About the www.Alaskool.org project and its developers

The Alaskan Oil Boom

by Daniel Jack Chasan

Klondike '70, The Alaskan Oil Boom, Daniel Jack Chasan, pp. 61-127, Praeger Publishers, 1971. Used with permission of the author, for educational purposes only.

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ON APRIL 14, 1970, the Senate Interior Committee announced that it had worked out "a final settlement of all land claims of Alaska native people and villages." Senator Jackson said it was "a just and generous settlement which provides the essentials—money, land, a share in Alaska's mineral wealth and modern corporate institutions—to allow the Alaska native people to assume control of their own destiny and to deal with the urgent social, health and economic conditions they have faced for many years." Alaska's Senator Ted Stevens called the settlement "a series of compromises."

The bill proposed that the federal government pay the natives $500 million over a period of twelve years, that the natives receive 2 per cent of the royalties on Alaskan minerals located on public lands not patented to the state, and that they be given formal title to four million acres of land, with surface rights to three and one-half million more. The royalties would continue to be paid up to $500 million, making the total amount of the cash settlement one billion dollars.

The bill sets up village corporations to hold and administer the land, two urban native corporations—one for natives in Alaskan cities and one for natives living in cities in the rest of the United States—and three statewide organizations in Alaska. The first, the Alaska Native Commission, would prepare a list of natives and native villages eligible to receive the benefits of the settlement and would settle boundary questions and disputes. It would consist of five members, at least two of whom must be natives, appointed by the president and paid by the federal government. The commission would function for a maximum of seven years.

Of the two remaining organizations, the Alaska Native Services and Development Corporation would distribute land to villages and individuals, allocate funds to the urban corporations, administer the "leasable mineral estate of lands granted under the bill" and the "lands granted for economic potential and development," and review and pass on village plans. The Alaskan Native Investment Corporation would "handle investments and business for profit activities." At first, the Services Corporation would get most of the money, but after twelve years, the Investment Corporation would get most. The Investment Corporation would have a twelve-man board of directors, with four members selected by the natives, five appointed by the president, and three members, who could not be natives, elected by the other nine. The Services Corporation would have an eighteen-man board, with four members appointed by the president and fourteen elected by the natives, one from each of the twelve regions and two urban corporations. After twelve years, an Alaska Native Foundation would be set up for "educational and charitable purposes" and would receive 10 per cent of the Investment Corporation's stock.

Native leaders' first reaction was extreme disappointment at the amount of land offered and considerable disappointment at the absence of provisions for regional corporations. Indications were that they might try to kill the bill, but they decided, at a meeting on April 20, simply to press for more land.

The Interior Committee was not eager to talk about the discussions that had produced the bill, and there was no immediate indication of what the "series of compromises" to which Senator Stevens referred had been. It was obvious, though, that the committee had made an effort to avoid taking much money from the federal treasury and setting any potentially inconvenient precedents, and that the state of Alaska had been given a lot more of the burden than it would have liked. Along with the bill, the committee produced a comparison between it and the other proposed native land-claims settlement bills, pointing out that in the bill finally approved, "The cost to the federal government is substantially offset by the reduction in federal appropriations resulting from the transfer of Bureau of Indian Affairs programs and services to the State of Alaska and to general health, education, and welfare programs available to all citizens. . . . The Bureau of Indian Affairs program in Alaska currently costs in excess of $31 million a year." The committee also pointed out that "the bulk" of the royalty payments would come "from moneys which would otherwise be paid to the State of Alaska."

The state would seem to have paid for the prerogative to select land almost anywhere in Alaska—and also for its dreadful bargaining position. Alaska has virtually no political strength in Congress and is so isolated that, in general, an injury to Alaska is not an injury to anyone else. Moreover, the state receives privileged treatment from the federal government on congressional sufferance, so Congressmen from other states have it over a barrel. Alaska receives 90 per cent of the revenue from all minerals taken from public land within its borders—more than twice as much as any other state in the union. A handful of Western states gets 37-1/2 per cent, and the others settle for 12-1/2 per cent. Alaska receives 90 per cent because when the state was created, its economic prospects were so bleak that Congress figured it needed all the help it could get. Now the situation has clearly changed. A state that contains the largest known oil reserve in the Western Hemisphere might have a hard time justifying its right to what is essentially federal charity. Senator Jackson and advocates of the natives' cause were very much aware of this. They reasoned that Alaska would lose a lot more by giving up its 90 per cent cut than by letting the natives take 2 per cent, and that if Alaska insisted too much on being tight-fisted with the natives, Congress might well decide to be a little less generous with Alaska. It's entirely possible that this reasoning was used to persuade Alaska's two senators to back the settlement bill that emerged from the Interior Committee on April 14.

