21 Our port welcomes most of the Bering Sea fleet almost 22 12 months out of the year and we support them year around with 23 our docks, our roads, our water system, landfill, 24 transportation companies, businesses, taxis, restaurant, supply 25 stores. And they support us with fish tax dollars primarily 56 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 paid directly to the state and then shared back to the city. 2 But the City of Unalaska also has its own three percent 3 raw fish tax, three percent sales tax and 11.78 mill property 4 tax which the bulk of that property tax is paid by the shore 5 plants in our area. 6 But when it comes to revenues from just fish taxes 7 alone paid from the fleet that comes to our community to use 8 our services, it's anywhere from eight to $10 million a year 9 that comes directly back to Unalaska. And we generally turn 10 around and put it directly right back into the infrastructure 11 that's needed to support them. 12 We have quite a few major fisheries that these are just 13 opening dates in Unalaska and Dutch Harbor so there's always 14 opening at the same time something else is closing and it might 15 simply be just gear change. It might be the same species, but 16 now different vessels, different size where they go from pot 17 gear to trawl so something is always going on in Unalaska. 18 Kind of gets queit in May and November and that's about it. 19 We have a new project that's coming into town that's 20 three-quarters of the way finished at this point, at least the 21 dock project. A company called American Seafoods decided in 22 order for them to better compete on the worldwide market 23 against Russia and Chinese fish and their products. They 24 really needed a cold storage unit that would enable them to 25 store their product so that they could ship out entire orders 57 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 whether to Asia, to Europe, to Malaysia and making their 2 customers a whole lot happier and treating the product better 3 as well, so it was a better looking product. 4 So they are expanding. By the time they're done it's 5 going to be about $130 million that they and some Danish 6 investors have invested in our community, in our infrastructure 7 and I think it's going to truly benefit the entire region not 8 just the pollack fishery. It's a 3,500 square foot, two story, 9 state of the art cold storage and 1,000 feet of filled dock 10 space which we really need in our community. 11 It's really hard to visualize just how big this project 12 really is, but when you can stand on one end of the dock and 13 literally you cannot see the other end of the dock. It's a big 14 dock. 15 Just some numbers. Over 300 million metric tons of 16 cargo passes through our ports on the way to -- whether it's 17 China, Malaysia, South Korea, Israel, United Kingdom, Asia. We 18 are constantly a community that's in motion and that's a good 19 thing. Industry is a good thing, but it does come at a price 20 and the communities always have to bear that in mind when 21 you're looking forward. 22 When you're doing your long range planning you have got 23 to take into consideration that at some point your revenues 24 will stop spiking. They will stop coming in real high. When 25 something is just being started or built and if things quiet 58 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 down to a dull roar you better not have created an operating 2 budget that keeps numbers up at the high peaks. 3 And, unfortunately, that's somewhat what Unalaska has 4 done. Our revenues rise at about one percent a year, but our 5 operation costs to keep up with the infrastructure needed for 6 industry rises at almost seven. 7 Capital projects in the next five to 10 years for the 8 City of Unalaska if we do a geothermal project as well, is well 9 over $250 million. And these are all infrastructure needs to 10 support the industry that supports us. 11 As most people in this community know if they're a 12 Municipality finding funding for capital projects is a real 13 challenge with both state and federal money especially at this 14 point, but we've got all of these issues before us right now 15 that we simply have to have in order to keep our industry 16 healthy and keep our communities secure. These are just some 17 of the issues that come along with wonderful growth and job 18 opportunities. 19 The old bridge to the other side, it's a great name, 20 but it just says it all and the new bridge which the state 21 built after about five years and it went from an $8 million 22 project in five years to a $29 million project. 23 This is just a possibility we're looking at. We know 24 we have a geothermal resource up on a bench about 1,200 feet up 25 on Makushin, an active volcano. There have been test drills 59 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 since 1982. However, the challenges of constructing up on that 2 bench and actually operating are probably -- take this project 3 out of the realm of reality. 4 So we're actually going to be looking down at the floor 5 of the valley to see where that resource is and possibly -- 6 then possibly it becomes reality and we would be piping over -- 7 or we would be producing power on that site with an underground 8 cable for four miles across the water to our power house and be 9 providing the city its base load of about 10 megawatts in order 10 to help the producers of one of the most sustainable and 11 environmentally friendly fisheries in the world, the pollack 12 fishery. And we think that's a really great partnership so 13 we're very hopeful with this project. 14 New landfill cells. We're in the process of starting 15 design for a new landfill for the next 40 years. Our landfill 16 filled up eight years ahead of schedule simply because of the 17 strength of the fisheries that come to our community and that 18 utilize our community, so, again, it's wonderful. There's this 19 tremendously significant, positive, financial effect from 20 industry coming into your community, but it does come with a 21 price. 22 We definitely have our challenges. Being as close as 23 we are to the Great Circle Route we are a potential port of 24 refuge and there is supposed to be several such places along 25 the Aleutian Chain, but really when it comes down to it Dutch 60 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Harbor really is the potential port of refuge for any vessel. 2 And when this started we had been told a day earlier 3 that under no circumstances the Cougar-Ace (ph) would be 4 brought right into our city waters literally right in our back 5 yard with it still on its side 'cause we were concerned about 6 items in the ballast water, about fuel spills, et cetera. And 7 I think it was about an hour later after I got that phone call 8 I was driving down the road and this huge thing was just 9 sailing past the end of the runway, but she was righted without 10 any problem. It took about a week and half to very slowly 11 bring her up and off she sailed. 12 We weren't so lucky other times. This is just a brief 13 map of spills. Most of them are actually fishing vessels, 14 small fishing vessels that ground, but we do have quite some 15 large ones up on the far west end up there by Attu, big 16 trampers and freighters that lost anywhere from two to 300,000 17 gallons of number 3. 18 And then we had the Selendang Ayu, of course, and the 19 Karoshma (ph) right in our back yard, but we're also -- the 20 whole Aleutian Chain and Unalaska Island is the wildlife refuge 21 so we've got some real environmental challenges that go along 22 with having a great economy. 23 The Selendang Ayu, she broke in two and they think lost 24 around 350,000 gallons. It was a two year clean-up. The cost 25 was well over $100 million and closed a local bairdi fishery, 61 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 bairdi and tanner crab fishery for two winters. And the worst 2 thing about this to me is that six lives were lost. 3 Some good things. Our clinic paid for by fisheries 4 money. The shore plants and the fishing companies and boats. 5 They kicked in the money and help build this clinic over 20 6 years ago and they continue to strongly support it. 7 The Grand Aleutian Hotel, very strongly supported by 8 fishery dollars and it also gives the community a really nice 9 place to go for weddings, for parties, receptions, get 10 togethers. It's a beautiful place. 11 Quality of life issues like our Museum of the Aleutians 12 would not have been built without fisheries money. Our library 13 with its computer access is very heavily used by our fishing 14 fleet and fishermen and visitors to the community, as well as 15 our school kids. 16 A community park where we can play softball and cook 17 hot dogs. The whole community comes down and enjoys, fisheries 18 money. Our parks, culture and recreation building where you 19 can play racket ball, spin clay on a wheel, take a Tybo class 20 or yoga. Your kids can go play basketball. There's after 21 school classes, fisheries money. 22 Our pool at the school which we just actually 23 refurbished and put in a big slide, that was actually what the 24 adults wanted. 25 Parks, our old high school which houses the pool and 62 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 our new elementary school which is five years old we bonded, 2 fisheries money. 3 One thing about Alaskans and particularly Unalaskans, 4 we love our island and we will fiercely protect it, but we've 5 already learned to deal with industry and we do understand that 6 there is a way for responsible business and environmental 7 standards to move forward together because we're living it and 8 do see it. And the fishing industry has been very responsive 9 to our concerns and to our needs and they work well with the 10 city and its community because I'll tell you, nobody wants to 11 see oil again in Unalaska on our beaches and on the rocks. 12 Having said that I guess I'm done, but again, I just 13 want to say that economic growth has been phenomenal for our 14 community. It has raised the quality of life there where 15 people come out, they want to live in Unalaska. Our young kids 16 when they go from school they come back, they want to stay. 17 It does come with a price, though, and when you're -- 18 if you're looking at a short-term vision of planning for short- 19 term possibilities you definitely are opening yourself up to a 20 significant, long-term financial risk. 21 And our greatest concern at this point is how on earth 22 are we going to plan years in advance for something that may or 23 may not happen knowing that if we're going to get wheels 24 turning for projects for roads, for dock improvements to help 25 support an industry that may be coming in our direction we've 63 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 got to start now. 2 And we could be to a point where it's spending time and 3 money on it and as you know politics can change in D.C. or in 4 Juneau or in a court and with the stroke of a pen it's done. 5 So it's going to be a real challenge, but we're looking forward 6 to it and we're also looking forward to working with our 7 neighbors along the Chain as we go forward. So, thank you very 8 much. 9 MS. MADSEN: Thank you, Mayor Marquardt. We'll 10 have plenty of time for questions the way that they've laid it 11 out so write them down 'cause we have a few more speakers. 12 And our next speaker is another very close personal 13 friend that I've known for a very long time, Justine Gundersen. 14 Justine is from Nelson Lagoon. Justine is a strong and 15 passionate advocate not only for her community, but for her 16 region. 17 Justine currently has served many years on the Assembly 18 for the Aleutian Seas Borough, as well as sitting on the Board 19 of Directors of her community development organization 20 Aleutians Pribilof Island Community Development Association, 21 APICDA. 22 Again, she is a passionate, very strong advocate and 23 I'm looking forward to her message to us today. I had the 24 pleasure of serving with Justine on the Advisory Panel to the 25 North Pacific Management Council for several years and I'm sure 64 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 you'll find her insight valuable, so a warm welcome for Justine 2 Gundersen. 3 MS. GUNDERSEN: Good morning. I'm here to talk 4 about concerns and opportunities. I live in a small village 5 and there is oil development right in our back yard. Our 6 community has made a lot of discussions concerning development 7 and they voice their concerns which I'm going to go through 8 first. 9 Of course our whole -- we've established the fact that 10 we all are concern about oil spills. Not only would it 11 devastate the commercial fishery, it would devastate our 12 subsistence life style. It would devastate our migratory bird 13 population. Our hunting. We hunt for geese, ducks. We put 14 salmon away for winter. It would devastate the culture. 15 Another concern that they have is they're not able 16 anymore economically to live on commercial salmon fishing. 17 Years ago we had prices over $3 a pound. Today -- and the oil 18 or the fuel for you boat was quite low or reasonable. Today 19 it's we get 55 to 65 cents a pound for salmon, for reds, 25 20 cents a pound for kings and maybe five cents a point for chums. 21 Our fuel prices are over $4. 22 If you live in the community and you have to buy 23 heating fuel it's over $4 a gallon. Our electricity for our 24 utility is 52 cents per kilowatt hour. It's hard to make -- 25 you can't live in the winter any more as you used to be able to 65 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 on your income from salmon. People do not want to leave their 2 communities. They want to survive and stay there. 3 Their concern also is about the children, the 4 generation that's coming up. They don't really want to get 5 into the commercial fisheries because it's not profitable. 6 They want diversification. 7 We have sat at the table with oil and gas industry not 8 just yesterday, but for a very long time. The Shetland Island 9 people came over oh, gosh, in the '80s when we were talking 10 about -- or at that time was being talked about oil development 11 and that's one reason why we formed the borough to have -- to 12 start a progress. To have things in place to talk about it, to 13 sit at the table, to be there. 14 In the '80s it was -- we were against oil development 15 that was a long time ago. Things changed. Things always 16 change as our -- that's our life, it's changed and our life is 17 also atrisk. We came back to the table and sat down with oil 18 and gas development again (ph). We've had conferences. We 19 have mitigation measures. The borough has had -- put that in 20 place for our protection. So if we gear up before anything 21 happens, if it happens, it may not happen, we are prepared. 22 We're prepared for the risk. We're prepared for a future. No 23 one stands still. 24 Some of the opportunities that are in place or could be 25 in place or the possibilities is that our children have the 66 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 diversification. They can be educated. We see two wonderful 2 young ladies from Norway, that's our future to get into another 3 industry beside fishing. 4 Our infrastructure could be developed. I'll tell you 5 about our transportation. Seven or eight years ago we had 6 Reeve Aleutian Electras coming down to Cold Bay and then they 7 folded and then we had Peninsula Air come in with their Metros. 8 A little two -- I'm sure everybody knows Metros without a 9 bathroom mind you. And our support system from Cold Bay for 10 our small communities False Pass, King Cove, Nelson Lagoon were 11 Navajos and Cherokees. 12 Well, in someone's infinite wisdom, they took away the 13 Navajo and there was a little charter service that we had 14 that's probably folding just because of the oil prices called 15 Kenai Float Plane Service and they have an Aztec besides single 16 engine airplanes. Anyway Pen Air took away the Navajo to 17 service our communities and now we have Cherokees. We have two 18 Cherokees in Cold Bay. You have a population in King Cove of 19 four, five, 600 people and you've got a Cherokee, it just 20 doesn't make it. 21 We've diminished in our transportation as far as 22 developing it. We should have developed, maybe, Cold Bay as a 23 port, that couldn't happen. Our revenues have gone down. 24 With the advent, if it happens, with oil and gas 25 development we would have, perhaps, revenue sharing. Nelson 67 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Lagoon, Cold Bay, Sand Point, our all communities would be 2 support systems for the development for the oil rigs. We have 3 people there that can do -- are entrepreneurs. It could be 4 diversification. And, again, people don't want to leave. 5 People want to develop. 6 And very good points were made about Unalaska. You 7 know, there's the risk of development, but I think we can do it 8 hand in hand. We can do it with our mitigation measures. We 9 can do it by sitting at the table, by having forums like this 10 that are so important because we're learning from them. We are 11 actually trying to have solutions before we have the problems 12 and that's where we should be going. 13 We do support this development. I know there's a 14 downside to everything. There's always a risk, but you can't 15 stand still. That's what I have to say, thank you very much. 16 MS. MADSEN: Our next speaker Alice Rudy wasn't 17 able to attend, but she was kind enough to send a replacement, 18 Tim Sams. Tim Sams is an eight year resident of Dillingham, 19 has served on the Dillingham City Council for the last year and 20 a half. He does work for Fish & Game, but today he is here as 21 a City Council member, so please welcome Tim Sams. 22 MR. SAMS: Good morning. Yeah, last week Alice 23 called me up and said Tim, what are you doing next week, so now 24 I'm here. This is her Power point presentation that she put 25 together. It's mostly just an introduction to Dillingham. I'm 68 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 not sure how many of the points that Stephanie talked about 2 earlier on that hit, but we can always ask questions later, I 3 guess. 4 So Dillingham is a relatively small community. Only 5 2,400 people or so, but we do all our own -- we're a first 6 class city so we're responsinble for our own school district 7 and all our own taxes and everything like that. There's a lot 8 of cities bigger than Dillingham that aren't first class 9 cities. 10 We are the economic (indiscernible) for western Bristol 11 Bay. We have a hospital and many of the regional centers for 12 BBC, BBHA and Fish & Game, Fish & Wildlife Service in 13 Dillingham. 14 Commercial fishing obviously is our main industry. I 15 am the manager for the west side of Bristol Bay commercial 16 fishery, salmon and herring and there really a big part of our 17 industry, but we don't have a lot of fish taxes because a lot 18 of the processing is done offshore on floaters. Also many of 19 the residents, indlucing myself, subsist on fish and wildlife 20 and that's a very big part of the economy just from the cost of 21 food and everything in Dillingham. 22 So it's a traditionally Yup'ik Eskimo village. There's 23 some Russian influence and, of course, we're diversifying over 24 time. In addition to commercial fishing there is sport 25 fishing. Again, we're a hub, a jump off point to several of 69 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the refuges in the area. The Tikchik State Park is the largest 2 state park in the United States and the Nushagak River has one 3 of the best king runs in the world. 4 Our position on oil and gas development is -- I guess 5 it was supposed to be resolutionary (ph). In 2003 the City 6 Council did pass a resolution supporting onshore oil and gas 7 development, but obviously there's a lot of trepidation about 8 offshore development. The issue being would be get some added 9 economic benefit, but what's the risk as far as our current 10 economy of subsistence and commercial fishing. 11 One of the knocks on Dillingham has been well, 12 Dillingham is opposed to everything, but as many of you know 13 the talk of the Pebble Mine development which is anothr issue 14 in Dillingham right now and the City Council has come out 15 opposed to that, but there are some things that we're in favor 16 of. Commercial salmon fishing. And this is the whole list 17 here and more so we're not against everything, but we're -- 18 like I said, there's a lot of trepidation about some things. 19 We do want to be part of the conversation, that's why I 20 came even though it was short notice and Mayor Ruby couldn't 21 make it. We felt it was important that somebody from 22 Dillingham show up and be seen and be heard so we can be part 23 of the conversation in the future. And that's all I have. 24 MS. MADSEN: Thank you, Tim, and it is 25 difficult when you get short notice on that so we appreciate 70 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the presentation. 2 Our next speaker is Dan O'Hara the Mayor of Bristol Bay 3 Borough. Dan was born in Lake Iliamna, one of the largest 4 fresh water lakes in North America. He's married with five 5 children and grandchildren and two great-grandchildren. He's a 6 commercial fisherman, commercial pilot and a marine surveyor. 7 He has lived in Naknek since 1969. So, please, help welcome 8 Mayor O'Hara. 9 MAYOR O'HARA: Well, you can tell she didn't 10 write my introduction 'cause I've got two great grand kids. 11 And if you could turn the lights back up, please. 12 It is really nice to be here today and I'm privileged 13 to be able to speak to this body and also humble to think that 14 I could be on this panel with this group of people here and the 15 Mayors and Council members are the people who are very close to 16 what happens in our region and we probably have a very close 17 pulse with what goes on and the needs that we have in our 18 communities as well. 19 Well, in the way of good news gold hit $1,000 an ounce 20 the other day. A barrel of oil is $116 a barrel looking 21 forward to $200, that should be fun. The dollar has declined, 22 probably the weakest in all of the economy, world economy. And 23 the Japanese yen is certainly doing well. 24 We should have bought Canada when we had a chance, but 25 I guess it's too late now because we're only 50 cents on a 71 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 dollar with those guys. And the Euro, whoever thought that 2 we'd be looking, you know, up front to the Euro, but it's the 3 reality and so we find that we're in a very, very interesting 4 situation. 5 The headlines the other day in the paper the other day 6 said 900,000 homes are being repossessed in American, and so 7 I'm glad that Alaska's economy actually is much better and 8 we're doing much better in Alaska. 9 Now, I'm sure we could get very divisive here today if 10 we wanted to, but we're not going to, but at least we have 11 something to fight over still and that's a good thing. We're 12 the richest state in the Union. Some of the people holding the 13 money are tighter than two coats of paint, but we'll see if we 14 can pry their fingers loose on some of that stuff. That's the 15 bad news. I couldn't find a big enough building to jump out of 16 this morning so I guess I had to come talk to you. 17 Now, I heard an interesting word picture the other day 18 that, kind of, illustrates what this leadership group here is 19 talking about. I'll borrow the illustration because it's not 20 only bad news, but we're hoping by the time we're done with 21 this conference and it'll go on for the next few years there 22 will be some really good news. 23 And that is, one day a man bought a Rolls Royce and he 24 drove it and as time went on he began having some maintenance 25 problems so he contacted the dealer and said he needed a 72 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 maintenance man to come, so they put him on a plane and flew 2 the maintenance man over there. And the maintenance man fixed 3 the rig and went home. 4 And the car owner waited a long time for a bill and he 5 never did get a bill so he went to the company and said I 6 requested some maintenance and I would certainly like to pay my 7 part of the maintenance fee on this vehicle. And a little note 8 in the mail came back saying I'm sorry, but we don't remember 9 ever doing maintenance on a Rolls Royce. Isn't that something, 10 that's quality, isn't it. That's right. And quality sells 11 itself. 12 Right now we're lacking quality in the Bristol Bay 13 Region. And I'm from the Bristol Bay Borough. The first 14 borough in the state of Alaska and the sockeye capital of the 15 world, by the way. And we beat Dillingham at basketball, too. 16 And we're going to try to keep doing that, too. 17 But anyway, the economy in the villages is really 18 interesting. Let me just illustrate this a little bit by a 19 couple of things that happened as we go along in our life. 20 I fly for Pen Air, one of their Cherokee pilots, by the 21 way and my job with Pen Air is I'm a contract pilot flying the 22 educational department around and that's fine. And every year 23 we're called in to do reoccurring (ph) ground training. And 24 we're sitting there one day and the instructor and a bunch of 25 us pilots, and he's a pilot as well, we went over and had some 73 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 lunch and he casually says Dan, he says, what is your opinion 2 on the Pebble Mine? The funny thing is when they ask you that 3 question they never give you a chance to answer. They give you 4 the answer right away and he started giving me the answer so 5 why ask the question. 6 So he said, he gave his spiel and he said I really am 7 against the Pebble Mine. I said, Kelly, you have a recreation 8 vessel in your household? And he said, oh, yeah, I've got a 9 len (ph) skiff and an outboard motor and everything. I said do 10 you have a four wheeler in your home? Oh, yeah, I've got two 11 of those. One for my wife. One for me. Kids and everybody 12 rides it. 13 And I said you go on vacation? Oh, yeah, yeah, I go on 14 vacation every month, 90 percent off on all the majors. That's 15 good Kelly, you're doing good. You must make about 125 to 16 $130,000 a year and you're home every night and Kelly, you can 17 be against anything you want, you know. 18 Now, let's just follow that up with another part of the 19 economy that Glen and Stan and I deal with every day. I walk 20 into a home in a village, husband and wife young, five 21 children. I think maybe the oldest one is 14. The littlest 22 one is about three. Very fine family. Very meager income. 23 You walk in the counter is plywood. The table is made out of 24 plywood and 2 by 4. The floor is plywood. None of it is 25 painted and one couch sitting there and no TV. 74 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Well, one day he was offered a job and so he goes to 2 this prospective mine and he starts working. And it isn't but 3 a few months and he is actually one of the top guys in the 4 drilling rig. And I came back to this house a year later and 5 guess what happened? He had a counter top. He actually 6 remodeled the table. He put linoleum, not rugs on the floor 7 and they had a TV sitting in the corner. And, you know, this 8 is quite a change, isn't it, in just a year's time with 9 employment. 10 But we have, I believe, at Lake and Penn our nearest 11 neighbor borough has about 15 schools, something like that and 12 there's a good possibility that maybe at least one, two or 13 three schools next year because people are leaving the 14 community. 15 Egegik pays 73 cents a kilowatt hour just like 16 Anchorage. Can you imagine the hue and cry in Anchorage if 17 your heating bill went up. You'd be whining all the way to San 18 Francisco if that happened in this town, but it happens in 19 Egegik and there's about five jobs. That's a pretty bleak 20 situation. They have seven children right now in school and 21 that's the way it is. 22 Well, as we go on in this situation we find that it's 23 pretty interesting everywhere as we go, but if something does 24 happen in the way of energy and maybe some jobs coming in those 25 villages are going to keep drying up and there isn't anything 75 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 wrong with moving from the village to Anchorage, but it really 2 is difficult to move here if you're forced to come here because 3 of the economy and that is exactly what we're faced with every 4 day in our villages. And it costs $1,000 to go from Lagoon to 5 Anchorage and back and that's just going and coming, $1,000. 6 You don't come to Anchorage very often with that kind of an 7 economy, that kind of cost and it's not getting any better. 8 So we find that one of the things that we have done and 9 I'm sure the next two speakers may elaborate on a little bit 10 more, but we decided to co-op with the Aleutians East Borough 11 and the Lake and Penn Borough and the Bristol Bay Borough and 12 we're working on taking economic steps to better our region. 13 And, perhaps, maybe just a little comment here this 14 afternoon would be good on the Naknek, Bristol Bay Borough. We 15 have an 8,500 foot runway with all the approach systems that 16 Los Angeles has. In fact, in another couple of years you will 17 never see an ILS approach, it will all be GPS. They're finally 18 catching up with the fishing industry aviation. Strange, 19 strange bunch of people. 20 And the second thing, I think, is pretty good about the 21 Borough you can get into King Salmon every day. Maybe half a 22 day, maybe one day out of the year you can't get in there. 23 And then we have a dock that never goes dry. And 85 24 percent of everything including areas of Moller fish coming up 25 to the Bristol Bay Borough and Nelson Lagoon bringing your fish 76 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 up, thank you and comes across our dock. 2 One year Dillingham had a 15 million harvest of fish 3 and almost 90 percent of all that fish came to the Bristol Bay 4 Borough and came across the Bristol Bay Borough dock. So we 5 have a dock in Bristol Bay that we're adding an additional 200 6 feet to it and we'll have a total of 400 feet. And once we get 7 that new dock put in and it never goes dry, by the way, and 8 that's what makes it such a great factor. 9 Northland can come all the way in to Bristol Bay, drop 10 off all its containers and going into Bethel we off load 'em, 11 they go back down to Unalaska and do whatever they have to do 12 in Unalaska, come back up pick up those containers and charge 13 'em again, go across the dock, take 'em to Bethel, wherever 14 they've got to go, but it's a huge economic factor in the 15 Bristol Bay area. That dock is very, very important. Once the 16 200 foot one is completed then we'll go back and remodel the 17 other 200 feet that we built about 30 years ago so that dock is 18 a very, very important part. 19 Now, should OCS ever come to Bristol Bay we have a good 20 school. We have an excellent school. We are -- we work on 21 math and science type studies in our school and that is fine. 22 I like that, that we are the first borough in the state of 23 Alaska for the express purpose of education. 