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EDITOR'S NOTE: The hurdles to a successful business in Bush Alaska are numerous: tiny markets, remote geography, harsh weather, massive fuel and transportation costs. But some do thrive. One study looked to uncover what it takes for businesses to succeed in rural Alaska. Here's what they found.

On an island 30 miles off Alaska's southwest coast, skilled hands create traditional Native artwork that travels the globe -- as far away as Hong Kong and Germany.

Traditionally, the Cup'ik residents of Mekoryuk -- the only remaining village on Nunivak Island -- have fished, guided musk ox hunts and processed reindeer meat.

But thanks to the Internet and an enterprising Native artist who moved to the Bering Sea village to raise his children in a traditional lifestyle, some residents are also finding employment at the village's newest cottage industry, Oscar's Originals.

The company is a cooperative run by John Oscar in a refurbished formerly abandoned building. He and his employees use ivory, driftwood, reindeer hair and other materials to assemble shadow boxes, masks and other artwork for sale -- both retail and wholesale -- on the Web.

The community's reaction to the art studio, opened in 2003 and expanded in 2006, has been gratifying, he said. Some local, regional and statewide Native organizations provided funds to help with start-up, supplies and training, and Oscar also invested tens of thousands from his savings in the studio.

"Even if I had only one (employee) in here, they would be very supportive," he said of the village's leaders. "My workers spend money in the local store. Even a small amount of money multiplies quite a bit," he said.

Recently, the village was struck with steep increases in fuel prices and Oscar had to downsize the cooperative -- at least temporarily -- to two part-time workers. "Usually I have five," he said, during a recent phone call from the village.

"I've put my heart and soul into the community. I'm thinking of ways to survive in these times of hardship, nationwide," he said.

In a recent study of the viability of rural businesses, researchers with the University of Alaska's Institute for Social and Economic Research said they determined that community support plays a big factor in the success of businesses in rural Alaska.

Jane Angvik, an Anchorage researcher who led the in-depth interviews with Oscar and some other entrepreneurs, said she was awed by poignant, hopeful stories she heard from around the state.

"They are so ... heartfelt in their belief in strengthening their villages and the culture of their communities," she said. The interviews made her more confident that villages will be able to survive "mind-numbingly" high energy prices and other economic disruptions, she said.

HOONAH'S PORT OF CALL

Angvik also saw community cohesion at work in Hoonah, where the local Native corporation rallied its shareholders in support of a major cruise-ship destination -- a former cannery near the Southeast village that was transformed into a tourist fairground of sorts, with shops, a cannery museum, a salmon bake, wildlife tours and a mile-long zip line from the top of a nearby mountain.

The village corporation's shareholders, who suffered loss of employment after a meltdown of Hoonah's timber and commercial fishing-based economy, got training to run the tourist shops and excursions, she said.

But Angvik also found that lack of cohesion has been undermining at least one village's economic prospects.

WIND WARS

The place is St. Paul Island in the Pribilof islands. Though the local village corporation and the city government both say they want to provide cheaper wind energy to St. Paul ratepayers, they disagree about the best way to do it. The disagreement has stalled any projects to link residents and businesses to the cheaper electricity.

The village corporation installed three wind turbines on the island that power the St. Paul airport complex. It also built wind turbines in other Western Alaska villages, which are providing cheaper power in those places too.

The company, TDX Corp., wants to buy the city of St. Paul's diesel-powered plant and retrofit it to run off the wind turbines. But the city government would rather keep the plant -- a revenue generator for the city -- and purchase wind power from TDX, according to officials with the city and the corporation.

The two entities paid a consultant several years ago to study the problem and counsel them on the best way to proceed. But when the report was published, they still disagreed about what to do. "Unfortunately, I think we read (the study) two different ways," said Ron Philemonoff, president of TDX.

To date, the city still prefers a power sales agreement instead of a buyout. The company has declined to do that because, Philemonoff said, selling electricity to the city will not result in a significant savings to ratepayers, many of whom are also shareholders in the Native corporation. "Our ultimate goal was to bring economic development and cheap energy to our shareholders," he said.

He said the city and TDX met last week and TDX will formalize its offer to purchase the city's power plant.

City manager Linda Snow said she hopes the company and the city can forge an agreement.

Linking St. Paul ratepayers to the wind project will result in cheaper electricity, she said. "It would be one of the factors to encourage economic development. It just makes good sense."

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

The series

MONDAY: Study on what works for rural Alaska businesses.

TUESDAY: Finding success amid military contamination in Galena.

TODAY: Nunivak Island rallies around Native art cooperative.

THURSDAY: Too much business too quickly hurts Prince of Wales Island logging company.

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