Besides, the state won't have to give up any royalties at all from the land it actually owns. This provision must have eased the minds of senators not only from Alaska but also from other states that have large Indian populations with lingering grievances. Those senators must also have been pleased by the amount of land the bill would provide. Giving 1 per cent of the land to a group that comprises 20 per cent of the population is hardly an extravagant precedent. Nor does it infringe much on Alaska's prerogative to select land of its own.

Any bill that settled native land claims once and for all would have definite advantages for Alaska. Senator Jackson said that the current bill "provides the means for a lifting of the land freeze and for going forward with the economic development of the state. It means that the cloud on land titles in Alaska will have been removed. It means that state selections under the Statehood Act may proceed free from the threat of litigation and conflicting claims."

For the natives, Jackson said, "the bill provides opportunity for a better life for themselves and for their children: opportunity for full ownership of their homes and the lands they have used for years; opportunity for a better education; opportunity to live a longer, fuller life, free from hunger, disease, and want; opportunity to enter business and the professions, to generate employment and contribute to the tax base of local communities; and, most important, an opportunity for individual identity and pride."

Jackson said the bill did something for the federal government, too, in that it "presents the Congress with the chance to provide the native people of Alaska with justice, hope, and opportunity and to end 100 years of less than benevolent wardship." The bill means, he said, "that the last chapter in the sad history of the United States' relations with the Alaska Indian, Eskimo, and Aleut people will have a just, generous, and honorable closing."

In terms of money, the bill is certainly far and away the best the natives could reasonably have expected. Five hundred million dollars over twelve years is much closer to what they wanted than to the administration proposal of $500 million over twenty years. The royalties weren't granted in perpetuity, as the natives had demanded, but there had never been a chance of getting perpetual royalties, and there had been a danger of getting no royalties at all. The lack of regional corporations, or actually of any but the most cursory provision for regional differences among the natives, caused a problem right away. The North Slope people were particularly indignant about their share: 138,000 acres and $14 million. The North Slope representatives argued that they needed more land than people of other regions for subsistence hunting, that they had aboriginally used and occupied fifty-five million acres, and that the wealth from their fifty-five million acres would be providing most of the royalties on which the settlement was based; they therefore claimed they deserved a larger share. The Federation decided to ask for more land for the North Slope, and for at least eleven million acres over-all.

Land in general was, of course, an inevitable source of discontent. No informed native leader had really expected to get the forty million acres the Federation was asking for, but they had regarded the administration's proposal of 12.5 million as the minimum. The word is that Jackson himself pushed hard for more land. Obviously, other members of his committee felt they had a strong vested interest in keeping the amount of land small. And the native leaders had figured, well before April 14, that Jackson was too good a politician to let a bill leave his committee without unanimous support, which would, of course, reduce the likelihood that the bill would be attacked on the Senate floor.

The native leaders had said that they wouldn't passively accept a settlement they considered too small. Emil Notti had insisted that if the natives lost on one part of the settlement they should be able to make up their losses on another part; if they got less land than they wanted, for instance, they should get more money. Notti said in February, 1970, in Tacoma, Washington, that if the settlement wasn't satisfactory, the natives might go to the United Nations or the World Court to try to get status as a separate nation. The day after his speech at Tacoma, Notti admitted candidly that he had said what he did because "on the way down I was trying to figure out what I could say that would get in the papers," but he also insisted that he was at least "half serious." He was pretty sure that if the natives wanted to go to the U.N. or to the Hague, they could at least cause the United States a lot of international embarrassment. And a trip to the Hague wasn't the only possibility: the violent and non-violent demonstrations that some people foresaw if a settlement was delayed could easily have been attempted by a group of natives who thought the settlement was too small.

