At the head of Eshamy Lagoon, a stream courses over moss-coated boulders the size of small children. Sunlight illuminates the white gauze of water, sifting through a dense forest of tall spruce and hemlock trees draped in long strands of old man's beard. Beyond, in the still waters of the lagoon, like a field of sunflowers, dozens of orange lion's-mane jellyfish float near the surface.
All is quiet here in mid-June. In the long lagoon, and beyond in the bay, the only sound is the high-pitched cry of a bald eagle or the breath of wings as six Canada geese fly by, low across the water.
In a few weeks, boats of fishermen will arrive. Here, in the streams of Eshamy, more than half of Prince William Sound's red salmon are born. Sockeyes, pinks, silvers, cutthroat trout -- all thrive here, drawing commercial, sport and subsistence fishermen.
In 1989, however, Eshamy looked more like a floating city out of the movie ''Waterworld'' than a place where salmon swim. In that summer following the Exxon Valdez oil spill, the tranquil bay had become a staging area for a massive cleanup effort. Floating barracks for thousands of cleanup workers dominated the lagoon. Hundreds of boats zipped in and out. Miles of boom to catch oil sectioned off this wide bay into a series of holding areas -- people were allowed farther back into Eshamy Lagoon only if they had no oil on their boats.
This summer, all that floated in the wide mouth of the bay was a sea otter, a mother with a furry pup on her belly. At the turn of the century, when sea otters were hunted almost to extinction, a remnant population here, in southwestern Prince William Sound, became the nucleus for recolonization. Sea otters fanned out from here to reappear in all of Prince William Sound, the Copper River Delta and the Kenai Peninsula.
Now, however, sea otters here are few and far between. After the Exxon Valdez ran aground in March 1989, spewing more than 11 million gallons of crude oil into Prince William Sound, the sea otter became the wide-eyed poster child for thousands of animals killed by crude.
Eight years later, sea otters have yet to show any recovery in western Prince William Sound. Only the bald eagle population has officially recovered from the spill. The rest are either listed as ''recovering'' (including pink salmon, red salmon and common murres), ''not recovering'' (herring, sea otters, harbor seals) or ''recovery unknown'' (clams, river otters, common loons).
This summer, though, Eshamy Bay and other areas important for these animals gained a new degree of protection. The Exxon Valdez Oil Spill Trustee Council voted to spend $34 million to purchase 59,520 acres in southwestern Prince William Sound from the Chenega Corp., drawing upon the $900 million oil spill settlement fund.
About a fourth of the land (16,268 acres) will become a state marine park, and about a third (20,968 acres) will be added to Chugach National Forest. The trustees purchased ''conservation easements'' on the remaining 22,284 acres. Under the easements, the land will continue to be owned by Chenega, a village corporation established under the Alaska Native Claims Settlement Act, but will be jointly managed with the U.S. Forest Service.
The Chenega land purchases and conservation easements effectively prohibit large-scale human activity, especially logging. Close observers have called it the single most important step thus far toward restoring the area hardest hit by the oil spill.
''This is the first major habitat protection in Prince William Sound,'' says Molly McCammon, executive director of the Exxon Valdez Oil Spill Trustee Council. ''And it is on the western side that was most heavily oiled. There is no doubt that it has the most long-term impacts as well. It was ground zero of the spill.''
This area also encompasses lands that were at risk of being logged, but had yet to be clear-cut. It protects areas that are regarded as particularly important for salmon, sea otters, killer whales and many seabirds -- as well as among those most beloved by human visitors who spend time in the Sound.
''The Chenega lands are symbolically important,'' says David Grimes, a Cordova resident who has fished the waters of the Sound for two decades. ''The main wild salmon runs come in through the southwest capes, and the oil flowed out the same way.''
Five major bays indent the purchased land. From north to south, they are Eshamy, Granite, Paddy, Ewan and Jackpot. Also included are Chenega Island, Whale Bay, Fleming Island, the Pleiades Islands and the southern tip of Knight Island.
The land includes some of the most varied topography in the Sound, ranging from rolling tundra to old-growth Sitka spruce and hemlock forest, steep granite cliffs, icefields and tidewater glaciers. Lakes, streams and waterfalls abound. Eshamy Bay and Jackpot Bay together contain 22 salmon streams, and are considered the most valuable salmon-producing areas in western Prince William Sound.