24 Now, another thing is we have good churches, too. And 25 if the offshore development does take place off of Moller, 77 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 probably 35 miles or so off of there, probably families will 2 move into Naknek community and they're going to want to be 3 there next to their spouses who will be working so that's a 4 very good thing and so we have this to offer. 5 The thing that's interesting about the Bristol Bay 6 Borough and about Cold Bay and Unalaska is that Moller is where 7 the -- OCS (indiscernible) has been on there all -- for the 8 last two days, you know where it's at and it's the same amount 9 of time to go from Moller to Cold Bay as it is to go from 10 Moller to Unalaska as it is to go from Moller to Naknek, King 11 Salmon so it's about the same. 12 And we're not saying that we have the community that 13 these people need, but we do have things in our community that 14 could be offered. You heard other presenters today talk about 15 things that they have to offer and we would support them. 16 That's right. If we don't support each other, you know, it's 17 going to be a failure. 18 Well, I guess we gave you such a bleak outlook and it 19 is very difficult. 1988 we got 2.40 a pound. In the early 20 '90s we got 40 cents a pound. Can you imagine living with that 21 kind of a decrease in your income. That's not possible, you 22 know. We're in desperate situations. 23 Now, I think, we should think in terms of some of the 24 things that might be taking place here in the near future. 25 Should the OCS thing go through probably in the next five years 78 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 there will be some opportunities to go ahead and do some work. 2 Shell Oil came to our Borough and told us the number of 3 people that they would have on their platforms that they would 4 hire, and then they proceeded to tell us the number of people 5 that they would need to do subcontracting work and those 6 numbers are huge. They are huge. 7 We have a voc-ed training center, Southwest Voc-Ed 8 Training Center in King Salmon. In fact, my son Trevor just 9 acquired over $200,000 and he is going to be training 40 people 10 out there, first of all, in scaffoling construction. The 11 second is going to be electrical. And when those people finish 12 with that training they will have a job. How often have you 13 told people to get your 40 hour haz-whopper and your CDL and 14 you stand around for six months and you don't get a job. You 15 don't have the experience. See, these things need to go on if 16 we're going to be viable out there in that economy and these 17 are the things we have to work for. 18 The mayors have their jobs cut out for them. It's 19 going to take a lot of hard work and we can do it. So should 20 the offshore thing come that will be fine. I signed a 21 resolution supporting it, by the way, so you know exactly where 22 I stand. That's right. 23 And if you wonder why you're here today a few years 24 back the late great Harvey Samuelson, and I'm on the Board of 25 Directors of Bristol Bay Native Corporation, have been for many 79 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 years, I serve on the Land Committee and Harvey was sitting 2 next to me at a board meeting and he said we need to make a 3 motion. And I said well, Harvey, what motion do you want to 4 make? And he said well, he said, I want to see offshore 5 leasing on Bristol Bay. Oh, wow, Harvey. And so he makes the 6 motion. The board passes it. 7 Our upper management gets a hold of the Governor. 8 Murkowski tells the president to take the -- off the table. He 9 came off the table. And you wouldn't be here today if it 10 wasn't for Harvey Samuelson making that motion. But you see 11 Harvey Samuelson had enough vision to understand that we 12 weren't just going to make it on fishing anymore. That is the 13 number one priority. 14 In fact, I appreciate the comments today on subsistence 15 is the number one priority, not sport recreation or commercial. 16 It is subsistence. One percent of the total run is dedicated 17 to subsistence by the State of Alaska and I'm thankful for that 18 because that is number one, that is number one. Our culture is 19 what we do, so we have some interesting times. 20 Just in closing one of the CEOs for a company of our -- 21 a company called Ekevik (ph) which is a corrosion proofing 22 company and x-ray on the Slope, very big. Owned one-third by 23 H2M Hill. She and Shell Oil and some of the other people, 24 Keith Burke (ph) of CCI came out. We had a town meeting. A 25 couple hundred people in Naknek came out and she was the last 80 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 speaker and she was very dynamic. 2 She gets up there and she says I want you people to 3 understand that we are on a fast track if OCS every does take 4 place in Bristol Bay. And she said the boat is leaving the 5 harbor and you better get on it because if you don't get on it 6 one of these days your children will ask you why didn't you get 7 on that boat so that's why we're scrambling. And we want to at 8 least be a little bit ahead should this thing every come about. 9 So thank you very much and I appreciate the opportunity 10 to talk with you today. 11 MS. MADSEN: Thank you, Mayor O'Hara. Our next 12 speaker is another long time friend of mine, Mayor Glen 13 Alsworth. Glen is a lifelong resident of Port Alsworth on Lake 14 Clark. He's a former commercial fishermen in Bristol Bay and 15 False Pass. He's another commercial pilot, registered guide, 16 air taxi owner and operator, that can't be possible. Started a 17 sport tourism operation. Subsistence harvester. He's the 18 Mayor of Lake and Penn Borough. Lives at Lake Clark with his 19 wife and four children and 17 grandchildren. 20 Please welcome Mayor Alsworth. 21 MAYOR ALSWORTH: Well, thank you very much. 22 And one of the greatest treasures that I find in Bristol Bay is 23 my 17 grand kids. You learn a lot from your kids. Somebody 24 observed wisely that this is something you learn from your 25 grand kids, it says if you laugh the world laughs with you, but 81 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 if you cry your older sibling gets a spanking. 2 It's sometimes pretty easy to find fault and point 3 blame somewhere. It's a lot easier to look outwardly than 4 inwardly. And the biggest problem with that philosophically is 5 we can't really do much about a lot of outward stuff but 6 there's a lot of inward stuff we could work on. 7 I couldn't help yesterday when I came in and they were 8 doing a raffle and I, kind of, was perking up in case I heard 9 my name to come up and receive one of these fine prizes. The 10 first -- I might have missed some of it, but the first book 11 that they gave out was a new book called a Field Guide to 12 Sharks, Skates and Rat Fish of Alaska. Well, I thought that 13 was an attorneys directory for Alaska. I wasn't sure what they 14 were doing. 15 You know, we live in a time of global change. I've had 16 the privilege of being on many different continents over the 17 last few years. I was in China recently. I go to Russia 18 pretty often. Been in South and Central America and Africa on 19 humanitarian mission work. 20 And some of the things that I do when I'm there, I love 21 the people, they're great, but I look around at the 22 infrastructure and I look around at some of the -- what appears 23 to be lack of environmental concern and I'm troubled and I'm 24 also thankful for the good old USA. And I haven't been in many 25 parts of Europe where I understand they have very great 82 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 standards and that's good. I hope some day to get to some of 2 those. 3 I was just amazed this morning as we sat here, you 4 know, a few years back we couldn't communicate village to 5 village even. A few years back. We sat here this morning and 6 visited by audio/visual conference with people halfway around 7 the world in Norway. Things have changed. And philosophically 8 my apprehensions of the uncertainties of change are greatly 9 overshadowed by the specter of state nation and no change at 10 all. 11 My mother who is originally from Pilot Point used to 12 hook up her dog team to go out, my father cut wood with a swede 13 saw by hand and that's how we got the wood and my mother hauled 14 it back to keep our house warm. I still heat with wood. I 15 hitch up about a $1,200 sled that's made from petroleum 16 products of some kind and I hitch it up to my $10,000 17 snowmobile and I grab my $300 chain saw and I put in my $7 a 18 gallon gas and I charge out into the woods to get this free 19 energy to heat my house. 20 You know what, as funny as that seems you probably 21 wouldn't see me hitching up dogs and cutting that wood down 22 with a swede saw. I'd find a better way to do it and that's 23 about progress and about change. Yeah, things have changed. 24 It's not all bad. 25 To me change signifies vibrancy and growth and 83 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 dynamics. New opportunities, life and future. State nation is 2 like the first throes of death. We look at our villages and 3 Mayor O'Hara referred to some that we're losing population out 4 of our villages because you know what, as much as I enjoy and I 5 honestly do enjoy the subsistence opportunities that we have 6 out there, they're phenomenal. 7 I enjoy that, but somehow I can't intrigue my children 8 into thinking that picking a few berries and putting up a few 9 fish and dragging wood in is going to satisfy them in their 10 creativity and their productivity for the rest of their lives. 11 And they're willing to sit there not earning anything, not 12 producing anything for this pleasure of subsistence. Somehow 13 it doesn't hold the magic that it might have held with some of 14 my ancestors. And more and more with myself now that I don't 15 really need to do it, I love to do it. 16 The opportunities for our children are going to be for 17 the future for an economy that attracts them back to that area. 18 That's the health and the hope there. 19 Fear, kind of, paralyzes us. Faith, kind of, promotes 20 growth and activity, but we need to enter into all of this 21 future with whatever development we're looking at with a great 22 deal of scientific discipline and a great deal of open 23 mindedness. 24 You know, we do have an energy crises, there's no 25 doubt. We don't really have an energy shortage. What we 84 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 really have is an idea shortage. This idea shortage often 2 leads to a closed mind and a closed mind does not promote 3 decisions that are solution oriented. You know, we cannot 4 conserve our way in the future. We cannot conserve our way to 5 prosperity. We must innovate our way into a better tomorrow. 6 Part of that process is this dialogue that is 7 continuing here and hopefully throughout all of our regions on 8 all the issues. We don't ignore the issues. We don't pretend 9 they don't exist. We want to identify them and tackle them and 10 come up with iron clad solutions that ensure that we have a 11 better tomorrow because we're working smarter because of what 12 we learn from the mistakes of the past. 13 I want to explore the possibilities to enhance the 14 opportunities for subsistence and for sport and for commercial 15 fisher people. You know, maybe the dollars to do this 16 enhancement, it may possibly come from the proper utilization 17 and development of non-renewable. We need to make our 18 renewable stronger. 19 We've been advocating for years in our region to do 20 some fisheries enhancement projects. The Fish & Game has been 21 very willing, but there's no money. Maybe there's a way. Now, 22 we're not about to trade our pristine habitat and our pure 23 waters for a development, but rather we want to ensure 24 responsible resource extraction through the scientific 25 disciplines and create more habitat productivity at the same 85 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 time. See, we believe that resource development and 2 environmental protection they just don't coexist, they should 3 compliment and enhance each other. 4 You know, one of the things that I've talked to a lot 5 of people in my region and I haven't talked to one person yet 6 that is in favor of polluted water. No one would admit it at 7 least. I've talked to all kinds of people. Everybody agrees 8 on that for sure. Now there may be some disagreement on how to 9 get to that point, but the agreement is that is paramount. 10 You know, if we are diligent to make sure that salmon 11 always win we're going to have a brighter future that comes 12 from all sides. It's a win/win. It's a net gain. We could 13 have our cake and eat it too, as it were. 14 You know, I've discovered something as I've aged a 15 little, it's a lot easier to get older than it is wiser. 16 There's no fool like an old fool is another way to say it. I 17 need to be educated. I need to have my mind engaged and I need 18 to be learning. 19 If we have a concern about our environment we need to 20 have a very clear standard regarding that concern that's 21 universally applied. I should not be allowed as a local 22 resident or a community to put anything in the waters of my 23 community and my fish habitat that anybody else is prohibited 24 from putting in there. I shouldn't be allowed if I'm serious 25 about protecting my environment. We've got to have the same 86 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 standard. 2 You know, it reminds me of this fine lady that ended up 3 at the pearly gates and as she approached the pearly gates 4 Saint Peter was there and she was just elated that she was 5 there and she said well, could I come in? And he says oh, 6 absolutely, all you have to do is spell a word. She was a 7 little apprehensive. She wasn't that great a speller and she 8 said well, what is it? He said angel. She said, a-n-g-e-l. 9 He said welcome, come on in. Man she was happy. 10 About that time Saint Peter said look, I've got to run 11 a little errand. Would you watch the gate for me and you can't 12 let anybody in unless they spell a word. That's simple enough. 13 So she's standing there. Peter is gone. Here comes this 14 figure down the road approaching. And she gets to looking and 15 by golly if it ain't her ex-husband. 16 He comes up to the gate and he says man, you're here 17 already? Yeah. He said well, I want to come in. She said, no 18 problem all you have to do is spell a word. Well, he felt 19 pretty good about that. He could always outspell her and she 20 was in. No problem. He said what's the word. She said 21 Czechoslovakia. 22 You know, there's a different standard there and we 23 can't have that. We need to have clearly defined parameters 24 for all of us to live and work by and if something is -- if we 25 are going to be responsible in our areas we need to start that 87 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 individually and it needs to apply to me and to whatever I do 2 as well. 3 If we advocate for the salmon, we can't lose. I'm 4 thoroughly convinced that if we haven't learned anything from 5 all the mistakes that we've all made in the past we don't have 6 a future. And if we decide to give up and say we can't go any 7 further thnt state nation that's the early signs of death. And 8 culturally, economically, socially our villages, our region the 9 last guy out is going to have to shut the light off and we 10 won't be there anymore. 11 Our future, our entire ability to continue our culture 12 and all that is dear to us out there is terribly integrated and 13 hooked to a vibrant, living community. And our hope is in our 14 children. What are we offering them to stay there? What are 15 we instilling in them? What are the opportunities they will 16 have? 17 In our Lake and Peninsula Borough we've chosen to be 18 proactive and engage issues. We're not going to ignore 'em. 19 We're going to look at every possibility and every scenario 20 that comes along and we're going to examine them to death. And 21 if we cannot assure that our waters will be protected and our 22 habitat will be protected we won't support that kind of 23 development to our proposal. We're not going to carte blanche, 24 throw out an idea. And we have come a long way in about 20 25 years. 88 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 I was sharing with Mayor O'Hara when Sale 92 came up. 2 It was unanimous in our board, no chance back then. You know, 3 and I say that wasn't a wrong decision for us to make back 4 then. We were 20 years more ignorant than we are today and so 5 that's good and we're at a good place today and a good 6 discussion and I'm excited to be here and I'm excited about the 7 future. 8 I've very sure that our region, our people as they are 9 informed and educated and as this dialogue continues, I've 10 never yet seen the people of the Lake and Peninsula Borough 11 make a bad decision as they know the facts and they understand 12 what's going on. I'm excited about the future. I think we 13 have a great future. You know, what if things are going to 14 change, bring it on. 15 You know, people are concerned about global warming, 16 I'm ordering some apple seeds to plant out there and I'm going 17 to eat apples. You know, I ain't going to change it so I may 18 as well learn how to maximize what's happening and go and grow. 19 I'm not going to sit around and die because things aren't like 20 they were 60, 70 years ago when my folks were first working 21 there. 22 I appreciate the opportunity to share with you today. 23 MS. MADSEN: Thank you. The next speaker is 24 Mayor Mack, Stanley Mack. He's the Mayor of the Aleutians East 25 Borough. He was born and raised in King Cove. He was one of 89 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 eighteen children. He's a commercial fisherman since he was 2 age 13. He currently lives in Sand Point and fishes salmon in 3 Port Moller and has participated in all of the other fisheries. 4 Please welcome Mayor Mack. 5 MAYOR MACK: I, too, am honored to be here 6 today to share my views on the issue that's before us. Enjoyed 7 every moment of this gathering so far. Had questions and had 8 them answered out in the hallway. 9 The question before us is how do you balance the value 10 of fishery resources with oil and gas development. I come from 11 a region with fishermen so aggressive that if you get within -- 12 it's a little different than Bristol Bay, within a quarter of a 13 mile of them they'll say pick it up, boy. I've had to do that 14 many times. My eyesight is not so good any more. 15 Glen and I share -- have a lot of things in common. He 16 has 17 grandchildren. I do, too. 17 I thoroughly enjoy doing what I'm doing, number one, 18 fishing. I've done it all my life. Participated in all the 19 fisheries and seen they come, I've seen them go. The different 20 species of fish are there early and then they disappeared and 21 then another species came in. 22 It was so great growing up in the area that we were 23 able to move from one fishery to the other. As I was able to 24 participate in all these fisheries it was just wonderful. We 25 could do that. I could get done salmon fishing. I can go 90 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 right into crab fishing. I would go shrimping or go cod 2 fishing when it finally started. 3 Just a little history on some of the fishing that went 4 on in the area. My father came to this country, came to a 5 little island called Sanak, 42 miles southeast of King Cove out 6 in the middle of the ocean. That was called Halibut Island 7 years ago. 8 The history is that it was the richest cod fish area in 9 the entire state of Alaska at the time. He got there in 1909, 10 met my mother who was an Aleut lady there on the little island 11 and never left, but in the early 1920s the cod fish 12 disappeared. They woke up one morning and they were gone. My 13 father-in-law who was 94 years old living here in Anchorage 14 today and I live with him, I'm trying to pump him as much as I 15 can to find out exactly what took place and why does this 16 happen. 17 Well, my father had to move to where there was more 18 opportunity for making a living so he moved to King Cove, one 19 of the first families to get there right after the cannery was 20 built for salmon. Processing cannery that was there in King 21 Cove was there because it tried other places to establish a 22 processing facility that did not work, so they moved into King 23 Cove, a protected harbor, deep water port and that's where I 24 was born. 25 There were 18 of us in the family. Salmon fishing was 91 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the only thing available to us at the time so when I finally 2 came on the scene and was able to participate in family 3 gatherings, we all had a job to do. We would salmon fish in 4 the summertime. Of course, I had to stay home because I was 5 too small and oh, how I wanted to get out in a boat, just 6 wanted that desperately to get out there. 7 Anyway we would salmon fish in the summer, get enough 8 money to get a grubstake and then we would salt whatever salmon 9 we could for the rest of the winter and go out and hunt 10 whatever meat we could gather. Of course, we didn't have any 11 dogs down there at the time other than one 'cause it was rather 12 expensive to keep around the house. There were retrievers 13 only. And we'd go by skiff or dory probably in the 14 neighborhood of 40 miles to get caribou and we would salt that 15 to preserve it. 16 We'd gather eggs in the spring of the year to last us 17 all year. They were sea gull eggs. We'd preserve them so that 18 we'd have enough for the next year. We lived a wonderful, 19 wonderful life. I had such a wonderful childhood. 20 We were home all the time. We only had a radio to 21 listen to the outside world. My father was able to capture 22 (ph) one. He put up a wind generator for a 12 volt battery 23 that he was able to keep that battery changed so we could 24 listen to the Armed Forces radio and we'd all sit around and 25 listen to that, listened to some of the old shows. Oh, I can 92 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 remember when the Lone Ranger came on there. Man, it was the 2 greatest thing that ever happened. 3 But, anyway, things started deteriorating in the 4 fishing industry. Well, the cod fish were never there. All 5 during my childhood we never had any cod fish and very few 6 halibut out in the area. Cod fish never showed up in the area 7 until about 1973, '74 and then they started showing. 8 And we heard testimony yesterday, comments on how great 9 the Bering Sea is in resources. Mark this day that I told you 10 this folks, that day will end here very shortly. This box (ph) 11 will disappear. The other species of fish will come back. 12 It's going in a cycle. 13 In the '70s the area around Kodiak was starting to 14 produce some cod fish and some pollack. We had not seen any of 15 that, those species of fish there. The crab was back there. 16 The king crab was great. The tanner crab was great in the 17 Pacific side. 18 We were so excited when we pulled that first cod fish 19 out of the crab pot out at Unimak Bight. It was still kicking 20 when I got it ready for cooking. Then it was three, then it 21 was four and gradually they increased, but the size was too 22 small to actually commercially use them. Today the stocks came 23 at a peak and it's starting to go down. The pollack stocks are 24 going down. The size of the pollack is down. The size of the 25 fish is getting so small that they cannot harvest them or -- 93 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 yeah, to harvest them. 2 Anyway, during this time the decline of the crab. 3 Someone mentioned there was going to be a lease sale in the 4 Bering Sea. I was working in Cold Bay in 1967 when they 5 started doing the surveys out there in the -- or they did the 6 shore explorations along the mainland toward Nelson Lagoon. 7 Cold Bay was buzzing just tremendously, just going, it was the 8 hub for activity. Then that shut down. 9 Let's see, I've got a couple of minutes to go so I 10 better speed this up. Anyway I want to say that the Saint 11 George Basin came on board. A lot of activity. In the '80s 12 that took place. I was working in Cold Bay again and watched 13 the activity go on there. Traffic, excitement, we're going to 14 have oil. Everybody was on board, then it shut down. 15 Now we're to a point where -- well, just after the 16 Saint George came aboard they started talking to us at the 17 Borough level and saying you know, there might be something 18 going on here so immediately the Aleutian East Borough, the 19 management, the administrator and the mayor, the one that was 20 there before I, went and invited the folks from the Shetland 21 Islands to come in and talk to us. The question was, what do 22 you do, how do you guys cope with fish and oil? And they 23 explained to us everything they've done in regard to protect 24 the resources of fish. 25 Today we're faced with the same situation and we've 94 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 done a lot of work in regard to finding out all that can 2 happen. A few years ago we invited -- when we heard that 3 things were starting to come alive on the Peninsula with oil 4 and gas and possibly some stuff off in the Bering Sea, it was 5 still in the forming stages, we invited everybody and anybody 6 who had experience with oil and gas exploration and development 7 from the North Slope to Prince William Sound to Cook Inlet to 8 the MMS, the State Department of Fish & Game to the U. S. Fish 9 and Wildlife and we sat down and had a summit in Cold Bay and 10 said if you had to do it all over what would you change? And 11 we've got a tremendous amount of information in regard to how 12 to protect your lifestyle, your subsistence lifestyle, your 13 culture, your economic base that you have, particularly fishing 14 and how do they cope with it. Wonderful experience. 15 Then we started to visit oil sites, the platforms and 16 find out more. How do you protect? What do you do in case of 17 an accident? We started back in the -- I think it was in the 18 '70s or '80s we started our trips to the oil rigs. 19 The last trip I made to Norway was the greatest eye 20 opener I ever had in my life to find out how these folks can 21 still coexist with oil development in their area. They were at 22 the table and put their requests before the people and said, 23 this is what we want, if you want that oil you will give us 24 this. They wanted the oil so they got it. That's where I'm 25 coming from today and I expect I'll wind this up as quick as I 95 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 can. 2 Today we're trying to train our youngsters. I have a 3 list of youngsters that are traveling to get training that are 4 going to have jobs after they're trained in King Salmon. I 5 have one from Sand Point, two from Saint Paul, one from Saint 6 George, one from Unalaska, one from Igiugig, two from 7 Dillingham, one from New Stuyahok, three from Togiak, one from 8 Perryville, one from Koliganek, one from Newhalen, one from 9 Naknek, one from -- or two from South Naknek. 10 These kids are going to get a training in King Salmon 11 and they will have jobs. The next group will come in and get 12 trained up. This is what's being offered to them so that they 13 can take part in whatever happens, if and when it happens in 14 the North Aleutian Basin. These kids are going to have the 15 chance to get on there. And, I think, we can work together 16 with the State Department of Fish & Game, but I think we have 17 the best in the world in my books that they protected our 18 salmon so well and the other resources. North Pacific 19 Management Council managing it. 20 We have to look at -- and, again, I go back to where I 21 come from, we're able to as fishermen move laterally. The 22 Federal Government has changed regulations there so we cannot 23 do that any more. We missed the anniversary years so a lot of 24 the local fishermen have lost their ability to participate in 25 federal fisheries, so that's out of the question. We have to 96 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 do something with the generation here in the community so that 2 they can at least have a lifestyle. They're not going to move. 3 They've got their roots down. 4 The price of fuel is up. The price of fish is down. 5 And the story was a few years ago the price of fish was up and 6 the price of fuel was down. Well, this year is going to be the 7 test of all tests for the fishermen, for salmon fishermen. 8 It's already effecting the federal fishery now for the amount 9 of money that they're having to pay out for operations. Fill 10 up my tank 150 gallons of fuel for 750 bucks, pretty steep. 11 Some of the folks don't have jobs having to pay that is pretty 12 hard. 13 We've put in infrastructures in our community trying to 14 beef them up to prepare for this. We're a pro-development 15 area. The Aleutians East/South (ph) Borough with the 16 aggressiveness of the folks in my area were pro-development, 17 but we're always in protective of our culture, our lifestyle 18 and our way of making a living and that's by the water and 19 we'll protect that at all costs. That's why we are so far 20 along today is what's shared with you yesterday, we put 21 together many mitigating measures and they've been honored. 22 Thank you very much. 23 MS. MADSEN: Well, I think the message that 24 you heard today is that times have changed, they continue to 25 change and we need to change as well. I'm not sure about you, 97 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 but I have full confidence in the leaders of our communities 2 that are sitting at this table that they will lead up in the 3 right direction when we have discussions like this and decide 4 how our future will look and what changes may or may not need. 5 So let's give them a great round of applause. They're hard 6 workers and filled with a lot of knowledge and we appreciate 7 your time. 8 I think we have a few minutes. We have about seven 9 minutes, I think, for questions and I think the microphone is 10 right up here if you have any for any of our panelists, so come 11 on up. Mr. Platnakoff (ph). 