When the chips were down, though, the native leaders realized that the Interior Committee's proposal was the best they were going to get. Killing the bill would gain them nothing. The native leaders had little choice. Their moral arguments were their strongest weapons all along; if they had been reduced to quibbling about amounts, those arguments would have lost their effectiveness. And insisting that a billion-dollar settlement was too small certainly wouldn't have won the natives many friends.

More significant than what the natives might have done to protest the settlement is what they will do with the land and money the settlement will provide. Right now, the Federation leaders have no real plans for the money, no concrete idea of what the natives can do with it. The money itself will come in slowly, and a lot of it will probably be invested. It seems certain that some of it will be used for education; some schools may be built, and scholarships will almost surely be given to young natives who want to attend college. Money may also go to native entrepreneurs who need loans to start their own businesses. And money will probably be used to start or help start industries, either full-scale commercial ventures or village crafts. As things stand now, Emil Notti says, "The Bureau of Indian Affairs comes in, says 'This town needs a cannery,' and builds a cannery. Maybe that's not what the village needs, but the BIA is detached from the realities of Alaska." James Thomas, the Federation's former director of public relations, who has run businesses of his own, says that even white Alaskans tend to look too simplistically at the problems of economic development. When the Brookings Institution held a series of seminars in Alaska to find out how Alaskans thought the state should spend its windfall oil money, Thomas says the prevailing thought seemed to be, "Just plunk an industry down here and plunk one down there and everything will be peachy. It's not that simple," he says. "You can't get people to change their way of living overnight. If people fish, you should help them to be better fishermen." Notti says that not only should industries be set up to fit local needs and inclinations, but the primary function of new industries should be to provide jobs, not to make profits. "If a factory just breaks even but provides several jobs, it's doing well," he says.

Not all natives will be prepared to take advantage of college educations or factory jobs, though, and not all native villages will be in a position to profit from the establishment of local industry. Notti concedes that some villages probably can't be helped economically and that some natives will profit only marginally from even the largest conceivable settlement. But the settlement could make the transition to a modern white culture easier for the natives as a group, and if it includes enough land, it should enable the older people, those firmly rooted in the old cultures, to live out their lives in the old ways.

To say that there may be no economic future for some native villages and that the days of the traditional native culture are surely numbered is not to say that the villages will disappear in a year or two and the villagers will therefore lose their need for the surrounding land. The standard theory is that the villages are disappearing. The state government believes they are, and the oil industry believes they are, or at least that they will. Robert O. Anderson told me that he thinks the effect of economic development, oil-industry money in the pockets of some native villagers, will be an exodus from the villages and the disappearance of native culture.

This theory and its variations are entirely plausible, and as long-range projections they're almost certainly accurate, but for the short range, they are above all convenient. In December, 1969, at a Northwestern businessmen's conference on North Slope oil, I heard Frank Murkowski, then Alaska's Commissioner of Economic Development, give the audience a quick rundown on the land-claims issue. As Murkowski covered point after point, he read off three sets of figures: the federal government's, the state government's, and the natives'. On every point but one, the differences among the three sets of figures were pretty consistent, with the federal estimate midway between the natives' and the state's. On the question of how many native villages still existed, though, the state's figure was much lower than the other two. This does not reflect a difference in anthropological theory or in the ability to count. Any native village that doesn't legally exist is a native village that has no claim on the land. Any native village too small to be counted is a native village that can safely be ignored. Emil Notti told me that when state surveyors went into the village of Tanacross, they told the people there that a village needed twenty-five families in order to be recognized (that was the figure in a land-claims bill pending at the time), and Tanacross had only nineteen, so Tanacross was simply out of luck.