The purchase extends along 224 miles of coastline, including critical habitat for all the animals affected by the oil spill. They find shelter and food in the convoluted shoreline of bays and lagoons and in the deep recesses of the rain forest.
Prince William Sound receives more than 100 inches of rain and snow a year, and it marks the northernmost reach of the North American rain forest. However, the tree line is much lower and growth much slower than in Southeast Alaska, because of colder temperatures and less sunlight, and forests around the Sound are slower to recover from logging.
Ironically, no large-scale clear-cutting occurred in the Sound until after the spill. Now, more than 50,000 acres have been logged, primarily on Chugach Corp. lands on Montague Island and on Eyak and Tatitlek corporation lands in eastern Prince William Sound. The Chenega habitat acquisition is the only one in Prince William Sound to be completed before clear-cutting took place.
''The initial reason to sell was to protect the natural resources, which is essentially our trees,'' says Chuck Totemoff, president of Chenega Corp. It wasn't an easy decision for the 87 shareholders of Chenega. To some, selling their land was like selling their future. But they didn't want to log the land and damage the wildlife habitat, either. In the end, 82 percent voted for the sale.
''Sooner or later, we would be in a position where we would have to log our timber,'' Totemoff explained. In 1981, Chenega Corp. joined the Koncor timber company in a logging agreement, then bought back the timber rights from Koncor in 1988. But those rights were only temporary and were set to run out in 40 years. And then, Totemoff says, ''the residual rights would return to Koncor, and we could have done nothing about it. So it would be logged either by Chenega Corp. out of economic need, or in 40-some years by Koncor, in the course of business as usual.''
During the last few years, Chenega Corp. had two proposals from Koncor to begin actively logging the very lands that were purchased.
''We turned them down because we were negotiating with the Trustee Council,'' Totemoff says.
Late one evening this summer, Roger Stowell walked up from Paddy Bay to the south end of Eshamy Lake, which stretches more than five miles north to the stream that pours into Eshamy Lagoon. Stowell has served as caretaker for Chenega Corp. and has operated a fishing lodge out of Paddy Bay for 18 years. The lake was so calm and clear that a pyramid-shaped rock was perfectly reflected. The only movement was a water bug, the only sound the descending trill of a bald eagle.
He's never caught a fish at this end of the lake, Stowell says. He's had luck only at the north end near a log jam -- where he once felt as if something were watching him, and when he looked down, he saw two river otters gazing at him from under the logs.
Gail Blundell, a biologist with the University of Alaska Fairbanks, spends her summers in the Sound studying river otters. She says river otters need a forest habitat undiminished by clear-cuts or large-scale logging.
''The regular logging practice of buffers along the stream and shoreline is missing the boat as far as protecting river otters goes,'' she says. ''They do need areas in away from shore. I've seen them up on a ridge above Paddy Bay. Protection from logging is the best thing we can do for river otters.''
Even marine animals, such as the mother sea otter with her pup in Eshamy Bay, benefit from forest protection, according to biologists. During fall and winter, sea otters need areas that are slightly inland, like the mouths of streams and lagoons, says Chuck Monnett, who, with Lisa Rotterman, has studied sea otters in the Sound for over a decade.
''The inflow of salt water creates large concentrations of mussels, which are excellent prey for sea otters,'' he says. These inland feeding areas are especially important for just-weaned pups and females during a critical time of year. With the sedimentation and increased freshwater temperature from logging, he says, ''habitats are literally destroyed.''
Protecting the land may be the best way to help all of the wildlife and the place recover from the oil spill. In fact, a main justification for the out-of-court settlement in 1991, instead of years of litigation, was to protect undamaged but threatened coastal habitat in the spill region. When the Trustee Council was determining how to use the $900 million natural-resource settlement money, McCammon says, ''habitat acquisition was by far the number-one restoration activity recommended by the public.'' The spill region's commercial fishermen, the recreationists, the Native community and people throughout the nation agreed.
''If restoration is healing an injured patient, then we look at the first two lines of the Hippocratic oath,'' Grimes says. ''First, do no more harm, and second, trust in nature's own healing abilities.''
