Alaska Native

Children in Nuiqsut participate in a cross-country ski program called Skiku funded by ConocoPhillips.

ConocoPhillips Alaska

Alaska Native

Children in Nuiqsut participate in a cross-country ski program called Skiku funded by ConocoPhillips.

ConocoPhillips Alaska

Productive Partnerships
Preserving tradition and culture in the world of commerce
By Julie Stricker

n 2018, ConocoPhillips’ winter work plan included drilling an exploration well, Putu 2, which was only four miles from the North Slope village of Nuiqsut.

Naturally, the 450 village residents were concerned about potential impacts from the project, says Lisa Pekich, director of village outreach for ConocoPhillips. So long before any drilling took place, the oil company took the time to meet with residents and the North Slope Borough to address those concerns.

“There were lots of concerns in the community about being that close, from emergency response to, just in general, seeing the facility,” Pekich says. “Air emissions are a concern—any community that’s got industrial activity around it has concerns about air emissions.”

It took quite a bit of time—ConocoPhillips deferred drilling the well for a year, Pekich says—but in the end the parties agreed on a robust mitigation plan that allowed the project to move forward.

ConocoPhillips addressed noise and air quality concerns by using an innovative, highly efficient electric generator to power the drilling rig instead of a traditional diesel-fired rig. It also moved the generator a mile farther from the village.

“We used an enclosed flare, so it wasn’t visible, and we had some lighting mitigation so it wouldn’t be so bright from the community,” she says. In addition, ConocoPhillips used mobile monitoring stations to keep tabs on air quality and on the village’s freshwater lake.

In the end, the project met with approval through the borough’s permitting process, as well as the Nuiqsut village corporation, Kuukpik. The 2018 winter exploration season was a successful one for ConocoPhillips, Alaska’s largest oil producer. Putu 2 and two other nearby exploration wells struck oil. They are near two major recent oil discoveries: ConocoPhillips’ Willow and Armstrong/Oil Search’s Pikka.

This kind of cooperation between companies and Alaska Native corporations and communities is crucial to major resource development in the state. Enormous deposits of metals such as gold, copper, and zinc, as well as oil and gas, are located on or near land owned by the Alaska Native regional and village corporations, whose shareholders have deep cultural ties to the land and rely on it to live.

The benefits of resource development on Alaska Native lands isn’t restricted to local communities: they’re felt statewide because of a clause in the 1971 Alaska Native Claims Settlement Act that created the Alaska Native corporations. The clause, called 7(i), requires Alaska Native corporations to share 70 percent of revenues from resource development on their lands with the other twelve original corporations. Clause 7(j) allocates a portion of those revenues to the village corporations. So revenue from ConocoPhillips’ Alpine field, which is on land owned by Arctic Slope Regional Corporation, as well as zinc from the Red Dog Mine in Northwest Alaska on land owned by NANA Corporation, is spread across the state.

Industry Leaders

The partnership between NANA and Teck is considered an “industry-leading example of how indigenous peoples and mining companies can work together,” according to Les Yesnik, general manager of Red Dog operations.

It wasn’t an agreement that NANA made lightly. Mineral exploration had been ongoing for decades in the region and numerous village meetings were held to discuss future possibilities before approving the concept of mining at Red Dog in 1979.

“NANA was deliberate in engaging in mineral development—from the leadership in the early years to the elders and shareholders—there was a joint decision that this was an opportunity for the future, and they embraced it,” says Lance Miller, NANA vice president of natural resources.

When the operating agreement was reached on October 11, 1982, NANA had evaluated many potential partners. Cominco, now Teck Resources Limited, had a proven track record of operating in the Arctic, with mines in Greenland and Canada.

“NANA’s partnership with Cominco, now Teck, took years to develop and vet,” Miller says. “With any business agreement, you pick your partners wisely.”

It’s proven to be a strong partnership, Yesnik says.

“We believe the Red Dog partnership is a great example of how resource development can create economic prosperity and opportunity while at the same time supporting tradition, culture, and heritage,” Yesnik says.

The relationship is built on four pillars: community engagement, protection of subsistence, economic opportunity, and respect for culture. The Red Dog mine also is the economic engine for Northwest Alaska.

“Leadership means action and courage,” says Wayne Westlake, NANA president and CEO. “NANA’s former leaders, after all the decisions they made, had the courage to take action to develop the Red Dog Mine.”

It’s been a mutually beneficial partnership, Yesnik says.

For Teck, it created what has become one of the company’s most successful operations. For the Iñupiaq residents of Northwest Alaska, it has provided royalties and jobs, both at the mine and through NANA-owned contractors. Since 1990, Teck has provided about $5 billion in economic contributions. Its annual payroll is about $75 million, and 55 percent of its employees are NANA shareholders.

Community Benefits

The Northwest Arctic Borough was created in 1986 based on a payment in lieu of taxes from Red Dog. Today, about 90 percent of the borough’s income comes from Red Dog, about $20 million to $26 million annually, according to NANA. That supports government services in the region as well as provides bonding for schools, programs, services, and other infrastructure. Five schools in the region have been built from these funds.

