‘Open for business’ must mean more

By Bob Shavelson

In Alaska, and more recently, in Homer, we frequently hear the mantra, we’re “open for business.” The intent, of course, is to present a business-friendly face to potential investors so our community can reap the promised benefits of jobs and contracts such businesses might bring. But “open for business” has to mean something more than simply open to any business. If not, we’ll attract corporations to Cook Inlet and Kachemak Bay with low standards and a profit-at-any-cost mentality. And local residents ultimately will bear the cost.
The best example in recent years has been Buccaneer Energy, the Australian company run by Texans that pushed its way into Cook Inlet chasing massive state subsidies. (Buccaneer’s chairman famously told an industry conference that Alaska is “about the closest thing you’re going to get to free money from a government in the world.”) 
This past week, Buccaneer announced it was plugging its West Eagle well east of Homer after drilling a dry hole. Now, with its stock valued at less than a penny and creditors circling, it’s a safe bet that Buccaneer’s days are limited — but not before it has cut an ugly swath across Cook Inlet. The Buccaneer experience presents strong arguments as to why we need to better scrutinize our potential business partners.
When Buccaneer brought its jack-up rig to the Homer dock, it promised it would be there less than a month. But it knew full well the rig had been dry-stacked in Asia for a decade, and needed substantial upgrades. That’s why it sat there a year, while Buccaneer scrambled to fix its mess. Yet Buccaneer persisted in the lie that these delays were unanticipated. While Homer reaped considerable moorage fees from the rig – and local welders and others found some good, temporary employment – the rig’s presence in the Kachemak Bay Critical Habitat Area has now prompted the Alaska Department of Fish and Game to rollback critical habitat protections across the entire state.
Buccaneer has always been a financial house of cards, with few assets and considerable debt. It survived by fooling investors (including the Alaska Industrial Development and Export Authority, which pumped roughly $25 million of our public dollars into the jack-up rig) into believing it had a viable business plan – based largely on huge subsidies offered by our state for exploration drilling. But Buccaneer managers had no clue about operating in Alaska, and they quickly over-extended themselves. In Upper Cook Inlet, they defaulted on contracts by failing to drill as promised at the Northwest Cook Inlet and Southern Cross Units; at West Eagle outside Homer, they also defaulted on their unit agreement, but the state has bent over backwards to let them cure their defects.
On the wetlands surrounding the Kenai River, Buccaneer blasted more than 800 shotholes – creating craters the size of pick-up trucks – when conducting seismic work without any permits. They apparently hadn’t heard about the king salmon crisis and the impacts of seismic blasting on juvenile fish. But our state and federal agencies didn’t lift a finger. Offshore, Buccaneer’s jack-up rig dumped tons of contaminated drilling muds into the some of the richest fish habitat in all of Cook Inlet off Anchor Point.
Perhaps most disturbingly, however, is that Buccaneer had zero respect for Cook Inlet residents. They plowed through local properties with seismic testing equipment in the central Peninsula without landowners’ consent, and they routinely failed to pay local businesses in Kenai and Homer on time – if at all. They are facing serious claims in court that they are stealing gas from CIRI’s adjacent leases at Kenai Loop. They ignored local residents who told them the road to the West Eagle prospect was too dangerous for heavy trucks carrying shifting cargos, and tragically, a young man lost his life. A few days after that horrible accident, a rig worker apparently lost a couple fingers at West Eagle, but that’s never been reported.
Throughout Buccaneer’s fiery trajectory across Cook Inlet, our local, state and federal governments provided little push-back to the company’s shoddy operations. The fact remains that our current permitting system has few tools to filter out the bottom-feeders. The current trend, through HB 77 and other policy changes, is to limit public participation even more.
So, instead of a full-throated cry of “open for business,” Alaskans and their local businesses would be better served with a due diligence review before any permits get issued for large projects that impact our local communities; something that would ask basic questions about a company’s financial wherewithal, its commitment to local people and jobs and its desire to protect the fish and water resources that make our home unique. Otherwise, we’ll just continue to see more pirate ships on the horizon.

Bob Shavelson is the Executive Director of Cook Inletkeeper, an Alaskan organization with offices in Anchorage and Homer which is dedicated to protecting clean water and wild salmon throughout the Cook Inlet watershed.