12 MR. PLATNAKOFF: Thank you. 13 MS. MADSEN: I can hear you, George. You just 14 bellow right out we'll get it. I'll repeat it for those of you 15 in the back if you can't. 16 MR. PLATNAKOFF: Well, it's kind of a long 17 question, but it's for the Mayor of Unalaska. Shirley, I 18 appreciated your report and as you know I lived out in Unalaska 19 for six years and just moved to town. I was born and raised in 20 the Pribilofs. Appreciated your report and all that showed us 21 that industry has done for the lifestyle of the people -- for 22 the lifestyle (indiscernible) -- for the lifestyle of the 23 people who live and work out in Unalaska. 24 Just wanted to make note that because of the kind of 25 developments that take place in a situation in Unalaska, I 98 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 think you know what I'm referring to, other peoples' lifestyles 2 may be impacted negatively. In order to put in a new bridge 3 for -- to replace your existing one, a 3,000 year old 4 (indiscernible) archeological site was dug up with a backhoe. 5 My question is how many (indiscernible) remains were removed to 6 put in that bridge using this tactic? 7 MS. MADSEN: Well, Mr. Platnakoff, I appreciate 8 that question and I'll certainly turn it over to Mayor 9 Marquardt, but I don't quite understand the connection with 10 that and the panel, so we'll turn it over to Mayor Marquardt 11 and hopefully she'll know the..... 12 MR. PLATNAKOFF: I can explain the connection. 13 MS. MADSEN: Okay. 14 MR. PLATNAKOFF: We're talking about 15 developments in the Bering Sea,..... 16 MS. MADSEN: Um-hum. (Affirmative) 17 MR. PLATNAKOFF: .....right? 18 MS. MADSEN: Um-hum. 19 MR. PLATNAKOFF: And development does impact 20 people and the environment, right? 21 MS. MADSEN: Right. 22 MR. PLATNAKOFF: So development in Unalaska 23 impacted our people, the Aleut people, this is an impact and so 24 I think it's relative to the discussion here. 25 MS. MADSEN: And you're talking about the 99 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 replacement of the current bridge? 2 MR. PLATNAKOFF: Right. 3 MS. MADSEN: Thank you. 4 MAYOR MARQUARDT: Thank you, Mr. Platnakoff. 5 Just very briefly, certainly development does cause changes in 6 communities. This situation, I think, is a little different. 7 The State came in, as you know, and said the existing bridge 8 that had been built almost 30 years ago was not engineered to 9 handle any of the loads that we've seen in the last 20 years 10 and it was sinking and unsafe. 11 So they choose to replace the bridge and also sign the 12 Memorandum of Agreement and Understanding with both the 13 Ounalashka Corporation and the Qawalingin Tribe through a one 14 on one personal process with them to work through the issues 15 with the archeological site which was a fantastic site, I agree 16 with you so the remains, I couldn't answer that question for 17 you, that is still information that's forthcoming through the 18 study and would probably be released by the Ounalashka 19 Corporation or the Qawalingin Tribe if they wish to make that 20 public. They feel fairly privately about the issue. 21 MS. MADSEN: Okay. Any other questions? 22 UNIDENTIFIED VOICE: I'll bellow 23 (indiscernible)..... 24 MS. MADSEN: Oh, yeah, you're good at that. Go 25 ahead. 100 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 UNIDENTIFIED VOICE: (Indiscernible) but anyway 2 my question would be for O'Hara (indiscernible) you mentioned 3 that you signed a resolution supporting OCS, in what capacity 4 was that as the Mayor of the Borough or Bristol Native 5 Corporation? 6 MAYOR O'HARA: No, that -- it was with the -- 7 the Assembly passed the resolution and I simply signed the 8 resolution. 9 UNIDENTIFIED VOICE: Do you know the date on 10 that? 11 MS. MADSEN: The date, do you remember the 12 date? 13 MAYOR O'HARA: Oh, maybe a year and a half ago, 14 maybe a year ago, something like that. 15 UNIDENTIFIED VOICE: Okay. 16 MAYOR O'HARA: Actually the resolution was 17 passed before I became mayor. Then they revisited it again and 18 I signed it so actually it was done before I got there. 19 MS. MADSEN: One more question? Okay. It 20 looks like we're all out of mics so that must mean it's lunch 21 time. So let's have a big round of applause for all the 22 panelists. 23 MR. ALLEE: Thanks for a good job with this 24 panel. It's time for lunch. So we'd like you to be back at 25 1:30. Lunch is on your own and look forward to a colorful and 101 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 vibrant afternoon. I think you'll enjoy it. 2 (Off record) 3 (On record) 4 MR. ALLEE: So this afternoon right after lunch 5 here we have an excellent panel laid out for you on Native 6 Culture and Subsistence Implications. And the moderator of 7 that panel is Eric Olson. And you've heard a little bit from 8 Eric previously. 9 As you probably know he is the current Chair of the 10 North Pacific Fishery Council. He's a lifelong Bristol Bay 11 commercial fisherman and he's been active in that area for a 12 long time. Worked for the Bristol Bay Economic Development 13 Corp. for 10 years. He was raised, born in Dillingham. Is a 14 Bristol Bay Native Corporation shareholder. And, again, he's 15 one of these double degree guys as he earned a BA in Management 16 and a BA in Accounting, so he's a major force that's for sure. 17 And please join me in welcoming Eric. 18 MR. OLSON: Well, thank you, Brian. Good 19 afternoon. My name is Eric Olson. As Brian mentioned I'm 20 originally from Dillingham and a graduate of Dillingham High 21 School. 22 I have to admit that I was very sheepishly smiling this 23 morning when Mayor O'Hara informed us that his Bristol Bay 24 Angels beat my much beloved Dillingham wolverines in basketball 25 this year and I wish he was in the room, but as you might have 102 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 gathered there's a bit of a rivalry between these two schools 2 that are one bay apart and separated by Etolin Point. 3 And this is a healthy rivalry along the same lines as 4 the one between the University of Alaska and University of 5 Alaska -- University of Alaska Anchorage and Fairbanks. And 6 from what I gather from the two students last night at the 7 reception from Norway the rivalry between Norway and Sweden, 8 but healthy rivalries are a good thing I think. 9 I think they make both sides strive to do better and so 10 in the spirit of healthy rivalry I wanted to put out that the 11 Dillingham Wolverines have been beating the Bristol Bay Angels 12 in wrestling the last few years and they're state champs two 13 out of the last three years, so back to business. 14 I'm here to moderate one of the last panels of this 15 workshop titled Native Culture and Subsistence Implications. 16 I've heard and used the word subsistence my whole life, but, 17 you know, I've never looked up the definition of the word 18 before this morning when I was preparing my introductory 19 comments. So from my seat over on this side of the room I used 20 the customary and traditional Eskimo tool of wireless internet 21 to pull up the Anglo definition of the word on Webster.com. 22 And Webster defines subsistence in five ways. The 23 state or fact of subsisting, the state or fact of existing, the 24 providing of sustenance or support, a means of supporting live, 25 a living or livelihood and five, the source from which food and 103 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 other items necessary to exist are obtained. And these five 2 definitions are very descriptive. 3 However, Webster had a sixth description of the word 4 that really captured the term for me and they described it a 5 philosophy in three different ways. They describe it as an 6 existence especially of an independent entity, the quality of 7 having timeless or abstract existence and the mode of existence 8 or that by which a substance is individualized. And I think 9 that, as I said, really captured the essence of the term for 10 me. 11 And just to lay the groundwork a little, I don't want 12 to take too much of the panelists time, but I wanted to give 13 you two quick examples of what the practice of subsistence 14 means to the people that I'm familiar with. One pertains to 15 berries and one pertains to salmon. 16 And the first one is a very personal example for me. 17 It involves my mother and my daughter and a trip my family took 18 back to Dillingham this last Christmas. If you can imagine a 19 family gathered in a kitchen at about 7:00 or 8:00 o'clock at 20 night on a cold, dark night in rural Alaska. And my mother 21 pulled some berries out of the refrigerator that she thawed to 22 prepare an Alaska Native delicacy called akutak or Eskimo ice 23 cream. 24 And after she mixes the sugar and Crisco enough so that 25 the sugar is dissolved into that Crisco I see great joy in her 104 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 eyes as she asks my daughter to pour the berries she harvested 2 the previous summer into that mixture. And I look over at my 3 five year old daughter learning how to prepare this traditional 4 dessert and seeing her very noticeable look of anticipation to 5 taste one of her favorite foods. How do you put a value on 6 that? That is a very tangible value. 7 The other is a very typical example of a young man who 8 harvests salmon for his family. He may fill his smoke house, 9 fill his freezer, pickle the fish, dry the fish and/or bury the 10 fish in the ground until it's fermented. These are just a few 11 methods of how salmon is preserved for winter use in rural 12 Alaska. 13 What does the ability to harvest and use that salmon 14 resource mean to him and his family? As you know the areas of 15 Western Alaska are some of the poorest regions in the state if 16 not the country. You might observe that having access to 17 subsistence resources to this hypothetical man is simply a 18 means to provide a meal to his family and it is that, but 19 further if he cannot only do that, but also provide food to his 20 family and passing on subsistence traditions to his children 21 without having to swallow his pride and go on public 22 assistance, I think that takes on a whole different context of 23 value to him and what that subsistence resource means to his 24 family. 25 So without further ado I think I'd get to introducing 105 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 our panel. We have a few game time changes to our list of 2 speakers. Sharon Svarny-Livingston couldn't be here today, but 3 Katherine McGlashan is her to take her place, but I'll 4 introduce all the speakers in the order that they'll be coming 5 up and then I'll let them go. 6 The first will be Dr. Jim Fall. He is a statewide 7 program manager for the Division of Subsistence of the Alaska 8 Department of Fish & Game stationed in Anchorage. He earned a 9 BA from the University of Pennsylvania and an MA and a Ph.D. in 10 Anthropology from the University of Wisconsin Madison. 11 Dr. Fall has conducted research on subsistence 12 activities in Alaska communities since 1981 and has authored or 13 co-authored numerous papers in the Division's Technical Paper 14 Series. 15 And the second speaker will be Tiel Smith who is 16 currently the resource manager for Bristol Bay Native 17 Corporation. He was raised by his Native father and German 18 mother in Dillingham, Alaska. Another Dillingham Wolverine. 19 He holds a Bachelor's Degree in Science Education from Utah 20 State University. 21 Mr. Smith was part of the statewide Tele-Health System 22 Support for the Alaska Native Tribal Health Consortium. He's a 23 computer -- previously a computer trainer tech deploying Tele- 24 Health Systems to the Bristol Bay Region, a science teacher in 25 rural Alaska and a lifelong commercial salmon fisherman in 106 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Bristol Bay. 2 Thirdly we have Mr. Norman Anderson who has commercial 3 fished his entire life. He is an Aleut and has been active in 4 offshore oil development issues in Bristol Bay for the last 20 5 years. He has met with tribes in Bristol Bay and has taken 6 resolutions gathered to Washington D.C. to share with our 7 delegation. 8 Mr. Anderson was one of three Native Alaskans to be 9 invited to meet privately with the Secretary of Interior 10 Kempthorne to discuss the North Aleutian Basin. He has 11 organized three annual meetings in Bristol Bay with panelists 12 from the University of Alaska, MMS, Shell and the Boroughs, 13 Native organizations and local fishermen. In Bristol Bay we 14 affectionately call him Stormen Norman. 15 And then we have Tom Tilden. Mr. Tilden is the current 16 chief of the Curyung Tribe in Dillingham. He is an active 17 commercial fisherman and subsistence users. He sits on the 18 Boards of Bristol Bay Native Association and the Alaska 19 Federation of Natives. He is a former councilman and Mayor of 20 the City of Dillingham. A father of six and grandfather to 21 eight. And I just wanted to thank Mr. Tilden to be on this 22 panel on short notice. 23 And lastly we have Katherine McGlashan. She is a 24 lifetime resident of Unalaska. She has served on the Unalaska 25 City Council for seven years. She is a single mother and a 107 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 small business owner. She presently is working hard to 2 reinstate the Qawalingin culture and language class back into 3 the Unalaska School District to preserve and educate children 4 of their indigenous culture. 5 So I'd like to ask that you welcome this panel and give 6 them a round of applause. Dr. Fall will be first. 7 DR. FALL: Well, thanks, Eric and good 8 afternoon everyone. My topic is understanding subsistence 9 fisheries in the North Aleutian Basin. And first just a little 10 something about myself. 11 I am a cultural anthropologist working for the Division 12 of Subsistence of the Alaska Department of Fish & Game. The 13 Division of Subsistence is charged under state law with 14 conducting studies on all aspects of subsistence hunting and 15 fishing in the lives of Alaskan residents. And we've had an 16 active research program in Alaska since 1980 doing primarily 17 community studies and resource monitoring projects. 18 And we've published over 300 Technical Papers and Lost 19 in Translation was an example of the cover of one of our 20 Technical Papers. And as a substitute I do have some brochures 21 which feature our Technical Papers and information about how to 22 get copies of them. 23 Within the Bristol Bay and Aleutian Islands area the 24 Division has conducted over 30 projects since 1980 mostly 25 through partnerships with tribes and regional non-profit 108 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 organizations. Our research is based on established ethical 2 principles and social science research including informed 3 consent, anonymity, coordination with communities and community 4 review of study findings. 5 We've published approximately 54 Technical Papers on 6 subsistence uses in this area and also many of our results are 7 found in our community subsistence information system data base 8 which is available on line. We also conduct annual harvest 9 monitoring programs of salmon, halibut, migratory birds, harbor 10 seals and sea lions, all with the collaboration of local 11 communities. 12 Well, the question that I was asked to address is what 13 does the oil and gas industry need to know about subsistence 14 fisheries in this area all in 10 minutes. And just in case you 15 can't read the fine print there this particular picture, I'm 16 cheating a little bit here, is from Cook Inlet and it's the 17 traditional king salmon fishery at Tyonek in North Cook Inlet 18 with a gas platform in the background. 19 One thing I just wanted to emphasize right off the bat 20 in that tracking changes to subsistence uses in any area does 21 entail tracking demographic changes in the areas, too. By my 22 count there are 43 communities in the area under discussion at 23 this conference and 22 of those 43 are communities with less 24 than 100 people and only two have populations of over 1,000. 25 The population in this area was over 16,000 in 2000 109 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 according to the Federal Census, but it dropped to about 14,600 2 in 2007. That's a decline of nine percent while Alaska grew in 3 the same period about eight percent. About two-thirds of the 4 population of this area is Alaska Native. And these are 5 statistics that with any economic change including change in 6 subsistence opportunities need to be tracked. 7 An important point that I want to make, it's the main 8 take home point in my presentation, is that subsistence 9 activities in this area take place in what we call the mixed 10 economy with a subsistence sector and a cash sector. By the 11 subsistence sector I mean hunting and fishing for food and raw 12 materials and for customary and traditional uses and gathering, 13 too. Hunting, fishing and gathering for traditional uses 14 including food, raw materials, sharing and other traditional 15 activities. 16 The subsistence sector in these communities tends to be 17 the more reliable sector year in year out. The cash sector 18 more variation over time historically. The sectors can be 19 mutually supportive and I want to demonstrate that with some of 20 the findings from the Division of Subsistence. 21 We've done numerous, systematic household surveys over 22 the years and those surveys have shown a number of things. One 23 is that virtually every household in the communities of this 24 area use subsistence resources annually. We've done at least 25 one round of systematic household surveys in all but one 110 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 community in the area under discussion. In addition, virtually 2 every household in this area engages in subsistence hunting and 3 gathering on an annual basis. 4 Subsistence harvest provide high levels for the food 5 supply of this region and this graphic -- oops sorry, need to 6 go back, okay. This graphic shows estimates of subsistence 7 harvest in pounds useable weight per person for study 8 communities where we've done systematic household surveys over 9 the years. And in virtually every community the harvest 10 exceeds over 200 pounds per person. And 200 pounds per person 11 is about what the average family in the United States purchases 12 of meat, fish and poultry for use in the home, so a very large 13 percentage of the food supply in these communities is provided 14 through subsistence activities. 15 Subsistence uses are also very diverse, this is another 16 characteristic of the subsistence sector of the economy of 17 these communities. And this graphic -- sorry, this graphic 18 shows the composition of harvest by various resource categories 19 and the Yup'ik community to Togiak, the Athabascan community of 20 Nondalton, the Alutiiq community of South Naknek and the Aleut 21 community of Akutan in different study years. And one thing 22 that this does show is the importance of marine resources or 23 resources that are produced in marine waters in all of these 24 communities. 25 This is the slide for salmon for all these communities, 111 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 but also notice in Togiak the importance of marine fish as well 2 as marine mammals and in Akutan the very large slice of the pie 3 that's marine fish, that's mostly halibut as well as marine 4 mammals, sea lions and harbor seals. 5 Another way to look at diversity is the average number 6 of resources a household uses for subsistence in any given year 7 and this is very, very wide and large in these communities. 8 Between 12 and 30 different kinds of wild foods is used on 9 average in these communities. 10 Another feature of subsistence of the subsistence 11 sector in these communities is the widespread sharing of 12 subsistence foods. And, again, based upon household surveys -- 13 sorry, virtually every household gives away resources to other 14 households in those communities. We should not underestimate 15 the significance of this exchange of resources as an economic 16 activity, as a traditional activity. And, in addition, 17 virtually every household gave away some portion of their 18 harvest to other families in their communities or in families 19 in other communities. 20 A key feature of subsistence harvest throughout Alaska 21 and the subsistence economy is harvest specialization. In the 22 Division of Subsistence we call this the 30/70 rule. And what 23 we find is that in most communities, not only in Bristol 24 Bay/Aleutian areas, but in general about 30 percent of the 25 households account for about 70 percent of the total harvest 112 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and share that harvest with others in the community. 2 And this example is Togiak in Western Bristol Bay and 3 right here is the point where 30 percent of the households 4 intersects with 70 percent of the harvest. And these highly 5 productive households tend to be the households that have cash 6 jobs, that have higher income and have more mature harvesters 7 living in them. 8 Another characteristic of the subsistence sector is 9 efficient methods both new and not so new. Harvest methods are 10 designed for maximum harvest efficiency, to minimize effort, to 11 minimize time and costs. For example, seining salmon in Six 12 Mile Lake near Nondalton. Newer methods are adapted as they 13 become available if they work better than the old methods. 14 Cash earnings are invested in equipment and supplies, too, for 15 this production, but some effective, older methods persists 16 such as this homemade halibut hook in Nikolski. 17 Another feature is a pattern seasonal round (ph) and 18 this needs to be taken into account in understanding any 19 effects of any kind of development on subsistence uses is when 20 the uses take place. 21 Another factor is traditional use areas which can be 22 mapped with the participation of local communities. Local 23 residents tend to recognize traditional fish camp locations, 24 hunting sites, trapping lines and hunting areas. The sites and 25 locations of subsistence harvest areas vary, of course, by 113 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 resources and from year to year. And a take home message here 2 is that it's important to document the areas used over long 3 periods of time to show the traditional areas used by the 4 community. A single year's data tend to be inadequate to show 5 the range of important areas that are used. 6 Subsistence uses are also very much structured by 7 kinship ties and so the social organization of harvesting and 8 processing wild foods is key to understanding subsistence in 9 these communities. This shows how various households in the 10 community of Manokotak organize themselves for subsistence 11 salmon fishing at Igushik on Nushagak Bay. And multiple 12 households work together sometimes living in one or two homes 13 at the fish camps and it was usually a senior woman who is in 14 charge of the fishing and the processing of the wild resources. 15 And this is one example of many that can be provided on this 16 particular point. 17 Traditional ecological knowledge, it's sharing as well 18 as its application is another key feature of subsistence uses 19 in this area. Traditional knowledge about fish and wildlife 20 informs decisions about harvesting and processing. Harvesting 21 and processing provide context in which traditional knowledge 22 is shared across generations and cultural values of respectful 23 treatment of fish, wildlife and plants, non-wasteful uses and 24 generosity are expressed and learned through subsistence 25 activities. 114 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 A few points on the cash sector of local, mixed 2 economies in this area. Employment tends to be seasonal. It 3 tends to be relatively low cash incomes, but relatively high 4 costs of living. There's more uncertainty from year to year on 5 sources of cash than in the subsistence sector where sources of 6 food tend to be stable over time. And in these communities, 7 which I'm sure you've heard earlier in this conference, 8 commercial fishing historically and today provides a high 9 percentage of cash income and employment in most of the 10 communities and these earnings are often invested back into the 11 subsistence sector of the economy. 12 And I think in the interest of time I'll just mention 13 that our studies that the Division of Subsistence does we 14 usually do ask about the cash sector. We ask people about 15 jobs. We can document that in most communities most people do 16 not work year around except for maybe in some of the larger, 17 regional centers. This shows the proportion of people who had 18 jobs who work year round and in most communities it was under 19 30 percent. And cash incomes in these communities tend to be 20 lower than the state average. This is federal census 21 information from 1999. 22 I want to mention a couple of myths that you'll often 23 hear about subsistence uses in Alaska and these pertain or 24 don't pertain as you might look at it for Bristol Bay. One is 25 that subsistence is a type of welfare system that people are 115 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 trying to climb out of. In fact, subsistence is a viable 2 sector of local economies with higher income families actually 3 providing most of the harvest for others in their community. 4 A second myth is that subsistence uses are disappearing 5 and are being replaced by purchased foods and year round jobs, 6 but in fact, there's no evidence to support this. Subsistence 7 activities are highly valued and people in these communities 8 intend to maintain their subsistence uses as long as they live 9 and as long as their descendants live. 10 Another myth is that subsistence users are somehow 11 primitive using harvest methods that are antiquated or not very 12 effective and, in fact, it's just the opposite. Subsistence 13 uses in the past and today are efficient methods that are 14 always adapting. 15 And another myth really is that only Alaska Natives in 16 these communities are involved in subsistence uses when, in 17 fact, non-Native people have married into the communities, have 18 chosen to live in these communities and many non-Native people 19 have also adapted the traditions of the communities that they 20 now call home. 21 I was also to include a slide on how might oil and gas 22 development impact subsistence fisheries and this is, kind of, 23 an obvious list. I'm not going to talk about it really at all 24 except for to list these points that others can elaborate on. 25 And this is based in part on my experience with the Exxon 116 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Valdez Oil Spill and some of the effects that we saw there in 2 an extreme situation, but certainly developments can reduce 3 resource abundance, pollute resources and habitats, create 4 scheduling conflicts for harvesters, displace harvesters from 5 traditional har- -- traditional areas, create competition for 6 resources through demographic change, but they also can provide 7 jobs and a source of cash for investment in subsistence 8 activities if organized in a supportive way. 9 And my concluding points then are that subsistence 10 fishing takes place in this area in a mixed subsistence/cash 11 economy. The subsistence sector of the local economies is 12 critical to the sustainability of local communities. 13 Subsistence has key nutritional, economic, social and cultural 14 components. The future of subsistence uses in this area 15 depends upon healthy resource populations and continued access 16 to traditional harvest areas. And as you see a lot of work has 17 been done on subsistence in this area and I think in the future 18 coordination of research programs to monitor the effects of the 19 development on subsistence uses is necessary. 20 If you are interested in more information about our 21 program on the slides that I've shown and the data that I've 22 drawn from you can go to the Division of Subsistence website 23 found as a page at the Department of Fish & Game website. 24 There are data bases on line. You can call us and you can also 25 write us a letter if you have questions. 117 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 And I think that's it, so thanks a lot. 2 MR. SMITH: (Indiscernible) and good afternoon. 3 It's good to be here with you today. My name is Tiel Smith and 4 I was born and raised in Dillingham, Alaska. I am a lifelong 5 fisherman of Bristol Bay. And out of necessity and opportunity 6 I live in the Anchorage area now working for the corporate 7 office of Bristol Bay Native Corporation as their lands and 8 resources manager. 9 Daily I work closely with about 30 different villages 10 within our Bristol Bay boundaries and I'll show that in just a 11 moment in a slide show. I work with them on economic 12 development projects. I work with them on their land 13 conveyance and ultimate entitlement to their allotments and to 14 their village corporation lands. 15 Bristol Bay Native Corporation has made a contribution 16 to this week's dialogue. The Corporation encourages and 17 supports information sharing especially around important 18 resource issues as is being spoken about these last couple of 19 days. 20 I'd like to thank Sea Grant and others for the 21 opportunity to participate and have benefitted greatly by the 22 dialogue that has happened so far. 23 What I want to highlight before I begin is talking 24 about subsistence when it has to do with a regional corporation 25 has a little bit of a unique twist. We are the subsurface 118 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 owner to three million acres in a boundary of 34 million acres. 2 And so when you go to our web page or look at our mission and 3 vision you'll see enriching our Native way of life. And you'll 4 see when I finish my presentation how it is that Bristol Bay 5 Native Corporation helps our 8,000 shareholders enrich their 6 Native way of life through their subsistence uses. 7 Beginning here you'll see a few formatting issues 8 coming over from PC to Mac, but if you'll ignore those then I 9 think you can see most of them. This is a quote by the late 10 Harvey Samuelson and this, kind of, embodies what I think our 11 early leaders felt and imagined as they began starting these 12 Native Corporation at the beginning of the Alaska Native Claims 13 Settlement Act. 14 Southwest Alaska or the Bristol Bay area is about 150 15 miles southeast of Anchorage. Its boundaries outlined in red 16 are about 34 million acres or 40,000 square miles. And at the 17 inception of the Claims Settlement Act Bristol Bay Native 18 Corporation was entitled to about three million acres of 19 subsurface lands. The surface lands would ultimately go to the 20 Village Corporation. 21 I'll just quickly highlight the different landowners 22 within this boundary. First off, you'll see the conservation 23 lands in green, you'll see the state lands in blue. In pink 24 are the Native lands and ultimately the federal lands in 25 yellow. 