At the mouth of Paddy Bay, heading out into Dangerous Passage, Stowell points out a bald eagle nest on a small island.
''This is the 13th year they've used that nest,'' he says. The tiny head of a chick peers out from over the huge, mossy nest in the top of a big, old spruce. It looks like too much nest for the chick, but in two months, the baby eagle will outgrow the nest.
In every bay, at every turn, bald eagles abound here. They fly high overhead, call among the trees, perch at headlands. Other animals aren't seen here nearly as often since the oil spill -- including the marbled murrelet.
Already listed as threatened along most of the West Coast, marbled murrelets suffered significant losses to oil. Since most of the world's marbled murrelet population breeds in coastal Alaska, protecting its habitat here is important to its recovery. These small, mottled-brown seabirds, rounded with short wings, usually are seen along convoluted shorelines, where they flip under the water when people approach.
''They prefer large, old-growth forests, particularly near protected waters,'' says Kathy Kuletz, a biologist with the U.S. Fish and Wildlife Service. ''They nest in old-growth trees with horizontal pads of moss. It takes a couple hundred years to develop that cover on trees.
''Habitat acquisition is a direct way of helping them,'' Kuletz says. ''And since they aren't colonial, they need large contiguous stands of forests. You can't just buy an island and say you're protecting them.''
In Ewan Bay, between Paddy and Jackpot bays, a visitor is greeted by a reversing waterfall. As the tide goes out, water flows from Ewan Lagoon into Ewan Bay, at times falling as much as 10 feet. Water continues to seep out of the lagoon below the brink of the waterfall, so when the tide changes and begins refilling the bay, the waterfall reverses. Water is pushed back into the lagoon through an entrance just wide enough to allow a kayak or small skiff to glide in, then later pour back out with the outgoing tide.
This small, oval lagoon is a haven for wildlife. At low tide in fall and winter, Monnett says, the lagoon at Ewan Bay is full of sea otters -- just-weaned young and females. He's seen tracks of river otters and other mammals as well.
''Ewan (Bay) just pulls them in,'' he says. ''It has huge mats of mussels, more than a foot thick. The water is shallow, so it's good for the just-weaned pups. They just crunch down on the mussels like popcorn.''
Female otters, too, like to rest and feed in the calm lagoon, and haul out on the rocks by the waterfall. It's an oasis from wild winter storms.
At the head of Jackpot Bay, the only human signs in mid-June are those in a research camp: barrels covered with blue tarp, a couple of wall tents, a line out to a small inflatable. In a few weeks, the salmon will return, and with them people. Stowell will be busy then, taking sportfishermen to Jackpot.
''Most of the people that come out here are basically fish killers,'' he says. ''Before they come, they want to know how many fish they can catch, how many they can keep, what size they are. Then they get here and look around and say, wow!''
Stowell laughs. He says the visitors he brings always are surprised by the beauty. ''Suddenly, fishing becomes secondary. After all, they can buy fish. ''
Jackpot Bay includes five distinctive arms, one a series of holes like a string of beads. The longest, widest arm on the south side is dominated by a waterfall that thunders down steps of granite. Set in the middle of the bay is Jackpot Island, home to the largest colony of pigeon guillemots in southwestern Prince William Sound.
Researchers staying at the camp in Jackpot Bay are studying how the oil spill has affected these seabirds. Now, they say, the biggest threat to the pigeon guillemots -- and other area seabirds -- might be the new road the state plans to build to Whittier. If the number of visitors to Prince William Sound grows from the present 100,000 a year to the projected 1.4 million a year within 20 years, then protecting the wilderness nature of southwestern Sound will become extremely difficult.
''It's one of the last remaining wild places,'' says Eleanor Huffines of the National Outdoor Leadership School. NOLS has been running courses in southwestern Prince William Sound since 1971, preferring it in part because it's the ''most remote of anywhere in the Sound.''
''You don't have to rush across Dangerous Passage because a tour boat is coming,'' she says. ''It's much more magical because it's less impacted.''
''The Sound has gotten so popular,'' says Lois Salmonson, who operates Prince William Sound Kayak Center with her husband, Perry, and has kayaked in the Sound for 18 years. ''We see a lot of people come in on the train, a lot of kayakers going out, and I wonder, do they know how to treat the Sound?''
