OPINION: Dunleavy and DNR should hold Shell accountable to prove Alaska is truly 'open for business'

Early in the morning following his Nov. 2018 Election Day victory, then-Gov.-elect Mike Dunleavy took the stage at a breakfast put on by the Alaska Miners Association during the trade group’s annual convention. It wasn’t something he had to do, especially on a couple hours of sleep (at most). There would be plenty of time to tout his grand vision for our state in the coming days and weeks.

Still, there he was, in front of a bleary-eyed crowd that included some of the biggest players in all of the state’s primary industries. Despite it being a mining event, they were all there to hear what he had in store for Alaska’s future. And they all seemed enamored and suddenly energetic when Dunleavy started his remarks by declaring, “Alaska’s open for business.”

While a global pandemic and ever-shifting federal policy have challenged some parts of the governor’s economic agenda, Alaska has also seen numerous success stories on his watch. Despite the best efforts of some, development is underway at two of the largest North Slope oil fields in decades, Pikka and Willow, providing thousands of construction jobs in the coming years. Alaska tourism and the international cargo trade at Ted Stevens Anchorage International Airport have recently enjoyed record-breaking years, and there are others. But there are opportunities for more.

For instance, Shell has held highly prospective state leases on the North Slope since 2012 while doing little to nothing to actually explore and work toward the development of the potential oil resources. Rather than hold the major oil company accountable for its lack of action, as state law requires, Alaska Department of Natural Resources officials have enabled Shell to warehouse those publicly owned resources and ignore the promises the company made to DNR that it would take meaningful steps toward developing the West Harrison Bay Unit it controls.

Simply put, Shell has not explored West Harrison Bay and likely never will. In fact, it appears that Shell never actually intended to. When publicly discussing its application with DNR to form the unit, Shell noted in 2020 that, “we ultimately plan to divest (West Harrison Bay) after seeking a partner and transferring operatorship.” But since forming the unit nearly four years ago, Shell also has not found a partner to step in and drill.

Ultimately, Shell has neither sold nor advanced West Harrison Bay toward production in any meaningful way in over a decade.

Gov. Dunleavy often espouses that the Alaska Constitution mandates the development of the state’s resources to meet important state funding requirements, like education, and DNR is the agency tasked with carrying out that mandate in the public’s interest.

Under the Dunleavy administration, DNR has repeatedly demanded smaller and independent oil and gas operators work their leases and make substantive progress towards production — going as far as threatening to find operators in default of their unit agreements or revoke leases small companies at times have invested millions of dollars in.

However, the same rules seemingly do not apply to multinational oil companies and their lobbyists. The West Harrison Bay Unit sits entirely on state acreage adjacent to the National Petroleum Reserve-Alaska, and many geologists believe it is in a prime spot to continue the oil trend that is fueling, so to speak, the nearby Willow and Pikka projects. There is no doubt the state is dire in need of the tax and royalty revenue production from West Harrison Bay could generate if DNR would hold Shell accountable for its lack of action.

For Gov. Dunleavy to fulfill his day-after-Election Day promise, he should direct leadership in DNR — Commissioner John Boyle works for him, after all — to demand Shell get moving or give back the leases so someone else can.

More of the status quo would only reinforce the notion that Alaska is “open for business” to only a select few.

Matthew Perdew is a retired and disabled veteran, serial entrepreneur, and Alaska resident of 20-plus years.

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