119 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 You'll notice that a large chunk of the lands are made 2 up of some major parks and refuges, the Wood Tikchik State 3 Park, the largest state park system in the United States and 4 the Togiak National Wildlife Refuge, Katmai National Park and 5 Preserve, Becharof National Wildlife Refuge and there are 6 others, but I highlight those because as we consider our land 7 management strategy we really do think about this lands, how 8 they benefit all the stakeholders in this area, particularly 9 our shareholders and manage our lands accordingly. 10 The next couple of slides just highlights some 11 meaningful and specific areas within our region. Within the 12 region are approximately 29 villages. They are made up of 13 Eskimo, Aleut and Diana Athabascan -- and I put Eskimo there, 14 but it's Yup'ik. Each have their own distinct Native language 15 and dialect and there are specific local arts and crafts. 16 As been said many times and repeatedly Bristol Bay is 17 known for its renown salmon runs, king, sockeye, silver, chum, 18 pinks plus rainbow trout, arctic char, grayling, northern pike, 19 lake trout and dolly varden. Beluga whales and Orca whales 20 also follow the salmon runs. 21 I shouldn't probably tell this story, but I remember 22 fishing for pike up what we call the Branch River or what 23 others call the Alaganik. And the way we used to do that on 24 occasion was to stand on the bow of a skiff with a shotgun and 25 wait for the pike to move and then we'd shoot the water and the 120 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 shock of the wave would have the pike float to the top. That's 2 one way to fish pike, I guess. 3 A few of the Native animals within the area that are 4 subsisted off of. Many of the activities, the highlighted 5 activities within the region. I just got a two minute warning 6 so I'm going to have to speed up here. 7 The economy, one of our main focuses of Bristol Bay is 8 to assist in the lower cost of energy is our -- as a main 9 focus. Culturally speaking subsistence is the heart and soul 10 of our region. Historically commercial fishing is the 11 economies mainstay. Government is the major employer whether 12 it is federal, state, borough, city or tribe. Tourism is a 13 growing sector in the region. We've heard statistics and 14 facts, important facts about all of these. 15 Construction is a constant activity in the region. 16 Many capital improvement projects are government funded. To 17 date I think the gravel sales for the Bristol Bay region from 18 the Bristol Bay Native Corporation side equal about $10 19 million. 20 At the inception of Bristol Bay Native Corporation at 21 ANSCA we were given $32 million and three million acres. We've 22 done a lot of business and investments. A couple highlights 23 would be Peter Pan Seafoods purchased in '75, sold in '79 for a 24 gain of $13 million. The Hilton Hotel was purchased in 1977 25 and sold in '97 for a gain of $46 million. 121 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 The current business activities include vertical and 2 horizontal construction, engineering, oil field services, 3 government contracting, environmental remediation, card lock 4 (ph) fueling and information technology. The proceeds were 5 used to pay dividends, increase the portfolio and invest in new 6 business operations. 7 BBNC has grown to a company with revenues approximately 8 one billion. Currently the investment portfolio totals 9 approximately $100 million. Dividends have increased steadily 10 since the inception of the Native Corporation. Not all 11 regional corporations can say that. The total dividends paid 12 back are 75 million to the shareholders since '71. 13 7I (ph) revenues, this is the revenue sharing between 14 the regional corporations has totaled 70 million to date to our 15 regional corporation and half of that goes to the village 16 corporations within our region. 17 By resolution Bristol Bay Native Corporation supports 18 oil and gas exploration with an emphasis on the onshore. A key 19 point, we understand that if the offshore is not made available 20 to the industry it is likely that they will -- the industry 21 will not look on the onshore and therefore not Bristol Bay 22 Nation Corporation lands. 23 Most recently I traveled with Bristol Bay Native 24 Corporation board member Russell Nelson and (indiscernible) 25 tribal leader Tommy Tilden to look at the coexistence of oil 122 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and gas development and fish on Sakhalin Island in Russia. 2 Whether or not the Bristol Bay Region is subject to a similar 3 coexistent situation it seems prudent to inform ourselves of 4 similar circumpolar situations as we made decisions going 5 forward. 6 We view much growth happening into the future and we 7 look forward to Bristol Bay Native Corporation along with its 8 shareholders being a part of that. Thank you for your time 9 today. 10 MR. ANDERSON: Thank you all very much. As 11 some of the other presenters did I want to lead off with a 12 story that was reminded to me this morning as I ran into one of 13 my cousins out on the street when he said, gee, Norm, I haven't 14 seen you in a while, you look good. And I remembered this 15 story that I had heard at a Tribal Chiefs Conference many years 16 ago and my good friend Jay Hammond repeated this so I feel that 17 I was very honored in doing so. 18 The chief was talking about his many years of living on 19 the streets and he wore the scars of many years of drug and 20 alcohol abuse. And he was talking now -- he actually was one 21 of the lead stars in the movie Dancing With Wolves. He was Ten 22 Bears if you remember. When he went to the chiefs he was 23 talking with them and they said gee, Jim, you look good. And 24 at that point he knew the four stages of Native American 25 manhood. It's your infancy, your early childhood, your manhood 123 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and you look good. 2 And so -- and this morning I was trying to think the 3 best way to have you all relate to me with all of this so if 4 you will all play along with me for a moment and close your 5 eyes. And while your eyes are closed I'm going to transform 6 you all into Aleuts. Those of you who are already Aleuts help 7 me welcome your new brothers and sisters. 8 Okay, you can open your eyes and I just want to inform 9 you, you are non-voting, non-dividend receiving. You're only 10 going to be with us for 10 minutes. 11 I, first of all, would like to show my appreciation to 12 the Eklutna Natives who welcomed me onto their traditional 13 lands. From the elders of the Bristol Bay region I carry your 14 welcome and best wishes. 15 My name is Norman Nicholos Anderson. My church name is 16 Nicholio (ph). I am the youngest son of Edward J. Anderson of 17 Akutan and Elma Christenson of Ugashik. I was born in Naknek 18 and I've lived there all my life. I'm a commercial fisherman, 19 as were my parents and as are my two sons. I was fortunate to 20 be raised not just in the loving home of two caring parents, 21 but also raised not just by my parents who lived off the land, 22 but many elders that taught me the respect for caring for our 23 land and keeping our waters safe. 24 One elder that comes to mind we lovingly regarded as 25 Grandma Nickolet (ph). Grandma Nicholet was an amazing person. 124 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 At a very young age she broke her finger and this is as far as 2 it went and when she would talk to us it was always an 3 attention getter, but it was more than that. It was what she 4 -- her story that came from deep inside her. 5 I learned more from Grandma Nicholet than I learned 6 from the territorial school in Naknek. She taught me about the 7 stars, the planet earth. She knew the earth's radiator and how 8 the exchanges of water cycled around the earth and how each 9 spring this exchange that carried long currents north created 10 the ideal conditions for planktons and bits to flow back down 11 which helped to feed the on coming schools of herring, salmon 12 and halibut. She told me any interruption in this life cycle 13 -- in this cycle will be the beginning of the end of our way of 14 life. 15 Forty years went by and one day I was at a climate 16 change gathering and heard the speakers talk about the earth's 17 climate and how the exchanges are at different times now. The 18 water is warmer and we see different species in the north. 19 Humans are causing this change with the burning of fossil fuels 20 and that's a different story. 21 Now, the (indiscernible) and the reason for our being 22 here today, MMS has divided Alaska into 14 planning areas. 23 Seven (ph) of these are in the Bering Sea. And as part of the 24 introductory it was pointed out that I have coordinated 25 meetings in the Bristol Bay region. And last year we were 125 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 fortunate enough to have some people from the Sakhalin Islands 2 come and visit us to share with us their ideas. And although 3 it is the Bering Sea that separates us, we also look at it that 4 that is what unites us and so it was very important to have 5 that dialogue created as they live similar lifestyles as we do. 6 The area that I have seen changed -- I've seen name 7 changes several times since I first became appraised of the 8 situation. It was the Bristol Bay lease sale of '92, North 9 Aleutians lease sale of '92, OCS sale of '92 and now it's known 10 as 214. Yet geographically it's still the same place off of 11 Nelson Lagoon. 12 We have heard enough about seismic testing so I won't 13 really get too much into that, but it came to kind of odd. I 14 was out with my boys last night visiting and looking around and 15 we stopped at a pet store and what came to mind was on the 16 aquarium tank it says don't tap on the tanks and so that just 17 -- imagine what -- much like someone, the way they hunt pike 18 with seismic activity. Sorry, Tiel. 19 Okay. Should oil and gas be found we next we'll see 20 the increase of (indiscernible) traffic on both sides of the 21 Alaska Peninsula. More noise in a relatively quiet area. 22 Offshore oil, offshore rigs brought in. Drilling will soon 23 start. Drilling mud containing arsenic, lead and other 24 volatile chemicals will be spilled or dumped overboard into the 25 paths of affected and affecting fish. 126 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 To quote my friend Jay Hammond, I cannot for the life 2 of me think of a worse place to do something of this nature 3 home to the endangered Right Whale and other species will soon 4 join the list. Sharing a common border to this sale area is 5 home to what is known as cod alley where the CDQ Fishery takes 6 place. 7 Another fishery has brought this area to homes 8 worldwide takes place here as well. The vessels I know as the 9 Corneilia Marie, the Northwestern and the Maverick the World's 10 Deadliest Catch made famous on the Discovery Channel. I want 11 to change lanes for a moment and change your mental image of 12 crab boats being slammed by high winds, waves pounding and men 13 to their knees. 14 The Selendang Ayu, we have pretty much covered that 15 with one of the panels this morning. 16 And I just would like to point out that in regards to 17 the weather and some of my cousins that live further down the 18 coast can talk about that much more, the weather that is very 19 similar to what happens in the Gulf of Mexico. The only 20 difference is they name their weather down there and we just 21 regard to as whether Pen Air is going to make it in today with 22 the mail. So we're talking amount the similarly high amounts 23 of winds. 24 One of the things brought to our attention was that 25 areas following the development of the Valdez spill was that 127 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 prized beaches for food gathering was becoming contaminated. 2 Families -- this is talking about the Valdez spill now, 3 families were ruined, lives jeopardized from highly (ph) 4 contaminated air while attempting to clean these beaches. 5 My mother, bless her soul called me the last nomadic 6 Aleut as I traveled to the Lower Alaska Peninsula to gather, to 7 hunt and to provide subsistence. One of the means that I think 8 are identi- -- are definitions of subsistence I feel is the 9 (indiscernible) takes to sustain and to share. 10 I brought in moose and caribou and berries and things 11 for my boys in here and that is the part of subsistence I feel 12 is that, that is the good feeling you get and it's not just the 13 activity. It is the means of sharing with something that's 14 very valuable. I don't see how we can put a price on that, 15 that's not anything you can replace. It is not just the food 16 that we get, but it's the family activity and culture as a part 17 of that. And these are the things that we feel that are being 18 threatened when we are dealing with mineral and hydrocarbon in 19 the Bristol Bay region. 20 My last comments on subsistence and commercial fishery, 21 they cannot speak for themselves. Many Native voices will not 22 be heard here today and I do not speak for them. I cannot 23 speak for the elders that saw the value of our lands and sea. 24 I can only repeat what the elders ask me, please don't let them 25 hurt the land. Remember that without sound geology we cannot 128 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 have sound biology. 2 I want to thank you for listening and thank you for 3 inviting me. And tonight look at the land and say thanks for 4 allowing me one more day of providing you protection. And 5 remember we must all do everything we can to save this big 6 village we call earth. (Native language)..... 7 MR. TILDEN: Before you start that time clock 8 I've got to -- since Norman turned you all into Aleuts, I've 9 got to turn you all into Yup'iks. So I would like for you all 10 to do is please hold up your little, teeny finger like this. 11 Everyone needs to do this otherwise I won't succeed. Okay. 12 Now, what I want you to do is I want you to put in up your nose 13 and you pick. Now you're all Yup'iks. Okay. Now you can 14 start the clock. 15 MR. ANDERSON: You liked being Aleuts better, 16 didn't you? 17 MR. TILDEN: My name is Thomas Tilden and I am 18 the Curyung Tribal Chief. I am a subsistence users. I think a 19 lot of people take subsistence for granted sometimes. They 20 don't realize that subsistence living is a full time job. It's 21 not something that you do on occasion. It's not something that 22 you do on weekends, but it takes up all of your time. 23 I am one of 13 children in my family. When I first 24 came into being when I was eight months old. (Indiscernible) 25 was our medicine man was blowing smoke into my face because I 129 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 had meningitis, tonsillitis and pneumonia and there was no 2 medical help in the Village of Ugashik where I was brought up 3 at near Babara (ph). And so he was trying to cure me and 4 that's when I came into being. I came into realize who I was 5 and started remembering everything since then. 6 I've lived a subsistence way of life all my life. My 7 family decided to move from Ugashik to Dillingham because of 8 education for the older children and also for me. And in 1963 9 we moved from Dillingham because Dillingham was too big. It 10 was a huge community of 400 people and so we moved to the 11 Village of (indiscernible) which is 40 miles up the Nushagak 12 River and my parents felt comfortable living in that community 13 of 50 people. When it hit 65 they thought it was too big, they 14 moved up to a place called Oxticox (ph) where they were the 15 only ones there, but we lived a subsistence life all of our 16 lives. 17 As a young boy I was given to my grandma and my grandma 18 raised me and she told me a lot of things, but I remember one 19 thing that she told me. She told me how rich she was because 20 she grew up along the Kuskokwim Coast up in a place called 21 Nelson Island and she moved from there in 1924 down to Igushik 22 by kayak and by dog team. And they moved because of the 23 epidemic and because of the lack of food. 24 And also my uncle who was (indiscernible) who traveled 25 all the way from up in the Anuipiak (ph) country down to the 130 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Aleut area and he told my grandmother about the richness of 2 Bristol Bay and ask that they move from there to Bristol Bay 3 because of the richness of the land. And my grandma told me 4 that to be rich was to be able to eat and to feed yourself. 5 That's what was richness to her. And she told me that we were 6 very rich because we had food on the table, that's what she 7 instilled in me. 8 My sleeping bag -- not a sleeping bag, but actually a 9 caribou skin. My blanket was a caribou blanket. I didn't wear 10 shoes. I only wore mukluks (ph) up until the time I went to 11 school and I couldn't wait to wear shoes and once I wore them 12 they were difficult to wear. They felt like as though I was 13 walking with planks. 14 So I went under -- underwent a lot of change in my 15 lifetime. I was schooled in Japan. I was schooled at the 16 University of Alaska in Dillingham, but I believe that the best 17 education I ever received was from my grandparents and my 18 parents and the way I was brought up to live. 19 I remember back in 1963 as a young boy we lived in the 20 Village of (indiscernible) and we ran out of food. The winter 21 was long and cold and hard that year with the majority of the 22 -- the temperature was down minus 40 below zero. The ice was 23 thick. We had to cut off the top of the ice to the river to 24 make steps down so that we'd be able to draw water. 25 And as spring came the ice didn't melt fast enough for 131 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 us to get down to our summer fish camps so we were up there in 2 the first week of June and we ran out of food. We ran out of 3 everything. So our chief in the village told the young hunters 4 to go out there and hunt and to get what kind of meat they 5 could. So they -- the best hunters went out and came back with 6 moose, came back with beaver, came back with rabbit, came back 7 with Ptarmigan. 8 Our teacher at the school freaked out and had me go 9 outside and have me hang the flag upside down to show that 10 there was an international emergency going on here and that we 11 needed help. And when I went and told my dad that my dad was 12 very angry and upset. And so that the teacher would not be 13 able to do that again he cut the flap pole line off (ph) and he 14 says there's nothing wrong with us. We are okay. We will 15 survive because not only did the hunters go out, but the 16 gathers went out, too. 17 The gathers went out there and were able to find 18 patches of bare ground where they were able to pick up berries 19 that survived the winter. They were able to peel the bark off 20 of the little birch trees and we were able to boil that up. We 21 were able to get fresh greens from the springs that were 22 growing around the area and able to eat that. We were able to 23 cut the buds off of some of the trees and boil that up with our 24 meat and the fish that we caught and survive. We subsisted. 25 There was no emergency, but the emergency in the minds of those 132 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 that thought that we were suffering, but we survived. 2 In 1992 the fish did not come back into Bristol Bay. 3 The Federal Government and the State Government was slow 4 reacting to the disaster that happened in that area. It was 5 the people who knew how to subsist, it was the people who knew 6 how to live off the land until the State and Federal Government 7 was able to catch up and bring us the aid that we needed, but 8 it was our lifestyle, our culture and our way of life that 9 saved us. And that's what's going to save us not only now, but 10 in the future. We cannot put that in jeopardy. It is worth 11 the risk should be the question. 12 You must take a look at the people that differ here 13 that are at the table today. Take a look at their corporations 14 and what drives them. Corporations are driven by profits and 15 dividends and re-elections. 16 You take a look at the oil industry and they're looking 17 at finding new oil, profits and profitability and elections. 18 You take a look at municipal governments and boroughs, they are 19 driven by taxing these corporations and these businesses. And 20 then you take a look at the subsistence users and the 21 subsistence users is driven by food. Food, food. 22 So you can see that there's a big difference between 23 the players that are here and who is at greater risk. Who is 24 going to suffer the most? Who can recover? Those are some of 25 the questions that need to be asked and I hope that some of 133 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 these questions do get asked and some of these questions do get 2 answered because I think that subsistence as pointed out by 3 some of the previous speakers is about culture. It is about 4 our lifestyle. It is about who we are. 5 And I think no one said it any better than Father 6 Michael O'Liska (ph) during a subsistence battle in Juneau 7 where one of the people that was fighting subsistence said, if 8 we took away your subsistence you would still live. Father 9 Michael O'Liska got up there and said yes, they probably will 10 live, but culturally, spiritually they will die a slow death 11 and that's what will happen to us. So that's the right 12 questions. Demand the right answers and ask who is more at 13 risk? Thank you. 14 MS. McGLASHAN: I want everybody to put your 15 thumb up and on the count of three we will say um-um (ph). 16 One, two, three. Um-um. You are no longer Yup' ik, you are 17 Aleut forever. 18 I just wanted to tell Mr. Olson that I was just in 19 Dillingham watching the basketball tournament and what a great 20 community and host that they are. I highly recommend if you're 21 traveling, travel to Dillingham is you're hungry or starving. 22 They definitely know how to cook. 23 My name is -- my Native name is Trina (ph). My tribal 24 name is Dances with Wolf. My great-grandfather is from 25 Scotland. My great-grandmother is from Attu. I grew up with 134 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 four other siblings in Akutan and Unalaska. I remember seal 2 hunting with my father. I remember seining with my brothers 3 and sisters for salmon in the summer, fishing for halibut 4 gathering sea eggs and picking salmon berries and blueberries. 5 How do we keep our culture alive? Every summer for the 6 past 10 years our tribe, the Qawalingin Tribe with many other 7 sponsors hosts a culture camp for one week. We have children 8 and mentors from the Aleutian Islands that come together and 9 educate one another. In the camp children learn not to catch 10 and fillet fish, to either dry or smoke. They learn how to 11 dissect seals and use the intestines to sew and make kamleikas 12 raincoats. They learn to make Aleut hats. They learn how to 13 Aleut dance on the sandy beaches. They also learn about flora 14 and fauna from medicinal purposes. They learn the Uniman (ph) 15 language and to cook the traditional foods. 16 With the Selendang Ayu and the Karoshma (ph) oil spills 17 we have subsisted less. Our spots to subsist were contaminated 18 so subsistence use is not as prominent as it used to be. We 19 also lost a sports fishing camp, Okino (ph) Bay due to the 20 Selendang Ayu spill. 21 Our Natives rely health of subsistence use. Our 22 ancestors have subsisted for over 9,000 years. 23 In closing the questions I have are what would the 24 subsistence implications be? What is at stake? And what would 25 be impacted? My answer is our lives. (Native language) Thank 135 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 you. 2 MR. OLSON: All right, one more hand for our 3 whole panel. I think we've got about 10 minutes for questions. 4 Brian, did you want to go ahead and do that or..... 5 MR. ALLEE: Why don't you go ahead. 6 MR. OLSON: Okay. If there are any folks that 7 have any questions there is a microphone here in the middle of 8 the room. Just come on up and we've got time for a few 9 questions so don't be bashful. Any questions? Going once? 10 All right. Well, it looks like there's no questions for the 11 panel so I guess we'll go ahead and end this if it's okay with 12 you Brian. 13 MR. ALLEE: Thank you very much for a great 14 panel. We'll it's time for a break. 15 (Off record) 16 (On record) 17 MR. ALLEE: Okay. We'll get started with the 18 last half of the afternoon here. Would you please state your 19 seats. Thank you. We've got a great panel here on 20 Prespectives on Energy-Fisheries in Cook Inlet and so we'd like 21 to get on with that here, but before we do that we're going to 22 have a quick raffel just to get -- I think we are anyway. 23 Where is my staff, the rafflers. Doug and Gail are here to 24 conduct the raffle so I hope you're on the edge of your seats. 25 (Off record - raffle held) 136 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 (On record) 2 MR. ALLEE: So this afternoon's panel is going 3 to talk about Cook Inlet and the moderator for that panel is 4 Roy Agloinga. And Roy grew up in the White Mountain area and 5 he was the Mayor for a time there. He went to UAF and got a 6 degree in English so you can listen to his diction and his 7 excellent -- what was I going to say, Aleutian or something, I 8 don't know. I went to Berkeley, but I can't remember those 9 things. 10 And he is the Rural Affairs Coordinator in Mayor 11 Begich's office. And they're working to increase relationships 12 better 13 -- building better relationships with Rural Alaska in economic 14 development and to create better services for rural Alaskans in 15 Anchorage and in rural Alaska. So without further ado please 16 help me welcome Roy Agloinga. 17 MR. AGLOINGA: Thank you, it's good to be here 18 today. My name is Roy Agloinga, (Native language). Welcome 19 everybody this afternoon. The panel that we have today, of 20 course, is going to be focused on key study on oil and 21 fisheries in the Cook Inlet and so I'm going to very quickly 22 introduce the panel. The panel will then have 10 minutes each 23 to do their presentation and at the end of the presentation 24 we'll have about 10 minutes for Q and A. If you don't mind 25 let's hold the questions and answers until the end so that we 137 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 get through the entire panel. 2 So on -- maybe you can raise your hand because people 3 have, sort of, moved around. John Williams -- or, I'm sorry, 4 is the Mayor for Kenai Peninsula Borough. And we'll also have 5 Bill Popp with Anchorage Economic Development Corporation. 6 Gary Fandrei with the Cook Inlet Aquaculture Association. 7 Steve Grabacki with GRAYSTAR Pacific Seafood, Limited and 8 Michael Munger with Cook Inlet Regional Citizens Advisory 9 Council and Bob Shavelson with Cook Inlet Keepers. So welcome 10 to our panel. 11 Today we're going to go ahead and we'll start with 12 John. I'm sorry,..... 13 UNIDENTIFIED VOICE: We're starting with Bill. 14 MR. AGLOINGA: We're starting with Bill Popp 15 who is the Anchorage Economic Development Corporation. 16 MR. POPP: Thank you all for the opportunity to 17 speak to you today. It's a rather interesting charge to cover 18 150 years of oil and gas exploration recognition in 10 minutes, 19 but we're going to try and do that today. 20 I'm put together a very quick Power point. In fact I 21 got a phone call here about 25 minutes ago reminding me that I 22 needed to be here as I was finishing up the last slides, so 23 forgive me if I blitz through this. 24 I'm going to try and give you a quick retrospective on 25 the history of oil and gas in Cook Inlet, take a couple of 138 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 quick snapshots of the past and then look at it from a present 2 perspective. Also look at it from the perspective of 3 economics. I want to share this information for you as just a 4 small piece of the equation because there are a lot of issues 5 that are involved with dealing with these different, disparit 6 industries that have to try and work together when the oil and 7 gas industry comes into a particular region. 8 So if we can go to the next slide. I don't know if 9 I've got a clicker up here or not so I'll just work and 10 ask..... 11 So the first discovery of crude oil in Cook Inlet was 12 in the 1850s when Russian explorers recorded their first 13 observations of oil seeps in the Iniskin Peninsula on the lower 14 part of Cook Inlet. The first drilling attempt was on the 15 Iniskin Peninsula in the 1900s and then there were several 16 future attempts on that same area all pretty much dry holes. 17 The first commercial discovery of crude oil in Cook 18 Inlet is in 1957 at the Swanson River Field. Peak production 19 for Cook Inlet was in 1970 at 83 million barrels that year. 20 Oil production today in 2006, and it's even less than what I'm 21 about to tell you, 6.1 million barrels. We've seen a dramatic 22 drop off in production due in no small part to a major 23 distraction known as the North Slope that drew a lot of 24 attention away from Cook Inlet to that particular region 25 looking for the larger elephants that could be found up there 139 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 in terms of oil plays. 2 Total oil production to date 1.33 billion barrels. 3 It's been a very significant amount of production all pretty 4 much used in state. There has been some export of the oil, but 5 for the most part it has been consumed in Alaska. 6 Natural gas production to date 7.3 trillion cubic feet. 7 There's about 1.6 trillion cubic feet in proven reserves. 8 We've used about 196 billion cubic feet in Cook Inlet last -- 9 in 2006, the latest data, that powered about 80 percent of the 10 electric grid. It also powered approximately 60 percent of the 11 population for heating so it's a very significant part of our 12 energy picture in the Railbelt region of the state of Alaska. 13 Next slide, please. That first attempt unfortunately 14 was not photographed, but I -- thanks to Mayor Jack Roderick, 15 former Mayor of the Anchorage Borough was able to obtain 16 several photos from him regarding the historical perspective in 17 Cook Inlet. Quite a few attempts on the Iniskin Peninsula. 18 This one was done in 1934. You're going to notice the 19 progression of the technology. 20 Next slide, please. This is what it looked like in 21 1938. There were several attempts on the Peninsula. Once 22 again, never finding any commercially viable oil plays. 23 Next slide, please. Again, in 1954, you've got to love 24 the technology they were using then. It was some pretty scary 25 stuff by today's standards. 