The payment in lieu of taxes agreement also includes a separate village improvement fund, based on a percentage of the mine’s gross profit, which funds priority projects in the borough’s eleven communities, home to about 7,700 residents. Through 2018, Teck paid $27 million into the village improvement fund.

Teck also offers university and vocational scholarships and training opportunities for NANA shareholders who are employees. Red Dog also has had an apprenticeship program that is only available to NANA shareholders at no cost to them. 

Mineral exploration has been ongoing in the eastern part of the region along the Upper Kobuk River. In the 1980s, NANA bought the Bornite copper prospect from Kennecott. They wanted to continue exploration and spent years discussing the possibilities of development with local residents before again looking for the right partner. In 2011 they signed an agreement with NOVAGOLD, now Trilogy Metals.

NANA values working with companies that advance the region’s mineral potential and create shareholder value while respecting the traditional subsistence lifestyle. That level of respect is essential, the corporation says. Trilogy takes care that local communities embrace their projects, and its success has attracted interest from other major companies, like South32.

Moving ahead with a potential mine at Bornite will provide more jobs, royalties, and contracting opportunities.

NANA’s investment in Red Dog Mine has produced three generations of highly skilled shareholders. In fiscal year 2018, 741 shareholders were employed at Red Dog. In the eastern part of the region, where mineral exploration is ongoing in the Ambler Mining District, rigs at Bornite were staffed 100 percent with shareholders. Overall, in FY2018, 840 shareholders were employed in mining operations, totaling about $45 million in wages.

NANA is also proud of the economic benefits that Red Dog has provided for all of Alaska through 7(i) and 7(j) sharing under ANCSA. Through FY2018, more than $1.2 billion has been shared with the other regional corporations.

Today NANA continues to advance mineral opportunities in the NANA region through partnerships as well as through self-funded grassroots exploration.

As a recognized player in the mineral development arena, NANA now evaluates additional opportunities to participate elsewhere in Alaska and Canada. The need for minerals is forecast to double by 2060, the corporation says. It has hosted leaders from the Bolivian government at Red Dog and been invited to Greenland and other Arctic nations to share its experience in mineral development.

Setting the Right Example

As far as advice to other companies looking to collaborate with local tribes or indigenous groups, Yesnik says that building a strong, lasting collaborative relationship enables both parties to understand each other’s respective priorities and perspectives and create lasting, mutual benefits.

NANA Management Services has a long history of servicing the resource industry.

NANA Management Services has a long history of servicing the resource industry.


He says a great example of the “many positive outcomes” from this approach is the development of an independent subsistence committee, which meets quarterly with mine representatives to review all subsistence-related issues. For example, the committee directs a regional caribou-monitoring program. During migration, the committee can request the closure of the 60-mile road that links the mine with port facilities on the Bering Sea to reduce potential risks to the herd. Shipping schedules are carefully planned to minimize possible effects on traditional whale and seal hunts.

On the North Slope, similar collaborative efforts are in place in the oilfields, says Natalie Lowman, director of communications for ConocoPhillips Alaska.

“As we have for decades, ConocoPhillips continues to sponsor environmental studies to better understand everything from air quality, hydrology, and archeology to mammal and fish populations,” Lowman says. “Many studies are carried out cooperatively, working with local communities, government agencies, and stakeholders to assess and monitor the ecosystems where we operate. Our ongoing world-class research programs help us understand the environment and identify better ways to protect it.”

Working with federal, state, and local regulators, as well as local communities, ConocoPhillips routinely develops and conducts multi-year baseline environmental studies programs including annual hydrological surveys within important watersheds such as the Colville River delta; lake surveys to document water quality and quantity and usage by various fish species; stream surveys to document the distribution and abundance of fish species; archaeological surveys to ensure culturally significant sites or artifacts are avoided; annual wildlife surveys to document the distribution and abundance of terrestrial mammals and avian species; and vegetation mapping surveys to understand how key wildlife species use certain habitats.

Nuiqsut elders Alice Ipalook (left) and Virgie Kasak attend Sunday dinner at the Alpine Central Facility dining room.

Nuiqsut elders Alice Ipalook (left) and Virgie Kasak attend Sunday dinner at the Alpine Central Facility dining room.

ConocoPhillips Alaska

ConocoPhillips also invests in educational, cultural, and youth programs on the North Slope. It has helped build playgrounds in Nuiqsut, Point Hope, and Wainwright; supported training programs in Anaktuvuk Pass; and funded STEM summer camps and tribal system and healthcare system training. In all it does, the company strives to be “inclusive, honest, and respectful” with all its stakeholders and neighbors on the North Slope.

An example of this came about a decade ago when ConocoPhillips needed to build a bridge over the Nigliq Channel of the Colville River to access its CD5 oilfield. The 1,420-foot, $100 million span was the first to cross that channel and local elders were concerned about its effect on the fish population.

“We got into project design and trying to pick a good spot to cross the channel,” ConocoPhillips’ Pekich says. “We kept working with the community—the landowners are the Kuukpik Corporation in Nuiqsut—to find a sensible solution for the community. Ultimately, we did move the location of the bridge crossing. It did take a while, but we were able to reach an agreement on the location that would allow the project to move forward.”