Across Dangerous Passage from Jackpot, at the southern end of Chenega Island, stands the remains of old Chenega village. The historical site was not sold. Along with the conservation easement on the southern quarter of Chenega Island, it remains off limits to the public. Here, on a sunlit hill overlooking Whale Bay, is all that was left after tsunamis caused by the 1964 earthquake destroyed the village, killing 23 people.
''It's still in the minds of the Chenega people,'' Totemoff says.
Every year Chenegans hold a memorial service at the old village. And every year, they find more of this place vandalized. People have spray-painted buildings, shot bullet holes through windows and walls, and even chipped away at the cement base of a bronze plaque that lists the names of the dead.
Survivors of the earthquake later re-established Chenega Bay village on Evans Island, south of Knight Island. Today, they're still cleaning oil off beaches near their home. This summer, a crew used a new technology to dislodge petroleum from beneath rocks at nearby Sleepy Bay. One Chenega Bay resident raised a rock and there beneath it was rainbow puddle of oil, still seeping out in its Jacob's coat of colors. In 1989, oil stood a foot deep on some of the beaches in this area -- including Chenega Island and the outer beaches of Dangerous Passage. The vast bulk of the 11 million gallons of oil spilled was absorbed by Green Island, Montague Island and Knight Island.
Leaving Chenega Island and heading past the small group of islands called the Pleiades toward the southern tip of Knight Island, we see the tall, black dorsal fin of an orca break the surface. A pod quickly surrounded us, moving closer, then farther away.
Southwestern Prince William Sound is frequented by more whales than any other part of the Sound. It's the year-round home to many pods of killer whales, or orcas, among them the AB pod, a particularly friendly group that lost 13 of its 36 family members and produced no young in the two years following the oil spill. We probably were being visited by one of these resident pods.
Stowell radioed Craig Matkin of the North Gulf Oceanic Society. Matkin studies the killer whales of Prince William Sound, and was out the day before looking for them.
''They're all around our boat,'' Stowell told him. ''Maybe 10 or 12 of them.'' One orca surfaced nearby, and we could hear it expel a stream of air.
''Thanks,'' Matkin responded. ''We're on our way over there now.''
Later, Matkin explains that resident killer whales feed primarily on silver salmon. ''There aren't that many silver runs in the Sound, so Jackpot and Eshamy runs are important. When you protect salmon, you protect the food of killer whales.''
Matkin has spent time studying orcas and commercial fishing in the Sound since 1975, when he worked in Eshamy Bay for the Alaska Department of Fish and Game. That first summer, he was kayaking in Eshamy when he saw several orcas moving toward him at high speed. They swam past him, then came back. An entire pod crowded around him. Then they all got still and quiet, Matkin says. Whales floated around him, resting, and he was right in their midst -- for hours, resting with a pod of orcas.
''I fell in love with it back then,'' he says, ''and I've been going there ever since.''
It's moments like those that bring other people to Prince William Sound.
''We've seen humpback whales from the beach,'' Lois Salmonson says. ''We'd be near the shore cooking dinner, and all of a sudden we'd hear this hum right next to shore. It would be a humpback, rising up out of the water, sleeping.''
''It's one of my favorite places,'' she says.
Federal biologist Kathy Kuletz studies marbled murrelets by finding their nests at dawn. During watches, she sits high up in trees, waiting for the birds to return from the sea.
''Although seldom seen,'' she writes, ''these dawn flights can be spectacular as marbled murrelets chase each other and dive into the forest canopy with speed and agility . . . using river corridors and ridge tops as flyways.'' Flying murrelets, she says, have been clocked at 100 mph.
At the northern end of Chenega Island is a small stream. Even on a bright, sunny day, just a few yards into the cover of trees, the vegetation is so dense that only slight shafts of sunlight sift through, bouncing off rocks, glinting off leaves. Up in the arms of tall spruce and hemlock are thick, wide platforms of moss, just the kind marbled murrelets might use for nests. One trunk measures more than two arm-spans in circumference, so it could be 500 years old. The stream makes a passageway through the forest not just on ground level, but above as well, so that this might be a flyway. This might be where, at dawn, marbled murrelets fly 100 mph, whizzing to their nests and then out to fish again, weaving forest and sea.
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