140 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Next slide, please. Then we hit Swanson River in 1957 2 which has often been credited with being one of the key pieces 3 to demonstrate to the Federal Government that we could be 4 economically viable as a State and has often been credited with 5 one of the key reasons that we were able to get statehood in 6 1959. When I show this picture in oil and gas circles there's 7 a lot of cringing especially from the health/safety and 8 environment guys because of the multiple violations that they 9 see in this particular picture and based on today's permitting 10 standards. 11 Next slide, please. We have not have a flawless 12 process in developing oil and gas in Cook Inlet. Looking 13 forward from the 1960s when development was -- exploration was 14 really starting to take off this was a blowout that took place 15 offshore in the upper part of Cook Inlet in 1962. It was a gas 16 blowout. To deal with the situation they sent ahead and lit it 17 and so we had an eternal flame for a few months out in Cook 18 Inlet until they were able to drill a relief well form the 19 offshore drilling rig and relieve the pressure and shut that 20 down. 21 Next slide. Three other significant events, very 22 significant events in Cook Inlet included the 1987 tank vessel 23 Glacier Bay. A tanker spill which spilled 159,000 gallons of 24 crude oil in Cook Inlet. 25 Then in 1987, also, we had the Steelhead Platform with 141 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 a natural gas blowout. That's a picture of that in the slide. 2 It burned down about half of the platform. Nobody was hurt, 3 but it was a very significant event. They had a blow-back 4 preventer fail on the natural gas drilling operation that they 5 were doing there. 6 And then, of course, in 1989 the tank vessel Exxon 7 Valdez ran aground in Prince William Sound and oil fouled the 8 beaches in Lower Cook Inlet. 9 The next slide, please. And that's -- see, this is why 10 this is a last minute production. Okay. So a view of Cook 11 Inlet today. This is just a quick montage of photos that try 12 and give you a sense of what's going on in Cook Inlet today. 13 You can see the newest platform in Cook Inlet which is over at 14 the Redoubt Shoals in the upper left. LNG tankers sailing out 15 of Cook Inlet on its way to Japan. The dock facilities down at 16 Tesoro in the lower left. The Agrium facility in the bottom 17 middle, after 40 plus years of operation just shutdown and will 18 not be reopening under any current plans that Agrium has 19 announced. 20 On the far right is a west side, onshore development, 21 exploration development for natural gas. One of our other 22 offshore platforms in the upper right middle, that's drilling 23 floor at the Nabors 273 rig in the upper right. In the middle 24 is the Marathon Glacier 1 rig, a very high tech piece of 25 equipment that can mobilize from site to site within a matter 142 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 of 48 to 72 hours depending on how involved they are. It's a 2 Mobile drilling rig. And then on the top is the Tesoro dock 3 with the set netters working their sites right in the dock 4 infrastructure that you can see. That's in between the Agrium 5 dock, the LNG dock and the petroleum dock for Tesoro. 6 The next slide, please. This is a quick overview of 7 the infrastructure. There are 16 platforms in Cook Inlet. 8 Quite a bit of infrastructure as far as natural gas pipelines 9 that go around the entire Inlet including crossing the ocean 10 floor, but also running up the west side and east side of Cook 11 Inlet into Anchorage serving Matanuska Susitna Borough as well 12 as the Municipality of Anchorage and the Kenai Peninsula. 13 There's also a liquids line on the west side of a 14 pretty big significance that goes down to the Drift River 15 facility which is all the way down in the lower left. That's 16 an oil collection station where the oil is shuttled across Cook 17 Inlet by tanker over to the Tesoro docks. 18 Next slide, please. Unfortunately, I don't have as up 19 to date a data as I wanted to give you on this, but this still 20 gives you a snapshot of the economic impacts to the Kenai 21 Peninsula Borough with $83 million in total revenues in 2005, 22 seven and a half million of that came from the oil and gas 23 property taxes and another 4.2 million came from the value 24 added facilities, so it was not a small part of the overall 25 taxing picture in the Kenai Peninsula. It was a very 143 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 significant portion of their tax revenues. 2 Property taxes in 2003 total estimated were 47.8 3 million so we've seen a significant rise in the revenues to the 4 Kenai Peninsula Borough in no small part from property taxes. 5 1,389 oil and gas workers in 2005. About 18 percent of 6 total KPB total report payrolls. Very high paying jobs in this 7 industry. With an $80,000 average oil and gas annual wage in 8 the year 2004 and you can see the borough's average at 33,997 9 in 2004, so it's very significant high paying jobs in this 10 industry. 11 Next slide, please. Giving you something a little more 12 current last year seen a fairly significant resurgence in oil 13 and gas employment in the state of Alaska. The Kenai Peninsula 14 Borough is starting to see some of that development in Cook 15 Inlet. Out of 319,000 people employed in Alaska through the 16 first three-quarters of 2007 11,550 were employed in the oil 17 and gas industry statewide with about 650 employed in the 18 chemical manufacturing industry statewide. 19 In the Kenai Peninsula Borough out of the 18,789 people 20 employed 969, I think it is -- this screen is a little crooked 21 here, were employed in the oil and gas industry and 335 were 22 employed in the chemical manufacturing industry. That does not 23 take into account the 150 or so workers we just saw laid off 24 for the most part at the Agrium plant after its 40 year run. 25 The average monthly wage in the Kenai Peninsula Borough for 144 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 those first three-quarters of the year last year was $3,056. 2 The oil and gas average wage for those first three 3 periods, three-quarters of the year was 9,885. Very 4 significant part of our overall economy in the Kenai Peninsula 5 Borough and here in the Cook Inlet. 6 The next slide, please. That's it, that's the down and 7 dirty less than 10 minute presentation. Wow, I've still got a 8 few minutes left. Boy, I'm going to give my time to other 9 folks because I know there's a lot to talk about up here. 10 You're going to hear some great perspectives from a number of 11 different people in this panel. I know them all, they all have 12 a very good and educated point of view on the issues that they 13 represent so thank you for giving me this opportunity. Be 14 happy to answer your questions when the time comes. 15 MR. AGLOINGA: Okay. Our next panelist that 16 we'll hear from will be John Williams, Mayor of the Kenai 17 Peninsula Borough. John, do you want to come up? 18 MAYOR WILLIAMS: Thank you very much, Roy. I 19 appreciate the opportunity to come before you and speak a 20 little bit about oil history and benefits that oil presented to 21 us on the Kenai Peninsula. 22 I have been living on the Kenai Peninsula for 40 years 23 now. I moved there from Fairbanks. I once said that I moved 24 to Kenai because I'd been froze out, flooded out, shook out and 25 burned out in Fairbanks, so I moved to Kenai and the invitation 145 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 brought with it a volcanic eruption, so things can be good on 2 the Kenai as well, but I bring that fact of 40 years of living 3 on the Kenai Peninsula to you because with it I combine 4 probably a very diverse and varied background that covers not 5 only the oil industry, but the teaching and the fishing 6 industry as both commercial fishermen and a sport fishermen as 7 well. 8 As Bill pointed out, the actual history of oil on the 9 Peninsula goes back a long way, but actually in 1957 is what 10 really led us into the development of oil as an industry and as 11 an economic factor on the Kenai Peninsula. And I dare say for 12 those of you that have been here since statehood I think that 13 was the turning point. I'm not at all sure that Congress would 14 have allowed statehood have we not have had some viable method 15 by which to show that we could support ourselves. 16 Earlier today in on of the other panels there was quite 17 a bit of discussion about subsistence and worries about oil and 18 the development of oil and what it would do to subsistence, its 19 lifestyles and so forth. Let me just say that fishing on the 20 Kenai Peninsula is a lifestyle. 21 There's commercial fishing of which I was a part for 22 some seven years. I had 10 set net sites over on Chisik Island 23 and was not all too successful at it or I probably would have 24 stayed at it, but we watched the fish price fluctuate from, you 25 know, 85 cents to $1.05 or 2.05 and back again and I think that 146 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 as an industry, the fishing industry is relatively unstable in 2 that respect whereas the oil industry on the other hand has 3 brought stability into the economy to the Kenai Peninsula. 4 When we talk about fishing and oil we need to look at 5 the fact that on the Kenai Peninsula we've got subsistence 6 fishing, we've got personal use fishery, we've got sport 7 fishing, we've got commercial fishing both onshore and 8 offshore, by that I mean set nets from shore as well as others. 9 And we have the famous dip net fishery there as well where 10 folks from -- a lot of Anchorage come down every summer and do 11 a lot of dip net fishing there. 12 And in my mind at least in looking back over the years 13 I don't believe that oil has ever had Alaska detrimental effect 14 -- ever has oil has ever (sic) had a lasting detrimental effect 15 at all with -- on the fishing industry. 16 Let me just talk for a minute about the benefits of the 17 oil development on the Cook Inlet. When I first moved to the 18 Cook Inlet in 1968 there were about 10,000 people lived there 19 and we were not a -- what you would call a developed area. 20 Today there are officially about 53,000 people live on the 21 Kenai Peninsula. 22 In the summertime, thanks to your friends and 23 neighbors, we get up around 70, 75,000 people on the Peninsula, 24 a lot of people. And they come there for a variety of reasons 25 not only to involved themselves in advanced work in the oil 147 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 industry which picks up quite a bit in the summertime, but also 2 in the fisheries both sport and commercial. 3 As a result the Kenai Peninsula has to have grown in 4 services and its offerings for the people. The taxpayers of 5 the Kenai Peninsula expect and do receive quite a few services. 6 The Borough's overall budget last year ran about $106 million 7 and that's not counting the school, the District Broad of 8 Education's budget which will be in the neighborhood of about 9 $121 million this year. We have 43 schools. 10 We also have two major hospitals that are supported by 11 tax base. These are hospitals that are owned by the Borough. 12 They were voted bonding capacity by the citizens and so 13 therefore are paid for by the tax base of the citizens. A 14 great deal of that tax base as you've heard from Bill comes 15 from the oil industry, some $11 million. 16 So really when you look at the Kenai Peninsula as it is 17 today without the oil industry, the tax base, it's very, very 18 doubtful that the population base would be there, the 19 educational base for our 43 schools and the Kenai River campus 20 of the University of Alaska none of that would probably exist. 21 Incidently I did spend 17 years with the University of 22 Alaska teaching petroleum technology and process 23 instrumentation. That leads me to one other discussion about 24 oil development and about work in the oil industry. 25 A lot has been said about technology, the advances in 148 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 technology. We've come a long, long way in the 40 years that 2 we've been working oil in the Cook Inlet with the technology we 3 use. 4 In the late '70s I attended the University of Texas 5 Offshore Drilling School and we were then looking at advances 6 in offshore drilling and advances in offshore technology that 7 would be someday used in critical habitat areas and critical 8 areas of the world. Some of those studies and some of those 9 designs that we looked at then went on to be incorporated in 10 places like the North Sea, Sakhalin Island. 11 Incidently I've made five trips to the Sakhalin Island 12 region looking at their oil industry. And, of course, in the 13 Cook Inlet. And some advances that will undoubtedly be used in 14 advancing drilling in the offshore of the Arctic as well. We 15 have come a tremendously long way in developing technologies 16 not only for locked in place platforms, but for semi- 17 submersibles and floaters and for what we refer to as subsea 18 completion where everything rests on the ocean floor and when 19 you go by you don't see it 'cause it's not there. It's below 20 the depth of the ocean. 21 Interestingly enough the area out in the North Aleutian 22 range where we're talking about potential future drilling has a 23 lot of the same attributes as those of the Cook Inlet with 24 regards to water depth and so forth. 25 One thing that it does lack in the southern portion of 149 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 it is the ice line. We do have ice in the Cook Inlet and even 2 that ice has never been -- it's never caused detrimental issue 3 with oil. 4 Now, we talk a little bit about tanker traffic and Bill 5 mentioned that we did have a mishap with one of the tankers 6 several years ago. A couple years ago we had another incident 7 with a tanker. The tanker broke loose form its moorings, ran 8 aground, was recovered on the next high tide fortunately 9 because of new technology, new developments and, of course, new 10 laws. This tanker had a double hull. 11 About a month ago I visited the docks and welcomed to 12 the Cook Inlet a brand new tanker built in Korea carrying 13 400,000 barrels of Russian crude to our refinery in the Cook 14 Inlet. It has the latest technology for recoverable if they 15 have total power failure. It even has a whole computerized 16 system of 16 tensioning lines for docking which are all 17 computer monitored with tension sensors and so forth to 18 determine loads on the ship and shifting loads in case there's 19 increase. 20 I bring this up because the industry, the shipping 21 industry responded in a major way to that tanker that broke 22 loose during winter ice by completely designing a system that 23 could be used in and would be used in the event of anything 24 like that happening again, so the industry responds very 25 quickly to those issues. 150 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Incidently in managing the fact that we bought aboard 2 400,000 barrels of Sakhalin crude for those of you that use 3 locally produced gasoline just think of running Russian 4 gasoline in your cars today. It shows you why we need to move 5 ahead with an energy plan for Alaska and begin to think about 6 our future with regards to energy as well. 7 It's been a good life on the Kenai Peninsula for me. I 8 served 18 years as Mayor of the City of Kenai. I'm in my third 9 year as Mayor of the Kenai Peninsula Borough. And as I've said 10 I've been associated with both oil and gas development as a 11 teacher and as a worker in the oil industry and as a commercial 12 fisherman and as a sport fisherman as well. 13 So in considering the development of oil and gas it can 14 be very, very positive. It can be positive to the people. To 15 the people and their children who get good educations from the 16 salaries that their parents earn. 17 And it's also beneficial to government who serves the 18 people because it gives a good solid, sustainable tax base that 19 furnishes the funding for those schools, the roads, for the 20 hospital, for the service areas, for the senior citizen 21 centers, for the swimming pools that we support, the 22 recreational centers. 23 It buys our ambulances and it buys our fire trucks and 24 it does all those things that we as citizens like to see being 25 done by our government. So I have appreciated the oil industry 151 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and I've appreciated the commercial fishing industry as well 2 all of these years. So thank you very much. 3 MR. AGLOINGA: Thank you, Mayor Williams. The 4 next speaker will be Gary Fandrei with the Cook Inlet 5 Aquaculture Association. 6 MR. FANDREI: Good afternoon. My name is Gary 7 Fandrei, Executive Direction of the Cook Inlet Aquaculture 8 Association. I'm pleased to be here. I have a couple of 9 things I want to talk about. 10 The first thing I wanted to mention was that when you 11 come to meetings like this you have the opportunity to learn 12 new things and I was very happy this afternoon in sitting in 13 the back of the room and listening to the discussion that was 14 going on earlier. When I left home this morning my wife said 15 to me boy, you look good. Now I know what she was talking 16 about, so you never know what you're going to pick up. 17 What I would like to do is cover a little bit about the 18 Aquaculture Association is about and this is a program in the 19 Cook Inlet area that directs its resources at salmon and the 20 salmon fishery in the Inlet. I would also like to mention a 21 few things about some of the thoughts of the commercial 22 fishermen of Cook Inlet. 23 I, myself, am not a commercial fishermen, although I do 24 have the opportunity to work with the commercial fishermen on a 25 regular basis and they have expressed a few concerns and I 152 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 would like to relay those concerns to the group. 2 To begin the Cook Inlet Aquaculture Association as you 3 can see, kind of, our motto is there, providing and protecting 4 your salmon resource. Which one do I push here? This one. 5 There we go, I've got the right one now. It's the one on the 6 right. 7 We are a non-profit regional association and we're a 8 little bit different as a non-profit group in that we're set up 9 by state legislation. So we have a number of rules and 10 regulations that we have to abide by as an organization. We do 11 have -- our controlled by a Board of Directors and the makeup 12 of that Board of Directors is approved by the state. And our 13 responsibility is -- our mission is to protect self- 14 perpetuating salmon stocks and the habitats upon which they 15 depend. 16 And when I say that one of the things I would like to 17 point out here is the habitat part of that is very important. 18 As an organization trying to enhance the fisheries of Cook 19 Inlet we recognize that we cannot do as an organization any 20 better than what the nature environment is capable of 21 producing. So maintaining that good habitat out there is very 22 important in terms of how the fishery progresses and how the 23 fishery grows or maintains itself. 24 The other thing we rehabilitate self-perpetuating 25 salmon stocks. And a lot of people when they think of the 153 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Aquaculture Association thing of the hatchery programs because 2 that's generally what you hear about is that we do run some 3 hatchery programs. And those hatchery programs are critical to 4 rehabilitating some of the stocks that are out there that are 5 maybe having trouble. 6 We also use those hatchery programs to enhance the 7 fishery which is to provide some supplemental production so 8 that there is an additional options for harvest. 9 Now, as I said earlier I do get a chance to work with 10 the commercial fishermen quite a bit. It is that group that 11 provides our base funding. However, when we are conducting a 12 salmon enhancement program those resources are available to the 13 common property fishery. They are available to the sport 14 fishing harvest, to personal use or subsistence harvest as well 15 as the commercial fishery out there. 16 As I indicated earlier we are really critical about the 17 salmon habitat that's out there and that's one of the things 18 that we pay particular attention to. And the other thing that 19 comes into play with respect to rehabilitating or enhancing the 20 salmon stocks is that we like to maximize the value of that 21 Cook Inlet commercial fishery. 22 In other words, we're trying to get the most bang for 23 the buck out of the resource that's out there by making 24 opportunities available for commercial harvest as well as the 25 other user groups that are out there. 154 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 At this point what I'd like to do is just give you a 2 little bit of an idea as to what areas or what kind of 3 activities we're involved with. And this is a map of the Cook 4 Inlet drainage. Our headquarters is located in Kenai. We've 5 been there since the inception of the organization. 6 We also maintain a couple of what I call primary 7 facilities and these are our hatcheries that we're operating. 8 We actually own one hatchery and we're operating two state 9 facilities. The two state facilities are in Trail Lakes in 10 Moose Pass area and in the Tutka area which is across from 11 Homer. 12 The other facilities we have are what I'm calling 13 secondary facilities. These are facilities such as fish 14 ladders. We have a major fish ladder in the Paint River 15 drainage. The unfortunate thing is, is because of budget 16 limitations we have not been able to operate that fish ladder. 17 We're making some headway on that this year. We have secured 18 some funding and we're going to be doing some additional work 19 on that fish ladder hopefully and we're trying to get that 20 thing operating so that we will be able to do some enhancement 21 work -- additional enhancement work down in the lower part of 22 Cook Inlet in the Kachemak Bay area. 23 I mentioned our stocking projects. As you can see on 24 here we do have several stocking projects. They're distributed 25 throughout the Inlet area. Those are the green dots that are 155 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 on there. It is an important part of what we do, but it isn't 2 all of what we do. 3 We are involved in some habitat programs and one of the 4 habitat programs that we're dealing with are flow control 5 structures. And what we're doing in these particular systems 6 is we're maintaining small flow control structures so that we 7 can have available water to release from these flow control 8 structures to give to migrating fish the opportunity to get to 9 their spawning ground. 10 These structures are generally put into very small 11 systems or water flows that are limited and by making that 12 water available at a critical time period we can assist the 13 salmon to get up to the salmon grounds and spawn successfully. 14 There are a number of monitoring projects and this is 15 one of the things that as an organization we're probably going 16 to get involved with a little bit more into the future. These 17 monitoring programs are scattered throughout the Cook Inlet. 18 What we're trying to do is collect the information so that 19 those resource agencies that are responsible for the management 20 of the resource have the best information available to make the 21 decisions they need to make to manage that resource 22 successfully. 23 And we're doing a number of habitat projects. And 24 these habitat projects can be quite varied. There's one a 25 little bit later that I'll talk about in -- when we get into 156 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 some relationships with the oil and gas industry that I'll 2 mention again. 3 What I wanted to do is talk about some of the things 4 that I heard from commercial fishermen and some of the issues 5 that they have been worried about. One of the things that I've 6 heard is that, you know, there are some similarities between 7 the energy and the commercial fishing industries. 8 And basically what they're looking at is they both 9 harvest a natural resource in that, you know, the commercial 10 fishermen are harvesting the fish and the oil and gas folks are 11 taking the resource out of the ground. The difference I think 12 there might be the fact that the resource that we're dealing 13 with is something that's renewable, it can regenerate itself 14 with proper management. 15 Another thing that comes into play there is they're 16 highly regulated. The programs that we're running, the 17 commercial fishery is a highly regulated industry. There's a 18 lot of rules and regulations we have to follow and I believe 19 that's very similar to the oil and gas industry. 20 And the other thing I'll point out is that we're in the 21 public eye. And the oil and gas industry is in the public eye 22 and so is the commercial fishing industry. They are industries 23 that are consumptive and that they do take the resource and 24 that causes some concern with the general public and so there 25 is some watch dog groups that are out there keeping an eye on 157 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 what's going on. 2 Issues between the energy and commercial fishing 3 industries there's a couple of things I wanted to bring out 4 there. And the first one I think I've labeled here is 5 unanswered questions. And this is something I've heard from 6 some of the folks in the commercial fishing industry is that 7 when there is a lease out there or some activity going on 8 there's a lot of speculation going on in the community. And 9 there's a lot of frustration by these folks in not knowing 10 what's going on. 11 And what I would do is try and encourage the folks that 12 are either letting those leases out there or the people that 13 are bidding on those leases or planning to do something with 14 that to make a significant effort to talk to those folks that 15 are concerned out there to try to reach out and get to them. 16 To let them know, kind of, what your plans are. 17 I know you're not going to know all the information and 18 everything up front, but at least try to get 'em out there and 19 tell them generally what you're thinking about doing. And I 20 think that can put together -- put to rest some of those 21 concerns that are out there and stop some of that speculation 22 from breeding even greater questions and greater concerns that 23 may not even exist. 24 New problems, and this is one thing that I've heard a 25 couple of people talking about in terms of the new problems 158 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 that are out there and this is the issue of folks coming 2 together with things that were unanticipated. And the example 3 that was brought up was that there was an issue coming out with 4 tanker traffic in Cook Inlet. 5 Drift fishermen that are out in the middle of Cook 6 Inlet now have a new regulation that says they have to stay 7 1,000 yards away from any of the tankers that are coming 8 through the Inlet. When that tanker comes through the Inlet 9 and you're sitting out there with your driftnet in the water 10 you don't have the opportunity to pull that net and get out of 11 the way of that tanker before it's on top of you, so there is 12 some issues. 13 These folks are trying to adhere to the regulations, 14 but in terms of the fishing pressure and stuff that's out there 15 it's very difficult for them to do that. And I think that's an 16 understanding that needs to come about between the industry and 17 -- the two industries, the commercial industry and the energy 18 industry. 19 The last thing I was going to mention there is 20 cooperative opportunities. Several years ago we had an 21 opportunity to work with the oil industry on a project on the 22 west side of Cook Inlet to set up a temporary fish ladder to 23 maintain a run of fish into a system that was having difficulty 24 where the fish couldn't get over a falls that had formed as a 25 result of the 1989 eruption of Mount Redoubt. 159 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Working together we were able to pull that off and each 2 year we're installing a temporary fish ladder allowing those 3 fish to get up into that system. And I think that's a real 4 benefit to the industry, not only to the energy industry, but 5 to the commercial fishing industry as well. So those 6 cooperative opportunities, I think, need to be explored a 7 little bit further. 8 And in conclusion what I'd like to say is that I think 9 a lot of these things can be taken care of by good 10 communications and I think this forum is one way to get that 11 started. And I hope it only continues to grow and there's 12 plenty of opportunity for doing that into the future, so thank 13 you very much. 14 MR. AGLOINGA: And, again, we'll have some time 15 after the panel presentations for Q and A. Thank you, Gary. 16 And the next person that we have speaking will be 17 Steven Grabacki and with GRAYSTAR Pacific Seafood Limited. 18 MR. GRABACKI: Thank you, Roy. Thank you 19 ladies and gentlemen for being here. I'm going to talk about 20 the Oil and Fisheries Group of Alaska which was not limited to 21 Cook Inlet. And I want to make a special point of introducing 22 my co-author on this Mr. Peter Hanley who is recently retired 23 from BP and who was not only the past president of the Oil and 24 Fisheries Group of Alaska, but really in my opinion the 25 founding father of the organization. 160 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 You've heard something about the Cook Inlet offshore 2 energy industry especially from Mr. Williams and Mr. Popp and 3 that industry as you know is well established, but many of you 4 may be surprised to learn that there had been a great deal of 5 interest in OCS exploration in the early '80s, 25, 30 years ago 6 and that there was a great deal of work done on interaction 7 between the two industries, the oil and fisheries group, the 8 oil and fisheries industries. 9 The Oil and Fisheries Group of Alaska was founded in 10 1983 and was formed in anticipation of significant exploration 11 and was hoped potential development of the OCS and included 12 representatives of major oil companies and several major 13 fishing organizations and processing companies. 14 It had a purpose and goal and an objective. It 15 provided a forum for inter-industry communication. It's goal 16 was successful coexistence of the two industries. And it's 17 objection was formation of an easily accessible communication 18 channel among group participants. 19 The Oil and Fisheries Group of Alaska was a private, 20 not for profit organization. Membership in the group was 21 limited to participants in the three industries which is 22 offshore energy, oil and gas, commercial fishing and seafood 23 processing and geophysical exploration. 