To the state, to the oil companies, and to anyone else with a large vested interest in using the Alaskan land, it probably seems ridiculous to have large areas tied up by moldering villages of nineteen families. A full tribe of Hollywood Indians in beads and feathers, or a band of traditional Eskimos with their dogs and igloos, a perfect little museum exhibit, might be a different story, But the natives who remain aren't in museums; they wear store-bought clothing, hunt with rifles—which frighten seals away more quickly than harpoons would and therefore make it more difficult to kill many seals from one group—and ride on snowmobiles—which break up caribou herds, but do make it possible to run fifty-mile traplines. And, inconveniently, their villages aren't disappearing. Arthur Hippler, an anthropologist at the University of Alaska's Institute of Social, Economic and Government Research, says that the villages show every sign of surviving for a long time. Even if large numbers of young people go off to the cities, he says, the birth rate is so very high (and the death rate, thanks to the very recent availability of modern medicine, is low enough) that the present populations will probably increase. Those little villages will last long enough to use—and to demand—their ancestral land. To speak nobly of doing justice to the natives is really to speak of giving large parcels of valuable land to small, ramshackle villages that have no justification for existing in a modern economy. If the natives have a right to the land, they have a right simply because they are there, and because years ago, white settlers and entrepreneurs lacked the foresight to cheat their ancestors out of it formally. Notti concedes that a settlement inevitably will speed acculturation. It would be nice if some people could go on living as the natives used to, he says, but "there's no turning back."

The settlement will undoubtedly give the natives more political power and more friends among the same Alaska Chamber of Commerce types who have lobbied hard against them. It will help to make some individual natives wealthy and powerful and will increase politicking within and among native groups. It may give natives a bit more to be proud of and may lift the natives as a group a bit above the rock-bottom of Alaskan society. Whatever other benefits may or may not accrue, it will almost surely be easier for bright, ambitious native kids to go to college and for native entrepreneurs to start their own businesses.

But settlement money won't make the natives filthy rich overnight any more than oil money will make the state rich. As a way of showing that despite the large figures involved, the natives' claims were really very modest, Ramsey Clark pointed out several times that $500 million distributed over nine years still wouldn't raise the natives' annual income to half that of white Alaskans. (By the most generous estimates, the average annual per-capita income of Alaskan natives is about $600; that of white Alaskans is at least $3,600.) Five hundred million dollars spread over twelve years plus another $500 million spread over a period that may be much longer certainly won't produce a millennium. It will, however, give the natives as a group something very substantial to build on. And although in moral terms it can hardly atone for the United States' usurpation and destruction of the natives' land or the wrecking of the natives' traditional cultures, it may help to make their future slightly less of a national disgrace than their present or their recent past.

Inevitably, the rhetoric surrounding the settlement dwells heavily on "justice," but is justice really the question when the original owners of 375 million acres ask for forty million acres and are given four? Is it just, either legally or morally, to pay those same people one billion dollars for the remaining 371 million acres, when 10-year leases to just 450,000 of those acres have already been sold for $900 million? Of course not. Obviously, neither the United States nor any other nation would seriously consider giving 375 million acres of land, including many military bases and the largest oil field in North America, to 60,000 Eskimos, Indians, and Aleuts. The native leaders and their attorneys recognized that, which is why they didn't even ask for the whole state. But if the natives had gotten forty million acres, there would still have been 335 million acres left for everyone else. The United States, which has ruled the land since 1867 and has never used most of it, could certainly have afforded that. The state of Alaska, which has the right to select 103 million acres of its own, exclusive of the land the natives receive, could have afforded it, too. But greed and vested interests made forty million acres seem much too large. The state wanted to be able to select the best land, the most useful locations, the richest drilling and mining sites. Congressmen from states with large Indian populations didn't want the United States to decide formally that Indians' aboriginal right to the land took precedence over whites' vested interests. So forty million acres was impossible, for reasons that have little to do with justice.

The proposed settlement isn't devoid of justice, but the justice involved consists partly of recognizing the injustice of taking the immense riches of a huge, wealthy land and leaving the inhabitants of that land in abject poverty. The settlement embodies that recognition. It is essentially an effort to do social justice to a downtrodden group in a wealthy country, not to do historical justice to a people whose claim to their land is still legally or morally valid.

As may be inevitable when one attempts to do justice of that kind to people who are essentially powerless, the proposed settlement has a little of the "white man's burden" about it. The natives wanted land; their white well-wishers thought money was more important than land. They'll get money. The natives insisted they could manage a large amount of money by themselves; their white supporters were afraid they couldn't. The investment corporation will be run by a majority of non-natives. This is not to suggest that the proposed settlement is somehow shabby. Even if one regards it as just a gesture, a billion-dollar gesture is pretty grand. But the rhetoric speaks of justice, and the history books may speak of justice, and if some Alaskan natives don't see it that way, it may be well to remember that their rhetoric had stressed justice of a different kind.

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