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Posted by on Feb 18th, 2014 and filed under Point of View. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

6 Responses for “‘Open for business’ must mean more”

  1. deb says:

    Real Businesses have to take risks. We all don’t have our funding from government grants and the kindness of others. Whatever you think of Buccaneer… they will continue to operate and take risks and look for oil and gas. That is what they do… and that is how your car is fueled and your home is heated and your computer is run… energy is a necessary component in our lives… yes even yours Bob!

  2. Cook Inletkeeper says:

    Deb –

    Yours is a common argument but it’s hollow when you consider the fossil fuel industry has played an active role preventing the development of alternatives – such as the world class tides and geothermal energy all around us – which is really how I’d prefer to run my car and heat my house.

    Thanks –


    • Howard Forbes says:

      Thanks Bob, I appreciate very much the important work being done at Cook Inlet Keeper. It seems to me that, had we spent, over the past 50yrs or so, even a small percentage of the time, energy and money on R&D for alternative energy, that we have spent subsidizing the carbon barons and their hired legislators, we would be there by know, and have plenty of clean jobs and a healthier planet for future generations to show for it. I mean we’ve landed on the moon, and been to just about every planet in our solar system! To continue prostituting our planet for, “jobs at any cost“, is the ultimate loss to humanity. There are good jobs and there are bad jobs. If the illicit drug and people trafficking corporations opened their wallets to our government as wide as the likes of the carbon barons , the Congressional Military Industrial Complex, tobacco industry, etc. does, we’d be selling crack and pimping out 10 year olds in our grade schools, in the name of JOBS, ie. “Bad Jobs“. I don’t begrudge anyone working in the oil patch etc. , everyone has to eat and I could very well be there myself, but we need to be moving forward, and replacing those jobs with jobs beneficial to our planet and the people who’s lives depend on it. We need to stop denying, and making excuses for the pollution of our environment and humanity, for the sake of “jobs at any cost”!

  3. DK1970 says:

    when it is possible to heat our homes and fuel our cars and fly planes and run computers and all from world class tides and geothermal energy all around us that will be a wonderful thing until then the reality of it is we need to be able to live. so while we can dream of the future and alternative energy we need to deal with the reality of life right now… natural gas is a clean component and easy to get and use now….

    • Howard Forbes says:

      I believe we have had the ability to clean up our energy act for sometime, but will never be allowed to develop it and get off the carbon tit as long as our government and most world government, are bought and controlled, by greedy corporations, such as the “carbon barons”, for whom too much will never be enough. Natural gas might well be a temporary step in the right direction, even though I’ve read that raw methane is many times more toxic than CO2 when released into the atmosphere. We need to get turned around and start pursuing alternative energy for real, not just lip service, but for real, instead of spending tax dollars fighting for toxic projects such as the XL Pipeline, which is set to pump mega quantities of some of the most toxic crap on the planet through a 174,000 square mile aquifer, “Ogallala Aquifer”, residing under 8 of our mid-western states. Anyone who still believes the, “it’ll be ok, just trust me”, crap dished out by the, for profit at any cost pimps, our illustrious Governor being one, eager to prostitute the health and welfare of this planet and the creatures living on it, surly must have “just” jumped off the shuttle from Pluto, ready to believe that smoking is good for you. I hope they start reading the headlines soon: “70 miles of the Dan River, North Carolina, poisoned by coal ash spill“; “Elk River, W.Virginia toxic leak leaves many sick and 300,000 without water“; “Governor of Alaska gives Carte Blanch to big oil in Alaska….etc. So if we want to continue our existence on this planet, in our present form, we had better stop dreaming, and start doing, or start thinking about cross breeding with the jellyfish.

  4. Dee says:

    I think the important message from this opinion piece has been overlooked. This Point of View is suggesting that we should be thoughtful about welcoming businesses to our community. Not blindly accept or reject any company or businesses, instead we should do our “due diligence” in reviewing business requests, practices, and permits, while investigating the “impact on our local communities”…”commitment to local people”… and “to protect the fish and water resources.” So let’s work together and be conscientious about who has access to our lands and communities so our grandchildren will be able to enjoy Kachemak Bay as we do.

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