24 The bylaws of the organization recognized that the 25 organization was to avoid offshore conflicts, but here's 161 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 something important, to not be a forum to debate the issues 2 related to offshore oil and gas development. It was to solve 3 problems. It was a collaborative organization where the two 4 industries work together. And it was such a collaborative 5 organization the board of directors positions were shared 6 between the oil and fishing industry and the president, for 7 example, rotated annually. 8 There were several oil industry participants some of 9 whom don't exist anymore. There were fishing industry 10 participants, many organization still exist and are still in 11 business today, that's page 1 of 2. Page 2 of 2 I'm sure you 12 see a lot of names that you recognize here. And there were 13 some geophysical companies who participated in the organization 14 as well. 15 The steering committee composed of what is probably by 16 now considered to be some of the gray beards of the industry 17 and some of whom are still around, still active in their 18 various industries. 19 The initial focus was on geophysical activities in the 20 OCS. And the Oil and Fisheries Group of Alaska first product 21 was a manual for Geophysical Operations in Fishing Areas of 22 Alaska. And that's a document that has been around for quite a 23 while, produced in the early '80s and it was my privilege to be 24 able to assist with that production. 25 The manual presented information on the fishing 162 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 industry. Fishing seasons and areas, radio communications and 2 charts such as when does fishing occur in various regions like 3 Cook Inlet or the North Aleutian Basin. Where does fishing 4 occur. This is also a picture of salmon, salmon fishing in the 5 areas and groundfish fishing in the Bering Sea. 6 It provided information on how the gear looked and how 7 it was fished so what a crab pot looked like. What it looked 8 like in the water so a geophysical operator would recognize 9 when he was coming up on the line of bouys what he was looking 10 at and try not to run into them. And it provided information 11 for geophysical operators to coexist with the fishing industry 12 by showing them what the gear looks like in the water and how 13 to avoid entanglements with it so pass on one side of the boat, 14 don't pass right across the top of the gill net and if you're 15 going to pass the stern, pass very wide. 16 There was geophysical information provided to the 17 fishing industry such as geophysical operations, what the 18 fishing vessels -- what the geophysical vessels looked like, 19 information on the various lease sales and that sort of thing. 20 For example, this is how a marine seismic survey is conducted. 21 The big streamers that are deployed off from the back of a 22 geophysical boat and what they're trying to do in collecting 23 their data. 24 This is what it looks like in the water. This is 25 information for the fishing industry to avoid entanglements 163 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 with the geophysical industry from the plan and profile view. 2 How to pass and how not to pass. And some of the areas in 3 1984, Bering Sea where the geophysical boats were operating. 4 After this document was produced there were a couple of 5 other later activities. There was a symposium of oil and 6 fisheries topics that was put on and there was a meeting of the 7 two after the Exxon Valdez Oil Spill, but because of reduced 8 industry interest in OCS exploration the group dissolved after 9 about seven years. 10 So this is the take home message from us. We'd like to 11 encourage development of contexts (ph) relationships between 12 the two industries, maintain a practical approach to avoid 13 conflicts. Don't have any inter-industry group become a forum 14 for debate. Have it be a place of collaboration and 15 cooperation and provide mutual education on each industry's 16 operations. 17 Peter, is there anything that you would like to add, 18 anything that I forgot to cover. 19 MR. HANLEY: (Indiscernible - away from 20 microphone) very well. 21 MR. FANDREI: Thank you so much. That's my 22 presentation. Oh, one last thing, this document has been 23 scanned and placed on a disk and I will leave many copies of 24 the disk with Brian and his crew so they're available. Thank 25 you for your time. 164 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 MR. AGLOINGA: Thank you Steven. Representing 2 the Cook Inlet Regional Citizens Advisory Council is Michael 3 Munger. 4 MR. MUNGER: Good afternoon everyone. As Roy 5 just mentioned by name's Michael Munger. I'm the executive 6 director of the Cook Inlet Regional Citizens Advisory Council 7 or I'll refer to it also as Cook Inlet RCAC. 8 An earlier panel discussed opportunities and concerns 9 of citizens and potential oil and gas activities in areas of 10 the Bering Sea. Although this panel is focused on fisheries 11 and oil industry interactions in Cook Inlet I'd like to utilize 12 my allotted time today to tie this panel to the earlier panel 13 by giving you a brief overview of what we consider to be a 14 successful mechanism for addressing stakeholder concerns 15 regarding oil industry operations in Cook Inlet. And many of 16 those concerns in our area have been fisheries related. 17 Instead of discussing any of our specific projects such 18 as contaminant monitoring, sensitive habitat mapping, ocean 19 circulation model development, site specific oil spill 20 protection measures, navigational and pipeline risk assessment 21 or our many other projects, I'll focus today on the mechanism 22 for successful citizen involvement in developing these 23 projects. That mechanism is the organization that I represent, 24 the Cook Inlet RCAC. And I will addressed why we were formed, 25 who we are, what we do and why I believe we're successful. 165 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Before I begin my presentation though I'd like to 2 acknowledge two of our Cook Inlet RCAC directors here today on 3 this panel Mr. Gary Fandrei who represents the Aquaculture 4 Association and Mr. Bob Shavelson who represents the 5 environmental organization on the board. Also in the audience 6 is Molly McCammon and she represents the Municipality of 7 Anchorage. 8 The Cook Inlet RCAC was established under the Oil 9 Pollution Act of 1990 or OPA '90 following the Exxon Valdez Oil 10 Spill. OPA '90 established two RCAC, one in Cook Inlet and one 11 in Prince William Sound. Both RCAC's were established under 12 the premiss that only when local citizens are involved in the 13 process will trust develop that is necessary to change the 14 present system from confrontation to consensus. 15 The councils were intended to alleviate complacency 16 which many believe was the primary factor in the Exxon Valdez 17 Spill by fostering long term partnerships among industry, 18 government and the coastal communities of Alaska. To that end 19 the mission of the Cook Inlet RCAC is to represents the 20 citizens of Cook Inlet and promoting environmentally safe 21 marine transportation and oil facility operations in Cook 22 Inlet. 23 While there are many critical elements I briefly want 24 to discuss several of the most important aspects of Cook Inlet 25 RCAC's approach. 166 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 One is the collaboration with industry, government and 2 community partners and two, the broad base representation on 3 our board of directors or council. 4 In doing so I want to point out several major 5 differences in our models and the potential development of 6 similar models in your area of concern considering the North 7 Aleutian Basin. 8 The Cook Inlet and Prince William Sound RCACs were 9 formed many years after oil spill operations had been initiated 10 in both area. Cook Inlet has had active oil exploration and 11 production since the 1960s and Prince William Sound has had oil 12 activity since the 1970s. We inherited historical activities, 13 existing regulations and older infrastructures and 14 technologies. 15 We have been able to vastly improve the situations in 16 each area through our efforts through improved technology, new 17 regulations, et cetera, but you can build your process using 18 our lessons, mistakes and successes and can demand the newest 19 and best technology (ph) and safeguards be in place. 20 I'm not here to support or oppose development in the 21 North Aleutian Shelf area. I'm here to present what I believe 22 have been the keys to successful citizen involvement in our 23 area that could translate to your communities in the event that 24 there is oil and gas exploration and development or production 25 activities. 167 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Cook Inlet RCAC has often been described as a watchdog 2 organization, but according to the intent of OPA '90 and our 3 practices the councils role is to evaluate, advise and 4 recommend. Evaluation often means conducting our own 5 scientific studies and advising And recommending means 6 providing serious, thoughtful and accurate input on many 7 different issues. 8 In that role there are many times when not all parties 9 agree and our recommendations and comments be considered 10 burdensome to industry or agencies. However, we have found 11 that the biggest steps towards improving prevention and 12 response measures in Cook Inlet and the biggest leaps in 13 improved regulations and safety improvements have been those 14 based on mutual respect, cooperation and coordination among the 15 citizens, agencies and industry. 16 By building collaborative teams we've been able to 17 access better information and garner greater financial 18 resources and work out conflicts early in the process. Fox 19 example, we have worked closely with shippers and government 20 agencies to identify potential places of refuge for stricken 21 vessels. This project solicits input directly from local 22 residents early in the process instead of leaving the decisions 23 solely to regulators during the actual ship in distress event. 24 A similar process was used to develop site specific 25 protection measures for especially sensitive areas known as 168 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 geographical response strategies allowing diverse stakeholders 2 to identify the highest priority locations for protection in 3 the event of an oil spill. 4 In addition to bringing citizens concerns to decision 5 making processes, Cook Inlet RCAC also communicates the efforts 6 and perspectives of agencies and oil industry back to its broad 7 constituency through citizen participation on the counsel as 8 well as those through other outreach efforts. 9 We have proven the benefits of our processes of 10 involving citizens during oil spill prevention and response 11 planning activities and during actual oil spill response 12 efforts in Cook Inlet. We have been able to provide better and 13 quicker access to information and improved communications 14 between incident commanders and local communities under 15 stressful, real time events. 16 Thus we believe one of the council's greatest strengths 17 is its ability to find common goals and build partnerships 18 between and among citizens, regulators and industry while still 19 maintaining our ability to provide meaningful input towards 20 change. 21 Board based representation in our organization is 22 another key to the success of citizen involvement. Our 23 constituency is diverse and the composition of the 13 members 24 council or board of directors is designed to be as 25 representative as possible of Cook Inlet communities and 169 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 various interests. 2 OPA '90 build in a mechanism to ensure broad 3 representation and we represent the Municipality of Anchorage, 4 the cities of Kenai, Homer, Seldovia and Kodiak and the Kenai 5 Peninsula and Kodiak Boroughs. Other council members represent 6 specific interests with one member for each of the following, 7 Alaska Natives, recreational, environmental, commercial 8 fishing, aquaculture and the State Chamber of Commerce. 9 In addition to the council members nine non-voting or 10 ex officio members represent state and federal government 11 bodies with mandates related to the oil industry operations and 12 the environment of Cook Inlet. 13 Additional opportunities for citizen participation 14 exists through public member seats on the individual Cook Inlet 15 RCAC committees. OPA '90 ensures representation by council 16 members and additional interested public members on each 17 committee ensuring that a wealth of information, expertise and 18 experience is brought to the Environmental Monitoring Committee 19 and the Prevention, Response, Operations and Safety Committee. 20 Through these committee many Cook Inlet communities and 21 interest groups can be involved in efforts to promote safer oil 22 transportation and production and minimizing environmental 23 impacts. 24 We provide a formal, legislative, organized and funded 25 mechanism for multiple interest groups to raise concerns and -- 170 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to companies and regulators early and often during all stages 2 of activities and our success relies on established and proven 3 communication channels and relationships. 4 In conclusion while I focused this discussion on the 5 collaborative partnerships and broad base representation on the 6 council that have been key to the success of our organization, 7 there are other mechanisms. OPA '90 has identified numerous, 8 mandated tasks for both RCACs and we're meeting though (ph) the 9 identified goals through a combination of independent research, 10 monitoring and assessments, by obtaining independent scientific 11 and technical peer reviews of our efforts and through our 12 continued efforts in public outreach. 13 As I've stressed our council representatives provide 14 the direct links between and among their constituents citizens, 15 oil industry and regulatory agencies. As well our diverse 16 staff develops and maintains relationships among these groups 17 ensuring that communications are up to date and even to the 18 point of nagging, initiating demands when appropriate. 19 Our most recent success story is that through clear and 20 unanimous recommendations by our broad base council and 21 consistent communications by our staff, Tesoro Alaska recently 22 committed to bearing the cost and placing a year around assist 23 tug for the docking of crude oil tankers at the Nikiski 24 terminal far above and beyond the regulatory requirements. 25 And so with that I conclude my comments and thanks for 171 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 your attention. 2 MR. AGLOINGA: Thanks Michael. The last, but 3 not least presenter that we have today is Bob Shavelson with 4 Cook Inlet Keepers, so welcome Bob to the podium. 5 MR. SHAVELSON: Prior to the panel I made a 6 reference that I was in the clean-up position and I think the 7 good Mayor Williams took some offense thinking I was making 8 reference to oil spill clean-up, but I do assure him I was 9 talking in a baseball metaphor. 10 In any case, my name is Bob Shavelson. I'm the 11 executive director of Cook Inlet Keeper. For those of you 12 unfamiliar with Cook Inlet Keeper we're a non-profit 13 organization that was started in 1995 by a group of Native 14 folks, scientists, fishermen, ordinary citizens largely out of 15 their concern with oil and gas impacts that they were seeing in 16 the area. 17 Some people unfamiliar with us think that we receive 18 proceeds from the Exxon Valdez Oil Spill. We did not for our 19 start-up, but where we did find some settlement money was in 20 the settlement of the Clean Water Act lawsuit that was brought 21 in Federal Court against the major industry operators in Cook 22 Inlet including Unocal, Marathon and Shell for thousands and 23 thousands of Clean Water Act violations so that's what got us 24 started. 25 But you've heard a little bit about the history of oil 172 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and gas in the Inlet. I want to focus more on the offshore 2 area and I don't mean offshore in the legal context. I just 3 mean, you know, in the water. And it's interesting to know in 4 a historical context that Shell was the first company to 5 install an offshore platform at Middle Ground Shoal in 1964, so 6 they've got a long history in Cook Inlet. 7 You've heard from the Mayor and Mr. Popp, you know, 8 there's a number of benefits that come from oil and gas. 9 There's -- the industry has typically been looked at as capital 10 intensive and relatively labor poor industry, but the tax base 11 that it supports and the jobs its support are very important to 12 the Kenai Peninsula Borough. Today I'm going to go through 13 some of the public interest perspective, lessons that we've 14 learned. And I do have a clicker here. 15 So the first lesson that we've learned is that public 16 dialogue means little if leasing and development are presumed 17 and that's really one of the important sub-texts that we have 18 here in this discussion today. And that means before you ask 19 how you're going to develop, you have to ask the question if 20 we're going to develop. 21 And Governor Jay Hammond in 1977 answered that question 22 in Kachemak Bay with a no. And for those unfamiliar with it 23 Governor Bill Egan had improperly leased acreage in Kachemak 24 Bay for offshore oil and gas development. Governor Hammond 25 came in and recognize the vital importance of healthy fisheries 173 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to the community in the area and he bought back those leases 2 for millions of dollars. 3 And he did a very important thing that should be 4 important precedent for folks looking at Bristol Bay 5 development. He created the states first critical habitat area 6 in Kachemak Bay where surface entry for oil and gas development 7 was made off limits permanently. Of course the Legislature 8 could go back and change that, but I think with the growth of 9 fishing and tourism in the area that's unlikely in the near 10 future. 11 But what we've seen is a series of state and federal 12 lease sale processes and these things really start to grind 13 citizens down. They just keep coming back and coming back and 14 you can see the process on the back wall there. And so you get 15 people that will come up and they'll testify and they'll tell 16 very personal stories about how oil and gas development is 17 going to effect them and their tourism economy or their fishing 18 economy, but by and large you might see some tweaking. You 19 might see some education (ph) measures, but the central thrust 20 of the development moves forward and that's because it's 21 presumed that we're going to develop these things. 22 I put this picture up here for the lease sale a couple 23 years ago and this is a public hearing that Minerals Management 24 Service held on lease sale 191 in Homer. And I put it up 25 because it's really unique because it represents a time when 174 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 MMS did not go forward with a lease sale. And when they came 2 out with the announcement, you know, there was people that was 3 excited about it until we recognized why MMS didn't go forward 4 with the lease sale. And the reason was because there was low 5 industry interest. 6 Okay. So despite hundreds of people coming out and 7 talking very passionately about their concerns with oil and gas 8 it wasn't the public interest that was heard, it was the 9 industry interest that was heard. So, MMS spent millions of 10 dollars on this lease sale and they canceled it because there 11 was low interest. 12 And one of the things that that brings up from our 13 perspective is that there's an inherent conflict built into 14 MMS's mandate and that the first priority is always to lease 15 and to drill and then as a secondary mandate it's to protect 16 the environment and sustainable fisheries that it support so 17 there's that tension there with the dual role that MMS plays. 18 Lesson two is government agencies often fall prey to 19 industry pressure. I mentioned the Clean Water Act lawsuit in 20 1995 that help start our organization, thousands of Clean Water 21 Act violations were alleged there, but then in 2003 we had 22 hundreds more violations at the same facilities and what 23 happens is the industry is fined, they paid the fine, but those 24 fines simply becomes a cost of doing business. Okay. And 25 they're cheaper than compliance so you continue to see this 175 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 recidivous behavior and you see continued violations. 2 Under the Clean Water Act permit when Congress passed 3 the Clean Water Act in 1972 they envisioned a process where 4 every five years a permit would be issued and technology would 5 improve and you would rachet down your controls until 6 eventually you'd get to zero discharge. 7 Well, last year EPA issued a permit in Cook inlet that 8 just about tripled the amount of toxic heavy metals and oil and 9 grease that can be discharged into the public fisheries in Cook 10 Inlet. 11 We put out a report in 2006 that showed that it's 12 technologically feasible to re-inject these wastes and not to 13 use our fisheries as a dumping ground and with oil now over 14 $100 a barrel in the primary operator in Cook Inlet, Chevron, 15 reaping $18 billion in profits in 2007, we think the right 16 thing to do is re-inject these wastes, but EPA sided with 17 industry and they issued this permit. 18 And so we're been forced to join hands with the fishing 19 industry, including the largest dip net association in Cook 20 Inlet, United Cook Inlet Drift Association, two Native tribes 21 and another fishing group to suit EPA. And these lawsuits, 22 obviously they take a lot of time. They take a lot of money 23 and we feel that it's absolutely unnecessary for us to be 24 there. 25 One of the important things, too, to recognize is, you 176 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 know, you can get into the box of cause and effect and is there 2 harm from these discharges or not, but aside from all of that 3 there's a very important aspect that relates to marketing and 4 marketing perception. 5 Last night I was in Orso's and right on the menu it 6 jumped out at me, Kenai Wild. You know, we're branding and 7 marketing our fish very successfully to combat this glut of 8 farm raised fish on world markets. Well, any perception that 9 smudges that brand is not good for the fishing industry, so 10 when you start the discharge of toxic wastes in Cook Inlet 11 that's of concern and I think if you start poking holes in the 12 fisheries in Bristol Bay you're going to find similar concerns. 13 Lesson number three is that oil and gas corporations 14 will pass off costs and risks to the degree that they can. To 15 the degree that they're allowed. And, you know, corporations 16 have one overriding fiduciary duty and that's to maximize their 17 profits for their shareholders. So one way to look at it is 18 that corporations are just these externalization machines. 19 They want to push the costs off to everybody else so they can 20 maximize their profit and that's what we understand. We know 21 that that's what -- how the corporation is structured so we 22 recognize that. 23 A classic example is as I was just talking about the 24 dumping in Cook Inlet, it's cheaper to use our public water 25 resources as a private subsidy as a dumping ground than it is 177 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to properly treat and re-inject the waste. 2 This incident here, the Sea Bow Pride (ph) you heard 3 Mr. Munger talking about, the tug that Tesoro bought, we really 4 applaud Tesoro taking that step, but for many, many years we 5 were saying that this is an inherently unsafe place to operate 6 tanker vessels particularly in the winter. There was a study 7 done I believe in 1993 by Captain Dickson Sullom Voe in the 8 Shetland Islands in the North Sea oil and gas fields up there. 9 And he came in and he was an expert on navigational safety and 10 he made the recommendation that you need a tug for docking and 11 assists up here. 12 Industry continued to push that out, push it off until 13 one morning in January 2006 the Sea Bow Pride (ph) ended up on 14 the beach there in Nikiski with five million gallons of product 15 on it so that got everybody's attention. And I will say it was 16 a remarkable response. I never thought they were going to get 17 that boat off the beach. It was incredible. At the same time 18 we had to bring response assets from Prince William Sound and 19 there wasn't the capacity to lighter (ph) off all that oil that 20 was in there in Cook Inlet, so -- but it was truly remarkable 21 that they got it off the beach. 22 Continuing on that same lesson about the 23 externalization of costs looking at pipelines. And you can see 24 a diagram of the pipelines in the upper right there. We've got 25 about -- over 1,000 miles of oil and gas pipelines in Cook 178 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Inlet. I the lower left hand corner you can see a section of 2 pipe that was taken from the Dillon (ph) platform several years 3 ago. And on the bottom right is the Swanson River oil field 4 and that's part of the Kenai National Wildlife Refuge, had a 5 particularly large spill in 1999, but it took us doing a report 6 and really elevating negative public relations on this issue to 7 really see any action on this. 8 And we produced a report in 2002 that showed that we're 9 getting about a spill a month and that on average there was 10 about 50,000 gallons of oil spilled a year. Now, a couple of 11 large spills skewed that average, but still there was such a 12 high rate of spills and some of them were fairly sizeable, but 13 it took citizen action to do something about it. 14 And I won't go on too long, I see my time is running 15 out a little bit, but, you know, what is the role of government 16 in these things. We understand what corporations do, that's 17 very predictable behavior, but we expect our government to play 18 that objective, neutral arbitrator role and have a hands off 19 relationship with the industry, but increasingly we're seeing 20 that agencies at the state and federal level are getting 21 captured by industry and it's reflected in increasingly poor, 22 in my opinion, oversight on some of our extracted industries. 23 Lesson four, the risk of transportation extends far 24 beyond the area of production. The Exxon Valdez is probably 25 the classic example of that. We have other issues. You've 179 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 heard reference to the port of refuge for stricken vessels. 2 Kachemak Bay is a port of refuge for stricken vessels so the 3 picture on the top right there shows a tanker that had gotten 4 some ice clogged in its sea chest and it came leaking into 5 Kachemak Bay in a critical habitat area there. 6 But other issues arise and you can see with the circle 7 there, there's ballast water discharges. We have evasive 8 species issues. Smithsonian scientists found about a dozen 9 evasive species in the Homer harbor several years ago, so 10 there's a number of issues related to transportation. 11 And finally in the final lesson is pretty obvious, that 12 oil and gas resources are finite. You heard the reference to 13 Agrium. Agrium at one point, I believe, had upwards of 300 14 employees. Incredible resource for the tax base on the Kenai 15 Peninsula, but because you knew -- we knew that the day that 16 facility opened it was tied to a finite resource, that it was 17 going to close and as a result there's severe dislocations in 18 the Kenai Peninsula Borough now and people looking for work and 19 it's very disruptive. 20 The other side of the coin, too, is that industry 21 typically leaves a toxic legacy in terms of contaminated sites. 22 The Kenai Peninsula is littered with hundreds of contaminated 23 sites. You can go to the DEC's contaminated sites data base 24 and see it. And you can see here on the right is Chevron 25 refinery that -- this is the beach in Nikiski where there are 180 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 set net fishing sites just below that. You have continual 2 seepage of this contaminated plumb coming from under the bluff 3 there. So rather than excavating and cleaning it up properly 4 they just continued to..... 5 Is that for me to stop? I think it might be. I've 6 going over. 7 In any case I think I'm over my time, but I appreciate 8 the opportunity to speak here today and thank you. 9 MR. AGLOINGA: Again, let's give another round 10 of applause for our panel. You have microphones -- there's a 11 microphone there. I don't know if there's another one, but if 12 you have questions, please address those to the microphone. 13 UNIDENTIFIED VOICE: Hi, I have a question for 14 Mr. Munger. Can additional RCACs be formed aside from the OPA? 15 I mean, does it have to be done via the Oil Pollution Act or 16 amending it or how? 17 MR. MUNGER: I can only speak for the 18 experience that I am familiar and there are RCACs formed in the 19 State of Washington in the Puget Sound area and also in -- I 20 believe there's one in New Jersey so you can do that outside of 21 the OPA '90 legislation. 22 MR. SLADE: I have a question for -- I'm not 23 sure which of the panelists will be able to answer this, but 24 interested in the oil spill protection resources in Cook Inlet 25 in terms of trained oil spill responders and equipment to deal 181 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 with a spill today? I'm interested in this I'm from 2 Newfoundland on the East Coast and we're looking at that whole 3 situation today as our industry ramps up for more production 4 for our offshore so I'd be interested in hearing one of the 5 panelists talk about that. Thank you. 6 MR. MUNGER: What we have in Cook Inlet is very 7 similar to throughout parts of Alaska and Prince William Sound 8 and also in the United States is oil spill co-ops which is 9 where the oil companies operating in that area get together and 10 form a co-op to share common costs in oil spill clean -- for 11 clean-up activities, the oil spill response, skimmers and all 12 the associated equipment used for oil spill response. 13 And we have that it's called the Cook Inlet Spill 14 Response and Prevention Incorporated, I believe. It's called 15 CISPRI, I believe. And very similar to Alaska Clean Seas and 16 -- oh, the name escapes me right now, but the one in Prince 17 William Sound, but we do have an oil spill response co-op in 18 Cook Inlet. 19 MR. ANDERSON: Hello. Knowing the migratory 20 paths of salmon in Bristol Bay that are harvested in the five 21 (indiscernible) river (ph) systems, the (indiscernible) 22 migration of the juvenile salmon as they come out of these 23 systems and then as juvenile salmon (indiscernible) Bering Sea 24 (indiscernible) Island before they congregate and start heading 25 back out again directly through the lease sale 214 area. I'm 182 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 curious, and this is a serious question as I'm not familiar 2 with the Cook Inlet fishery. For 50 years I've fished Bristol 3 Bay and that's it, but my question what percent of the fish are 4 harvested once they pass Cook Inlet offshore rigs or the rigs 5 in the Cook Inlet if any? 6 MR. FANDREI: I'll try and give you an answer 7 to that. I don't know if I can give you a really good answer. 8 UNIDENTIFIED VOICE: Mics not on. 9 MR. FANDREI: There we go, thank you. I'll try 10 to give you a good answer to that. I'm not sure if I really 11 can give you a good answer, but I'll give you the best answer I 12 can. 13 Most of the platforms, the oil industry platforms, are 14 located in the upper end of Cook Inlet. Most of the harvest of 15 the adults coming back occurs below that so most of the 16 harvest, if you're talking about adults, would occur prior to 17 them reaching where the oil platforms are. 18 If you're talking about the smolt that are going out 19 then pretty much all the smolt that are going out are going to 20 go past those platforms. 21 MR. ANDERSON: Thank you, that pretty much 22 answers my question. I was just curious because whenever I'm 23 around talking with people I always get the question of, you 24 know, what they fish in Cook Inlet and so just in my mind I'm 25 just trying to organize some sort of response (indiscernible). 183 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Thank you very much. 2 MR. POPP: I just want to offer one other 3 perspective, too just to keep in mind. You know, comparing 4 Cook Inlet and the technology that's there today in terms of 5 the number of platforms is not a fair comparison to what we 6 would be seeing in any offshore development anywhere in the 7 world right now and that's quite frankly a function of the 40 8 year old technology that is out in Cook Inlet. You've got that 9 many platforms because they're old for the most part. They 10 don't have the reach so where you may have four or five 11 platforms on a given field, today you'll have one. 12 And so, you know, some of the issues in upper Cook 13 Inlet when it came to commercial fishing, which commercial 14 fishermen and I have talked about, is their concern as 15 development may move further south in the Inlet in the offshore 16 'cause there is interest in trying to explore and bring new 17 resources on line, they're worried about the exclusion zones 18 that are mandated by the Coast Guard around those platforms. 19 And that -- you know, they're worried about a loss of 20 fishing area, fishing grounds. That's a legitimate concern, 21 but it's not going to be, you know, if you want an equal size 22 industry in the lower part of Cook Inlet, it's not going to be 23 16 platforms. At least, you know, in terms of the way the 24 structures are in the upper Cook Inlet, so there are less 25 numbers. 184 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 They're going to be bigger platforms and you're going 2 to have challenges dealing with that and you're going to have 3 challenges dealing with, again, the exclusions zones that are 4 going to be set up around those. 5 MR. WILLIAMS: Another thing that's different 6 about the Cook Inlet as compared to Bristol Bay, of course, is 7 the tides. We have tides that range all 34 feet here at the 8 dock in Anchorage. Down around the platforms those tides run 9 as high as 27 feet, so you have a continuous washing back and 10 forth of the Cook Inlet which would carry a large number of 11 those fish in and out of the Inlet -- not in and out, but 12 through the Inlet at various locations so they do, kind of, 13 circle up through the platforms and then back down again, too. 14 MR. SHAVELSON: I would just say one final 15 thing is the surest way to avoid conflict with commercial 16 fisheries is to not have rigs in the water. And Bill mentioned 17 the technology improvements and in particular in the lower 18 Kenai Peninsula Pioneer Resources and formally ConocoPhillips 19 (indiscernible) region Cosmopolitan unit just north of Anchor 20 Point, they've got a well where they've drilled out 21 directionally from onshore and they're reaching federal leases 22 out past three miles so we've really applauded that because it 23 keeps the infrastructure onshore. 24 MR. POPP: But just to add to that if the 25 resource is 15 or 20 miles offshore you're not going to be able 185 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to develop it for onshore. The reach is not there yet. Maybe 2 in my childrens' lifetime. 3 MR. AGLOINGA: Okay. It looks like we have one 4 more -- time for one more question and then we're going to 5 break, so..... 6 MR. HARBOUR: Thank you. With the expertise 7 and diversity of this panel I'd like to know if any of you or 8 all of you or a group of you would like to address this 9 question. It seems to me that in this workshop are represented 10 two basic ways of approaching the problem. 11 The first is to debate whether or not there should be a 12 lease sale. And the second approach to assume that fishing and 13 energy industries could through collaboration identify problems 14 and seek solutions to problems. Could you care to comment on 15 that, on those two approaches? 16 MAYOR WILLIAMS: I'd like to take a shot at 17 that. I think that over the last four (ph) years there's been 18 a concentrated effort more and more of both the industry and 19 the fisheries of working together and discussing these problems 20 and working cooperatively to ensure that things work in a more 21 safe manner. 22 The issue of whether or not there should be a lease 23 sale, that's a really interesting question. Let's see, oil was 24 at 112 this week. It's dropped a little bit. I'm paying 3.59 25 a gallon in Kenai. Soon to be paying $4 a gallon at the rate 186 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 oil is going. Until the United States and, indeed, the world 2 decides they want to convert to something other than oil for 3 energy I think we're going to have to answer that question 4 positively. 5 Yes, we're going to have to explore. We're going to 6 have to explore further, deeper and more broadly across the 7 entire world in order to find those resources that we need to 8 run our industry and create our society, continue to operate 9 our society in the manner in which we've all become accustomed. 10 I, for one, do not want to start carrying clinkers on 11 Saturday, that means going back to burning coal for heating my 12 house. I would rather heat it with gas. Out in our 13 communities and our villages they would rather run on oil. Our 14 cruise ships for those of us that like to take cruises likes to 15 run on oil. Our jet aircraft that brought a lot of people here 16 run on gas. And so until we find some mechanism that burns air 17 and water then we're going to have to keep exploring. Thank 18 you. 19 MR. POPP: I'm going to take a little different 20 perspective on that than the Mayor did before Bob responds to 21 the Mayor. I've come into these sessions and I've done 22 sessions like this in any number of different forums. 23 I've had the privilege of having been invited to speak 24 in a number of communities in British Columbia about the 25 concept of opening up the Queen Charlotte Basin to offshore 187 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 development. There is a huge can of worms in terms of all the 2 different interests that are down there in a region that is 3 incredibly lush and incredibly beautiful and relatively 4 pristine if you ignore the untreated sewage going into the 5 water from a number of communities along the coast line, but 6 for the most part they're got a real can of worms to deal with 7 there and I've dealt with this issue in a number of forums here 8 in Alaska. 9 And I'm not going to stand up here and tell anybody 10 from the Aleutian Basin region, the Bristol Bay region, you 11 should do this. I've spoken to the Aleutian East Borough. 12 I've had the privilege of going out to Cold Bay, if you can 13 call it a privilege in, I think, it was February, Bob, but it 14 actually was quite spectacular getting out to Izembek. I can 15 understand the concern. I mean, it's a tremendous concern and 16 it should be, you know, definitely taken into consideration. 17 You've got a huge balancing act to take on as a region 18 as to whether or not you want this kind of development. And 19 you've got a huge balancing act in the fact that juxtaposed to 20 that and the possible good and bad outcomes of that development 21 you've got your current situation which is a mixed bag of 22 tricks, too. 23 You have your communities in some cases drying up and 24 blowing away. Your citizens moving out of your communities 25 because of ironically enough the cost of energy. Trying to 188 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 afford to live in communities where diesel is skyrocketing and 2 -- and if you can get it into the community and those are 3 challenges. And you've got that opportunity, perhaps, through 4 this development to address those issues, but is that a good 5 enough tradeoff. Those are the things that your communities 6 have to balance in looking at how you're going to afford and 7 deal with this. 8 And trust me, I will tell you forthrightly that oil and 9 gas development comes with baggage. Any resource extraction 10 industry comes with baggage. The question is how do you 11 address that? And how do you mitigate it and at what level is 12 it acceptable? And so that's where I try to come from in this, 13 you know, the Cook Inlet, the Kenai Peninsula Borough, I think 14 in net some has benefitted greatly from the oil and gas 15 industry, you know. 16 And I've got to -- I can't let this go, the Agrium 17 closure did not create wholesale displacement in the economy of 18 the Kenai Peninsula Borough. Most of that work force got 19 snatched up by the oil and gas industry because they're short 20 on workers. There's a very small percentage left that have not 21 been placed. And that is just a function of the fact that when 22 you go into these types of developments and you have a value 23 added manufacturer come to your community that relies on a non- 24 renewable resource, you know, go into it with your eyes wide 25 open. It's going to go away sooner or later. 189 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Agrium may come back. The facility may reopen if a new 2 gas supply is found. There's still opportunities for several 3 trillion cubic feet of gas to be found in Cook Inlet. There 4 may be an opportunity for North Slope gas to come to Cook 5 Inlet. Maybe the facility will open, but you can't set your 6 plans and goals on that. 7 You've got to look at these facilities when they come 8 as opportunities to take advantage of, but are finite 9 opportunities and that's where proper planning and forward 10 thinking comes into play if this is what you want to see happen 11 in your region. 12 MR. SHAVELSON: There are a lot of things to 13 say. But, you know, one of the -- probably the gorilla in the 14 room on this issue is climate change and it really hasn't been 15 discussed at all here, but we could drill every single drop of 16 oil from the Alaska OCS and we wouldn't even begin to put a 17 dent in U.S. demand and that's a reality. And so I think, you 18 know, our President Bush acknowledged (ph) to our addiction 19 which is fairly remarkable, I think we have to act on that and 20 we have to act quickly because climate change is real. 21 Alaska is feeling disproportion effects to climate 22 change, so business as usual is not going to cut it. And for 23 our kids and their kids it's the decisions we make today. And 24 I apprecaite hearing Bill say there's tradeoffs, but you have 25 to look at that big picture and climate and recognize that oil 190 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and gas are major contributors and also coal. We've got a lot 2 of coal in this state and we shouldn't go backwards towards it, 3 but if we're going to be thinking about these things and asking 4 whether we should be leasing in Bristol Bay, aside from the 5 fisheries we have to think about climate. 6 MR. AGLOINGA: Thank you, gentlemen. It looks 7 like we're out of time. 8 MR. ALLEE: Okay. Now we have an opportunity 9 to have, sort of, an open forum and get input and ideas and 10 suggestions from the audience. There's a couple of things to 11 mention. There's filling out of this survey. We'd like to get 12 this feedback for one. And then we have a number of panelists 13 who are in the audience or who would be willing to answer 14 questions. They can come up front, some of them if they'd like 15 or they can answer if there are questions directed to them. 16 Graham, you need to come up here, of course. No, no, 17 whatever you want to do, but -- so what we'd like to do is we'd 18 like to get the input. We'd like you to come up. We'd like to 19 record the input on your ideas about next steps, so let's look 20 at the agenda and there's some questions there. One of them is 21 what are the topics that you feel are important that have come 22 out in this two day session. 23 We've heard a number of different things, a number of 24 different concerns from different groups as what we're trying 25 to create here. We're trying to create a dialogue and an 191 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 opportunity to discuss issues, no foregone conclusions, have a, 2 sort of, interesting sort of non-advocacy discussion of the 3 issues of energy and fisheries in the North Aleutian Basin. 4 And so topics of interest, how best to go forward and expand 5 the dialogue on how best to go forward and develop the resource 6 for oil and gas, how best to go forward and expand the 7 dialogue. And in that connection other workshops, community 8 meetings, some ideas that came out here, form an RCAC. 9 What are the research needs and data gaps. What does 10 the group feel about concerns and needs that are not being 11 addressed. So is that helpful to you in terms of encouraging 12 you to think about this a little bit? So we'd really like you 13 to give one final push of energy here to get up and state your 14 opinion. This is an opportunity that we've created. We 15 thought it was important to do at the end of the session and it 16 seems asthough questions came out. 17 I felt like we had to cut some panels short just 18 because we wanted to move this agenda along, get a lot of talks 19 in, stimulate you, bring you up to a consciousness level so we 20 can talk about the issues and so this is your opportunity about 21 that. So who is going to be first? 22 MR. JUETTNER: I'll be first. 23 MR. ALLEE: All right. 24 MR. JUETTNER: That way you can be quiet. 25 MR. ALLEE: I like that, yeah. My voice is 192 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 going to go. We would love to have you use the microphone, Bob 2 Juettner. It would be really good if you could state you name 3 and organization and the issue or point that you'd like to 4 make. We're recording this and we're also keeping notes as a 5 redundancy. 6 MR. JUETTNER: First of all Bob Juettner, 7 Aleutian East Borough and I think this turned out quite well. 8 Now, ways for improving it. One, I think we do need to go 9 forward with more discussion in the future. Areas that I 10 thought we kind of rushed through are, kind of, the hard areas, 11 the hard science areas like, you know, seismic. I think 12 there's a lot of questions about seismic (indiscernible). I 13 don't feel like I've got any answers on the seismic..... 14 COURT REPORTER: Is the mic on? 15 (Simultaneous speech) 16 MR. JUETTNER: So anyway we should continue 17 with another workshop in the future, but focus more on, kind 18 of, the hard science (ph) and hard facts and figures. Jim Fall 19 did a good presentation on subsistence which I thought it was 20 very good. We started to touch on the seismic. 21 We started to touch on the regulatory issues and 22 there's a lot of different regulations in this program (ph) if 23 you ever get through to see what development is (ph) and I 24 think it would be important to have some more people come in, 25 maybe the MMS people that acutally do regulate what happens in 193 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the ocean, the Coast Guard as well as probably a little bit 2 more in depth discussion with EPA, (indiscernible) DES and why 3 do they do some of the crazy things (ph) that they do. 4 I guess one other aspect that I'd like to see is, 5 perhpas, there could be some meetings of groups just outside 6 (indiscernible) where people could get together and share ideas 7 and the dialogue going lower -- smaller or lower pace or lower 8 level, but in small groups that we could come back say in a 9 year and mabye there would be a little more concensus, maybe 10 not, maybe there will be a little more self-respect of each 11 other, maybe not, but at least we're civil and I think that's 12 beginning the dialogue. That's it. 13 MR. ALLEE: Thank you very much. Other 14 coments? 15 MR. BROWN: I'm Mel Brown. I'm retired from BP 16 having had worked for them for about 30 years. What I'm 17 curious -- more curious about is to get more information from 18 the oil people and I would like to see a panel of oil experts 19 sit on that panel up there that would be capable of answering 20 some questions in regards to selling the idea of the safety 21 aspect of offshore platforms in regards to -- the prettiest 22 success that Cook Inlet has had over the years. 23 And also some of the platforms out in the Gulf of 24 Mexico which has also experienced some success in terms of the 25 very dangerous weather conditions that happen and explaining 194 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 and giving a pictorial on sceen in regards to what the 2 subsurface valves do. And also the surface valves and how they 3 go into a shutdown process when an emergency like this comes up 4 because the technology has moved a long way in this particular 5 area. 6 I worked 16 years up on the North Slope on the first 7 offshore facility and we had some emergency concerns that 8 happened there that we went into a shutdown. We never 9 experienced any spills during those 16 years that I was up 10 there. And so the technology has to be shown to the people 11 because this if it's developed will be an offshore facility. 12 And the subsurface valve system they have with no backup is 13 pretty -- pretty clearly expalins some of the saftey features 14 that exists. 15 And I'd like to see some information given in terms of 16 training, job opportunities. I think this area needs to be 17 discussed with some more degree. 18 And Shell, I attended one of the sessions last year, 19 was able to give some kind of preliminary development plans on 20 what they are thinking. Very, very preliminary, but give us an 21 idea, you know, how many platforms, four, three, might be 22 planned. 23 And finally, lastly is there enough seismic information 24 to go for the lease in 2011? What seismic information that's 25 available a lot of times depends on whether these leases will 195 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 be sought after and that's, kind of, a question I guess that I 2 have or do the seismic -- does the seismic take place after the 3 lease sale? I would presume and guess that it would take place 4 before the leasing actually take place, so I just wondered if 5 somebody from the oil industry that's here right now might be 6 able to answer that question? 7 MR. ALLEE: Gregg Nady is sitting there, I bet 8 he could answer that. Could you use the microphone please, 9 Gregg. 10 MR. NADY: Thank you. I think all those were 11 really good comments and I'm sure they're captured (ph) here. 12 In terms of the first comment about explain the technology and 13 the subsurface -- surface controls, subsurface safety valves 14 (indiscernible) about 3,000 feet below the mud line. That's a 15 great thought. We're actually at Shell right now thinking 16 about trying to produce a video for (indiscernible - voice 17 lowers)..... 18 So to kind of walk through the technology from the 19 start of the seismic exploration all the way through 20 development, production, the valves and the shutdowns systems 21 and all that, so that's a great comment. We received that 22 actually from the North Slope Borough recently so in the 23 process of starting the work on the (indiscernible). And that 24 also can be broadly disseminated to a lot of people 25 (indiscernible). A great point, you know, we got to get more 196 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 information out to people to make a decision. 2 As far as seismic goes, you know, this existing 70,000, 3 $75,000 two dimensional seismic and historically we've 4 developed many gas and oil fields with two dimensional seismic 5 so that's clearly an opportunity. New seismic is now with 6 water and I think the MMS is considering this and I think their 7 view is that if there was new seismic (indiscernible) John Goll 8 is here to answer those (indiscernible). 9 MR. ALLEE: He's right over there. 10 MR. NADY: They would have to do some 11 environmental assessment before they could authorize that so 12 the likely scenario is that there -- I think the most likely 13 scenario is that there would not be any new seismic before a 14 lease sale. And, you know, every company will make a decision 15 on their own and the seismic that exists out there obviously a 16 lot of companies use that to bid on back in 1988. Every 17 company will have to make their own decision in 2011 and if 18 there is a lease sale, plus make a decision on is that enough 19 information for them or not. 20 I'm not here to tell you if Shell will bid a lease sale 21 or what we will bid or what information we would use 22 (indiscernible), but every company would make that decision. 23 There is a lot of older information (indiscernible)..... 24 MR. ALLEE: John, could you answer those 25 questions, please? 197 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 MR. GOLL: Again, there's probably not a direct 2 answer. John Goll from MMS. Yesterday I did show the seismic 3 that was available. It depends on, again, the strategies of 4 the companies. First of all we've told companies that if 5 anybody does want to come in and shoot seismic it's very likely 6 we will have to do an EIS and that's a major amount of work, 7 you know, with a lot of the issues today with seismic. 8 The sense we have from some of the companies that we've 9 been talking to is for the purposes of a lease sale they 10 probably would not need it. Some of the seismic companies as I 11 understand it are reprocessing the data and so the push to get 12 out there before sale may not be there, but before somebody 13 would want to drill a well they would have to do some search 14 over the area. 15 Part of that is so you figure out where to drill the 16 minimum number of wells, you know, the seismic information that 17 people collect today are 3D. It has another benefit by 18 reducing the number of wells that would have to be drilled. So 19 if there wer- -- if there were a sale it would be more likely 20 afterwards that companies would want to go out at that time. 21 MR. ALLEE: Thank you, John. Yes, sir, come on 22 up to the microphone, please. 23 MAYOR O'HARA: You look different from down 24 here. But several things here I think would be maybe helpful 25 for us. Dan O'Hara, Mayor of Bristol Bay Borough. Should we 198 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 start thinking about the permitting process which, you know, 2 five years can go by quite quickly, I think one of the things 3 that we talked about earlier, (indiscernible) but we talked 4 about revenue sharing, I think that's something that needs to 5 be looked at for (indiscernible). I'm not talking about going 6 to the State of Alaska. I'm not talking about just this a 7 federal (indiscernible) feds, goes directly into our pockets. 8 Obviously we'd have to deal with that (indiscernible). 9 And should the permitting process go and they're going 10 to maybe give it a chance we need to put -- have some input to 11 what we would like in that permit. In other words, our request 12 would go to MMS and say this is what we want (indiscernible). 13 For instance like if they go across Harrington Bay (ph) 14 -- I mean, from -- yeah, Harrington over to Left Hand Bay (ph) 15 and they put in an LNG plant (ph) to reduce it down to a 16 frozen (ph) state can we take some of that back to our 17 communities practically and have a reduced cost. What's the 18 purpose of supporting these oil companies if we're not going to 19 get something for ourselves and to reduce our energy cost and 20 cost of living. 21 I know the Slope is run (indiscernible) a spinoff 22 processing plant that when the oil comes up there's a little 23 (indiscernible) where it reduces the oil crude to a diesel and 24 they run that in their vehicles up there. (Indiscernible) 25 diesel (indiscernible) as far as I understand. And so are we 199 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 going to be able to get us a reduced cost of diesel fuel coming 2 to Bristol Bay because of that. Some ideas, some thoughts, 3 some things we've talked about before. 4 One of the things I think that would be good and 5 (indiscernible) I'm amazed, I guess, that other major companies 6 other than Shell Oil -- I give you credit Gregg for showing up, 7 you know, you know, and talking with us because it's certainly 8 been educational. Shell Oil will know how many employees 9 they're going to need if they were to get the bid so they know 10 how many are going to be out there. 11 And we were given some numbers on that a year or so 12 ago, maybe a year and a half ago on what the subcontractors 13 (ph) would be, but I think if we meet in a forum again I'd like 14 to know what are the oil companies looking for in the way of 15 subcontractors and what they would need from those people. 16 Maybe it's too early to do that. They've done this before so 17 they probably do know. You know, and I think the Aleut 18 Corporation, the Bristol Bay Corporation (indiscernible) 19 because everything is happening out is happening on our lands 20 and under our jurisdiction and so I think that's very, very 21 important. 22 Now, the last thing is that if you were to go out 23 hunting caribou and you had a shotgun you could probably spread 24 your shot over a lot of caribou, but if you're going to get a 25 caribou you'll probably have to take a gun out there and pick 200 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 out a caribou and this is the way we are here (ph). You see 2 all the current caribou herds are up there in the villages that 3 we represent and if one of us here and we do not have time and 4 it is not our job to leave the two or three other jobs I have 5 to take on one more job (indiscernible) caribou herd 6 (indiscernible). And I'm not a layman, I cannot do that. It's 7 your job to do that since you're going to form here (ph) and I 8 think that's very important. 9 What it, kind of boils down to -- I was trying to think 10 of the quarterback's name for the University of Wash- -- I 11 mean, Washington Redskins when they won a Super Bowl a while 12 back. They haven't won very much lately. (Indiscernible - 13 simultaneous speech). No, the other guy. 14 Anyway he said something (indiscernible) after the 15 game. They were interviewing him and they said how do you feel 16 about the Super Bowl. He said, you know, there's 52 men of us 17 on the field who desperately need rest and 85,000 people in the 18 stands who desperately need exercise and that's -- that's 19 what's happening here. We desperately need to get other people 20 informed on this. And I'll give Shell all the credit, they'll 21 gone all though Bristol Bay a couple times, you know, and we 22 know more now than probably they know on the Slope. Thank you. 23 MR. ALLEE: Thank you, Dan. Yes. 24 MR. TILDEN: Hello, my name is Tom Tilden of the 25 Curyung Tribe. First off I want to tell a little story, a 201 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Yup'ik story about this man that came up on a pond and was 2 drinking water with one hand. And an old Yup'ik man comes up 3 behind him and hollers at him in Yup'ik he says (Native 4 language). Translated it means that please don't drink the 5 water. The water is contaminated. It's full of 6 (indiscernible). And the guys is taken aback and he says, 7 speak English, speak English. I can only speak English you 8 stupid man. And the guy says, oh, okay, use two hands you'll 9 get more. 10 But anyway, in suggestions here first of all I would 11 like to suggest in regards of the steering committee that 12 someone from the Bristol Bay Native Association sit on the 13 steering committee 'cause I think that the people of Bristol 14 Bay are going to be impacted by the North Aleutian Basin sale. 15 And I think that representatives from that organization should 16 be there. 17 And I say that because I think that -- you know, that 18 maybe that they would be more willing to take a look at the 19 whole process here and come up with some ideas and some 20 questions that need to be answered. 21 I mean, when you look at the environmental disasters 22 that have happened not only here but around the world like the 23 Exxon Valdez and the Ocean Ranger and the Alyeska Pipeline, you 24 find that the science was probably there. (Indiscernible) 25 protection for those things do not happen (ph). However, it 202 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 man made errors that made those things happen. And we really 2 need to -- we really need to proceed with caution. And the 3 people that are most impacted by any kind of disaster are going 4 to be (indiscernible) real hard (indiscernible) and ask all the 5 right questions. 6 And I think that in addition to the Bristol Bay Native 7 Association you should probably be looking for more subsistence 8 users to be on that committee because when -- when 9 (indiscernible) there was a lot of emphasis put on fisheries 10 here today, but that's not all that's going to be impacted. We 11 haven't discussed marine mammals. We haven't discussed the 12 seal, the seal lanes (ph), the Belugas, the whales, the clams, 13 the seaweed, the plants that are in the water or the plants 14 that are on the shoreline that the people live on, that they 15 gather every summer. 16 So we need to also include those people that could give 17 us some insight on how much -- how much it effects us because 18 when I look at the science and when I read the material I can 19 see that there are a lot of things lacking that need to be 20 there and the only way that's going to get that info is to 21 expand the steering committee to make sure that Native groups 22 are there at the table as well as the subsistence user so that 23 they won't feel as though that they're left out in the cold 24 (ph). So that's my three suggestions. 25 MR. ALLEE: Thank you very much. Before people 203 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 start to go I just want to remind you that we have 3 by 5 cards 2 and if you don't feel like you'd like to make suggestion 3 verbally we would really like you to fill out the 3 by 5 cards 4 and drop them off at the desk there so we can utilize those. 5 They're really important, so -- Mayor, you're up, please. 6 Thank you. 7 MAYOR MACK: Thank you. I thought this was a 8 very, very informative gathering and the information that was 9 shared. The one thing that was not shared and I don't know how 10 many people know this -- I'll try to turn halfway around here 11 (indiscernible) address people. Is that this is a major 12 shipping lane. And I don't know how many really know it, but 13 there's a tremendous amount of traffic going through Unimak 14 (indiscernible) called Great Circle Route. What we failed to 15 address is securing that area when activity is going on. 16 There's a tremendous amount of activity going on in the Bering 17 Sea. Plenty (ph) of folks don't even realize how much oil is 18 being spilled out there now and there will be more 19 (indiscernible). 20 If we should have more activity going in there, and 21 this is one of my major goals, is to get a response vessel like 22 they have in the North Atlantic (ph) in the North Sea. I think 23 the name of the boat is the (indiscernible). And when they 24 come into our area they should be under our hands and no one 25 elses hand. 204 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 The accident that took place off of Unalaska was 2 because the guy said well, wait a minute now, I'm still 3 contacting my office and as the days went by we stood by and 4 watched this activity going. I suggest that we try to find 5 some way to address this issue. As soon as they come into our 6 area you're under our (indiscernible) and we'll be in charge. 7 If you should happen to have an accident we'll take care of it 8 (ph) and you'll pay for it later instead of us paying for it. 9 That's the way it is in the North Atlantic (ph) in the North 10 Sea. 11 You come into our area we will not see another Exxon 12 Valdez in that area ever again. They already know how to take 13 care of that. They're got tanker -- they've got tugs out there 14 watching that guy all the way up now, never happen again. We 15 don't want something like that to happen in our area. 16 The activity goes on out there and I don't think it's 17 going to come from the platforms, I think it's going to come 18 from the other ships that are traveling through there. If you 19 should have an accident or a power failure on the vessel it 20 could drift because of the tide action into one of 21 (indiscernible - voice lowers). We've got to be ready to 22 respond and I think that's the key to it. Everyone is afraid 23 of something like this and I think we can satisfy it quite 24 easily by a response vessel immediately ready to be dispatched. 25 There's something that's capable of handling anything that 205 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 comes through that channel. Thank you. 2 MR. ALLEE: Have we got other comments? Come 3 on forth. Thank you. 4 TERRY: Thank you. My name is Terry 5 (indiscernible). I am with the organization (indiscernible) 6 Dillingham. This gentleman asked a good question and I'm not 7 sure that he got the answer that his question deserved. And he 8 talked about the importance, perhaps, of asking the question 9 should an oil lease sale happen in Bristol Bay. 10 Curyung Tribal Council chief Tom Tilden talked about 11 some of the other nations that are involved in this decision 12 and the migratory birds all along the coast of Western Alaska 13 and northwest Alaska that that sage (ph) in that area 14 (indiscernible). I'm haunted -- I'm haunted by some of the 15 comments that (indiscernible) made (indiscernible) MMS during 16 the environment request for comments regarding five years plans 17 and (indiscernible) said that we recommend that you take 18 Bristol Bay off the table. We won't have adequate science in 19 order to evaluate and conduct a NEPA process and we won't be 20 able to (indiscernible) in a manner that's timely to conduct a 21 lease sale on schedule. 22 I'm haunted by -- by comments made by MMS 23 (indiscernible). I'm not sure of the exact language, but that 24 there will be a major oil spill during the exploration and 25 development of the field in this lease sale area. I'm haunted 206 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 by the fact that folks who are involved in oil spill clean up 2 work saying that there's not boom that's made anywhere that can 3 contain an oil spill in seas of more than three meters (ph). 4 I think that -- that for us to have a conference such 5 as the one today presupposes that there is a decision that's 6 been made to have an oil lease sale in this area. And I guess 7 I'm not -- I'm not entirely convinced in my own mind that -- 8 that the issue has been thought through and debated. I would 9 welcome the opportunity to have more meetings like this to talk 10 with folks from the area around Nelson Lagoon and King Cove and 11 Sand Point. 12 You know, I come from an area that -- that was, you 13 know, the subject of major industrial extraction 50 years ago 14 and the places are ghost towns now. If this project happens in 15 a 25 year cycle where are the jobs going to be at the end of 25 16 years or will we be at the same place only, perhaps, with less 17 ability to respond -- to rely on natural resources that we have 18 today. 19 I guess to make a long story short, I would like to see 20 a similar conference or, perhaps, a series of them that would 21 address the question do we have the information necessary to 22 make good decisions and have we really talked through some of 23 these things. 24 From the northern part of Bristol Bay I think that 25 there are people that feel that we might be the risk takers, 207 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 the risk bearers rather than the stakeholders. And that 2 because of currents and atmospheric conditions if there were a 3 spill our estuaries would be in jeopardy and unlike the folks 4 that are near the resource area, perhaps, some of the benefits 5 onto our local governments might not be there so we have a 6 difference there. And I think it would be good to talk about 7 some of those things. I'll stop there, thank you. 8 MR. ALLEE: The question about having -- expand 9 the dialogue and having more meetings is a good issue. The 10 question is would you have more meetings in Anchorage, Alaska. 11 Would you have more meetings in coastal communities 12 affected..... 13 TERRY: Absolutely, absolutely not. I would 14 welcome the opportunity to talk about these things in Sand 15 Point or in Dillingham or other places. I think that it would 16 be a good thing for some of the folks that are scientists to 17 come to Bristol Bay and to see our 23 foot tides twice a day 18 and see the spring tide or the fall tide and note the direction 19 of the winds and the currents when we have a fall storm surge. 20 MR. ALLEE: Thank you. Yes, Gordon has been 21 waiting, but right after..... 22 MR. SLADE: Well, as someone from the East 23 Coast and I'm very pleased to be here today to listen to the 24 dialogue and, in fact, the last two days. We didn't have that 25 opportunity in Newfoundland and Labrador in the '70s and '80s 208 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 to have a dialogue like this. It was, sort of, the government 2 said we're going to have oil and gas, we're going to have oil 3 and gas. And so what you're doing here for the last two days 4 is a very important exercise. 5 We've had oil and gas now for 10 years. The fishing 6 industry and the oil and gas industry in Newfoundland and 7 Labrador are working well together through One Ocean. They 8 have good dialogue with the regulator, Department of Fisheries 9 and Oceans, with the people that regulate oil and gas, but 10 every day you have to be on top of things and thinking about 11 possibilities and, you know, this is coming up. And the 12 fishers and the communities have to be aware of what's 13 happening. And so this information exchange is critical and it 14 has to go beyond the capital city (ph). 15 In our case Saint Johns, it has to be out in the 16 communities. As I said there's 604 coastal communities in 17 Newfoundland and these coastal communities you could ask the 18 question how are they benefitting from that oil and gas? Of 19 course they're not all affected. Saint Johns is affected. 20 There's probably three principle places in Saint Johns area 21 Newfoundland that get the direct impact from oil and gas. 22 Now, what's happening to the other communities, of 23 course, is as the government gets the revenue from oil and gas 24 it can do something with the infrastructure so you have better 25 hospital, you have better roads and generally that's the 209 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 benefit we see if you're living in Bonavista or you're living 2 in Saint Anthony or you're living on the coast of Labrador. 3 Newfoundland will become a (indiscernible) providence 4 in 2009 as a result of oil and gas. And since Confederation of 5 Canada Newfoundland has always been the poorest providence. 6 Highest unemployment rate (ph), unable to do some of the things 7 other providences have done so that's what oil and gas has done 8 in the past 10 years is enable the providence to do some things 9 in public infrastructure to bring the level of services up 10 comparable to other parts of Canada. 11 So there is a benefit, a real benefit from oil and gas 12 drilling, but people have to be informed (ph), people have to 13 be involved which you're doing here today. And I would 14 encourage you to have more of these sessions. Have them out in 15 the communities and then people will get a better sense of what 16 (ph). 17 And I'm making the assumption from this conference here 18 the decision to lease is not yet made and the dialogue going on 19 is not -- that decision is made and now you're looking at how 20 you're going to be involved in (indiscernible), maybe I'm 21 wrong, but that's just the sense I have from attending this 22 (indiscernible). 23 And I'm glad I was invited to come here today and I 24 certainly wish you well in your deliberations. 25 MR. ALLEE: Thank you. I'd like to thank you 210 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 for coming actually. It was a big help. Yes, sir. You 2 can..... 3 UNIDENTIFIED VOICE: Yes, sir. 4 MR. ALLEE: .....turn around and address the 5 audience if you're..... 6 UNIDENTIFIED VOICE: I'm addressing you here, 7 first. 8 MR. ALLEE: Okay, you go ahead. 9 UNIDENTIFIED VOICE: I've sat and listened to 10 much of the proceedings and I'd like to state that if we can 11 have these kinds of meetings deep in the heart of paradise 12 where oil and gas -- oil and gas (indiscernible) namely say in 13 the community of Cold Bay, Dutch Harbor or Sand Point and look 14 at working will all communities in the affected area to make an 15 evaluation of -- for ourselves regarding the actual impact of 16 oil and gas and looking at the requirements for infrastructure 17 in order to facilitate oil and gas. 18 I've looked at some of the options regarding the 19 transportation corridors for possible gas and oil lines from 20 the Bristol Bay side of the peninsula to the Pacific side of 21 the Peninsula. And when I look at some of these locations and 22 look at some of the information that's been gathered by members 23 of the industry there has been a lot of -- satellite imagery of 24 -- is being developed for the Cold Bay area. Around the 25 Izembek area. 211 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 There's been a lot of information that has been 2 gathered on the Left Hand Bay area, Sand Point corridors, 3 shipping corridors and surprising enough (indiscernible) a lot 4 of information on a bay in the Chidniks (ph), naming the 5 (Indiscernible) Bay. 6 When you start looking at the land base that is needed 7 for the development of basic infrastructure to move oil and gas 8 you need a big footprint. And not to say anything against 9 (indiscernible) Bay nor Cold Bay (ph) not much of an area there 10 to fully develop a shipping facility. And when you look at the 11 Cold Bay area you see how Cold Bay is boxed in by Izembek and 12 if you're looking at that kind of develo- -- a facility that's 13 in the heart of a area that is right now embroiled in 14 environmental dispute, just a simply road from King Cove to 15 Cold Bay. That argument is taking place over just a simple 16 road that people need, can you imagine the kind of discussions 17 and arguments will occur over developing the oil and gas 18 facilities that would have to run through the heart of Izenbek. 19 The reason I talk about this is that the communities 20 are going to have to get together and find out just exactly 21 what we have to work with land-wise because regardless of what 22 the oil and gas industry may like to do, you know, I think 23 there's a tendency in the industry no matter what industry 24 you're looking at is to play off one community against the 25 other. You get one group of people (indiscernible) position 212 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 themselves to kind of offer a better deal. 2 Well, there are no more better deals. The area on the 3 Alaska Peninsula, you know, has its own demands. And regarding 4 the oil and gas development from (indiscernible) and Moller up 5 the most logical place for any oil and gas support facility is 6 within (indiscernible) Bay. A bay that is a -- that's a deep 7 water bay. A bay that has the potential to (indiscernible) any 8 oil and gas (indiscernible) against oil spill and an area that 9 can run from a dock, a facility right into Port Moller without 10 crossing any mountain passes (ph). That's an area that has 11 received very little attention. 12 I think that the regional corporations, particularly 13 the Bristol Bay Native Corporation and the Aleut Corporation 14 along with the Lake and Peninsula Borough and the Aleutians 15 East Borough need to sit down and find out just exactly what 16 they've got to work with and made demands now on the oil and 17 gas industry and we'll see what we have to work with because no 18 matter who we are, where we are within the Bristol Bay, 19 Aleutian area we've got to work with the land, we've got to 20 work with the terrain, we've got to work with the water. 21 I personally think that the oil and gas -- the 22 resources within the area are going to be developed. I think 23 it's apparent especially when you're looking at the geophysical 24 problems that are blooming worldwide. Naming the 25 (indiscernible) rise of the Chinese or the Indians. There's a 213 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 demand for oil and gas, that's energy. 2 I think what we need to do is invite individuals from 3 the State Department who would be willing to talk frankly with 4 the residents within these areas to explore, you know, how 5 serious the issue is regarding the development of energy 6 resources within this country. That's imperative. 7 Regarding transportation infrastructure what I think we 8 need to do is see the -- see the state administration, you 9 know, calling for -- you know, looking at laying the ground 10 work for access across state lands on the Alaska Peninsula, on 11 the coastal plains. So when you look at the coastal plains of 12 the Alaska Peninsula by and large they're all fall within state 13 selections. 14 And the Department of the Interior needs to be brought 15 into play to start evaluating, you know, the necessity of 16 crossing wildlife refuge lands. These lands belong to the 17 people who live there. They should not be used as arguments to 18 box in communities or to prevent local development. 19 There should be no problem regarding, you know, simple 20 development of the construction of a road from King Cove to 21 Cold Bay. That argument should never have occurred. It those 22 arguments crop up again and again until the whole issue 23 regarding access across the refuge lands are settled. 24 And the presidential administration needs to be 25 involved in these discussion regarding oil and gas development 214 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 within Bristol Bay not just MMS. 2 MR. ALLEE: Okay. And I think you've made some 3 really good points so there's an opportunity, I think, to talk 4 to a couple of the Mayors about whether they'd be interested in 5 having meetings in, say, Unalaska. Perhaps, Mayor Mack with 6 regard to the Aleutian East Borough or Shirley Marquardt I 7 think is behind you there somewhere maybe she could talk about 8 UnAlaska's so I appreciate your comments. Thank you very much 9 for your time. 10 Shirley, would you like to speak to that just for a 11 minute. Excuse me, Paul. Do you think having a meeting in 12 Unalaska would be an acceptable approach for that community? 13 MAYOR MARQUARDT: Certainly. I would -- 14 personally I think King Cove and Sand Point that area that's 15 there is going to be truly, truly affected because they're 16 going to be the communities that see this intense growth that 17 Unalaska has already experienced, but we would be more than 18 happy to -- if we could get the Mayor to bring people directly 19 from Sand Point and King Cove to Unalaska it might work, but I 20 think it's really important and several people have said it 21 that this information gets out to the communities. 22 You're talking to a lot of the community leaders and 23 it's a wonderful start and it's important, but when we go back 24 and people say well, how does it work. Well, I don't know, but 25 I was told that it does, that doesn't cut it. 215 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 And especially for Alaskans, men and women alike when 2 you bring something new around us we walk around it, we look 3 under the hood, we kick the tires until we're comfortable with 4 it, understanding how it works and does what it supposed to do 5 we don't want anything to do with it. 6 So I think it's really important to bring this 7 information as much as possible out to the communities and 8 certainly Unalaska would welcome any group that would like to 9 come out. 10 MR. ALLEE: Thank you. We got some input from 11 Bristol Bay about having a meeting out there, I think, in some 12 of those communities, so I believe that's what you were telling 13 us, that there was an interest, isn't that correct? And so -- 14 so those are the kinds of things that we can look into as well, 15 but thank you for those comments. 16 Paul, I think you had a comment. 17 MR. SEIN: Yes, thank you, Paul Sein (ph) from 18 Sein Consulting. With respect to the question I think you do 19 need to continue discussion here in Anchorage and also in the 20 villages. And, I think, with respect to what you want to 21 discuss at those meetings I think if Sea Grant combs through 22 the proceeding those topics will come out. They will clearly 23 come out. And instead of trying to list them..... 24 MR. ALLEE: Sure. 25 MR. SEIN: .....I think that's a good job for 216 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Sea Grant to do and the steering committee to pick through 2 those. 3 I think the timing of the meetings is critical. MMS 4 has a proposed lease sale schedule that they're going to pursue 5 and that is more-or-less a two or two and a half year process. 6 It might be a little longer and so they'll set a series of 7 meetings and a series of decisions and I think that whatever 8 this group does should look at that series to see what would be 9 best. 10 With respect to the question has the leasing decision 11 been made that Gordon Slade asked, no, that decision hasn't 12 been made. And, in fact, the purpose of the 1978 amendments to 13 the Outer Continental Shelf Lands Act was to specify an 14 analysis and decision process that we would present information 15 to the Secretary of Interior to decide whether or not the sale 16 should proceed. 17 With respect to the topic is there enough information. 18 Well, under the National Environmental Policy Act you are to 19 use the best information available to you. The difficulty on 20 information is that if want to wait until you have all the 21 information that's possible to gather then nothing would ever 22 occur because you can never get to that point. Every time you 23 learn something you realize there's new things to learn. So 24 you get the best information you can and proceed with it. 25 That's what one of the purposes of MMS's Environmental 217 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 Studies Program which to date they've spent $800 million 2 gathering information not just in Alaska, but a large part of 3 it in Alaska. 4 The only thing I'd like to mention is that Graham Long 5 laid out a very good decision process and I think that one 6 ought to look -- that script ought to look carefully at what he 7 was saying. Frame the questions. And once you frame the 8 questions then how to go through the idea of a decision 9 analysis and a real risk assessment. So I think that's a 10 critical thing. Look carefully at the questions. If the 11 question is should we have it or not there's another question 12 that goes with that. If you say no, you don't want it then the 13 real question is well, would will happen if not. 14 You know, we all have had preferences in life of, I 15 don't want that, but that's not -- the world doesn't just stop 16 there. Something happens when you don't do this, something 17 continues, something else occurs. So, you know is it further 18 dependence on oil or what is it, so you need to look at the 19 broader question, not just the narrow one that oh, I don't want 20 that particular thing, you know, what happens next. 21 So I think from Mr. (indiscernible) questions and I 22 think he raised some points, I think that the Outer Continental 23 Shelf Lands Act process is designed to get that information out 24 and the more this group can supplement the normal MMS process, 25 the better. MMS will schedule I'm almost certain public 218 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 hearings in the communities along the Aleutian Chain. On the 2 scoping meetings for the five year program they did that very 3 thing, scheduled the scoping meetings to hear input. 4 I think they're going to have to do the exact same 5 thing on the lease sale schedule. And whether this group uses 6 those meetings as a key or has a separate set of meetings, but 7 take into account MMS' process, analytical and decision process 8 and I think it will be a more efficient use of time and 9 resources. Thank you. 10 MR. ALLEE: Thanks. Thanks very much. Yes. 11 UNIDENTIFIED VOICE: Thanks. My name is 12 (indiscernible). I work with Pacific Environment. I did 13 attend some of those MMS scoping meetings. I believe the one 14 scheduled for Dutch Harbor, the nation's largest fishing port 15 was announced after the meeting occurred which makes it a 16 little difficult for people to give input. 17 I think, Paul's right, it's how you frame the questions 18 and that's what my comment was. When this conference was first 19 brought up to me I was told that it would be a conference about 20 how to develop Bristol Bay oil and gas resources properly. And 21 this is the problem with the Outer Continental Shelf Lands Act 22 is it's not about doing it properly, it's about getting oil out 23 of the ground and that is what this is focused on. 24 If you look at ocean policy in the United States we had 25 a couple blue ribbon panels examine how the United States 219 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 treats its ocean resources over the past five to 10 years. And 2 this blue ribbon panel came back and said that we don't do a 3 very good job of it. We have a hodgepodge of laws and agencies 4 that all try to work together but there is no uniform work 5 being done and there is no multiple use zoning that's 6 undertaken before activities are planned and there's also no 7 real eco system based management. 8 I think the Norwegian example of the integrated 9 management plan is an important example for us to look at and 10 one for us to look at before we undertake drilling in these 11 areas. I think the recommendations of the U.S. Commission on 12 Ocean Policy and a few (ph) ocean commissions are something 13 that we should look at in terms of how they would suggest we go 14 about taking care of Bristol Bay. 15 And I think a real good question for Sea Grant and for 16 the University would be would an area like Bristol Bay be 17 developed under an eco system based management plan for oil and 18 gas drilling. 19 Under the Norwegian Integrated Management Plan would 20 you drill in the heart of fisheries habitat and in the heart of 21 the designated critical habitat of the world's most endangered 22 whale population. I think that's the question that should be 23 asked. 24 I would also ask a question of, you know, under these 25 rules would you put drilling rigs in endanger habitat, run 220 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 subsea pipelines through eider habitat over land through more 2 endangered eider habitat to an LNG terminal which will be sited 3 right in the critical habitat for endangered Stellar sea lions. 4 I don't think that question has been answered and I would 5 really like to hear some more discussion and some more research 6 on how that plays out. 7 And I think if the Fisheries Management Council can 8 spend so much time working to protect an area like Bristol Bay 9 because it's so important to the $2 million fishery, if the 10 International Pacific Halibut Commission can close the area to 11 halibut fishing, if the Council can close the area to bottom 12 trolling, you know, why are we consider opening these areas to 13 oil and gas development. It just doesn't make sense to me and 14 I think we have to step back and ask these broader questions. 15 Thanks. 16 MR. ALLEE: Thank you. Graham. 17 MR. LONG: Thanks. I'm just going to take a 18 minute because I know we're close to time, but I just wanted to 19 follow up on -- I'll just mention (indiscernible) and the 20 discussion that we had about trade-ups. A lot of people have 21 said trade-ups. It's about balancing and benefits we've talked 22 about and some of the downsides that we've talked about. We've 23 talked most of the time in the last two days about generally 24 what those positives are and generally what those downsides are 25 and they're really complex, but that's the easy (indiscernible) 221 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 going to be effect is the ease of it. 2 The complex part is trying to figure out what the 3 question is and how that balancing actually looks 4 (indiscernible - voice lowers). When you're balancing 5 something you tend to stand what the good things are and what 6 the bad things are and how you feel about it. And you just 7 talk about them in very general terms. It's really hard to do 8 that because you don't really know what development to use or 9 what (indiscernible) or what different scenarios might look 10 like. 11 So one idea for you just to think about going forward 12 try to be organized in the way you ask your questions and when 13 you think about the problem try to reduce ambiguity that's the 14 biggest challenge that you've got right now. And problems -- 15 trying to keep specific -- think about maybe specific 16 development scenarios. Make them really quite precise. 17 Pick half a dozen, you know, half a dozen that span the 18 spectrum from doing nothing, you know, completely having no 19 development all the way to, you know, what's the biggest 20 development you could possibly imagine and throw out the detail 21 of those so that you can see what they mean for all the 22 different things that you've listed, the environmental impacts, 23 the economic impacts, how many jobs are we talking about. Just 24 to give people some reference points so that when you're having 25 these discussions and talk about having one size (ph) or 222 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 another you've got an idea of what you're talking about or at 2 least people have got some kind of (indiscernible) to help that 3 discussion. And that's just want I wanted to say. Thank you. 4 MR. ALLEE: Thank you, Graham. I think that's 5 going to have to be the last work. Just some brief, brief 6 points. Again, we would like to get your input and if you have 7 other things that you didn't get to ask we'd like you to write 8 them on a 3 by 5 card. 9 Very, very much appreciate your interest in staying 10 here and interacting and talking to folks. This meeting was 11 not about presupposing any sort of development. It was about a 12 dialogue from the outset. You can read that. Don't forget to 13 take one of these home and read the objectives and the reasons 14 for the meeting. And we'll be looking at this. 15 Denis Wiesenburg, the Dean of the School of Fisheries 16 and Ocean Sciences at the University of Alaska Fairbanks and I 17 and we're going to be looking at these questions and follow 18 along meetings and those sorts of things so don't hesitate to 19 provide input. 20 This material will be on our web site. We're going to 21 put the power points on the web site. We're looking for -- we 22 want to put together a proceedings as well. 23 Very much appreciate your coming. 24 Very much appreciate participating in the panel and 25 staying on point with this topic. So thanks again and I'll 223 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 give you a big round of applause. 2 (Off record - 5:30 p.m.) 3 (END OF PROCEEDINGS) 4 5 6 7 8 9 10 11 12 13 14 15 15 16 17 18 19 20 21 22 23 24 25 224 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA 1 C E R T I F I C A T E 2 3 UNITED STATES OF AMERICA) 4 )ss. 5 STATE OF ALASKA ) 6 I, Rebecca Nelms, Notary Public in and for the State of 7 Alaska, and Reporter for R & R Court Reporters, Inc., do hereby 8 certify: 9 THAT the annexed and foregoing TRANSCRIPT OF THE NORTH 10 ALEUTIAN BASIN ENERGY FISHERIES WORKSHOP was taken before Suzan 11 Olson on the 18th and 19th of March 2008, commencing at the 12 hour of 8:00 o'clock a.m. at the Marriott Hotel in Anchorage, 13 Alaska; 14 THAT this Transcript, as heretofore annexed, is a true 15 and correct transcription of said workshop taken by Suzan Olson 16 and thereafter transcribed by Suzan Olson Lynn Hall, and myself 17 to the best of our ability; 18 THAT I am not a relative, employee or attorney of any 19 of the parties, nor am I financially interested in this action. 20 IN WITNESS WHEREOF, I have hereunto set my hand and 21 affixed my seal this 25th day of April, 2008. 22 23 ______24 Notary Public in and for Alaska 25 My Commission expires: 10/10/10 225 R & R COURT REPORTERS, 811 G STREET, ANCHORAGE, ALASKA