Afognak Economics -- Alaska Natives Wrestle With Island's Future

AFOGNAK ISLAND, Alaska - During more than a decade as a forester for Weyerhaeuser in Southeast Asia, Jim Carmichael directed the cutting of a lot of trees.

Now he's about to cut a lot more on this wilderness island just north of Kodiak - unless the federal or state governments step in and buy some of the forest land with money paid by Exxon in compensation for the disastrous 11-million-gallon oil spill from its tanker, the Exxon Valdez, 3 1/2 years ago.

This is no ordinary timberland dispute.

The Sitka spruce on Afognak is ecologically unique. So is the political backdrop, a dense mesh of local, Alaska native, environmental, state and national political interests interwoven with those of a new bureaucracy established to administer the $900 million oil-spill settlement.

Carmichael is general manager of the Afognak Joint Venture, a consortium of Alaska native corporations that own about a third of the land on the island.

The land is a major piece of their patrimony. They look to it for income to pay dividends to their 4,000 to 5,000 shareholders and to finance scholarships for native students.

"We don't want to cut it," said Pete Olsen, a native who has lived in the area all his life. "But we need the money."

The Afognak Joint Venture is conducting a high-profile public relations and lobbying campaign to make its case to the public and Congress. A slick four-color brochure touts the island's qualities and recently three members of the U.S. House Interior Committee staff were given a guided tour.

Carmichael, who first visited Kodiak as a consultant 10 years ago and has lived here since 1985, said some small income could be realized from the island's abundant recreational potential, and the native groups are exploring such developments. But land sales or clear-cutting are the only realistic ways to produce the kind of income the corporations need, he said.

"My reaction initially was a little appalled," he said. "I didn't want to cut it. But now I'm really comfortable with it because of the lack of alternatives."

Afognak measures roughly 35 by 45 miles, about the size of Maui, and if it had better weather, condos probably would have replaced the Sitka spruce forests long ago.

But Afognak's cool, wet climate has protected it from tourists, if not from the chainsaw.

The island's steep mountains, dense forests and rolling grasslands are home to scores of Kodiak bears - the world's largest land carnivores; to more than 1,000 Roosevelt elk (the descendants of a group transplanted from Washington's Olympic Peninsula at the turn of the century); and some 160 species of birds.

Wild salmon and steelhead race up rocky, fast-running streams. Some 500 miles of intricately indented coastline provides scores of coves and sheltered bays that are home to seals and sea otters. Whales leap and spout in the deep water offshore.

Afognak is inhabited by only a handful of people, most of whom work at the two logging camps on the island. Native corporations are already doing some logging, though it is on a small scale compared with what they plan if they are unable to work out a land-sale agreement with the federal or state governments.

The Afognak Joint Venture is owned 45 percent each by the Afognak Native Corp. and Koniag, a regional native corporation, and 10 percent by a half-dozen village corporations. The corporations were established under terms of the Alaska Native Claims Settlement Act of 1972.

The joint venture owns about 180,000 acres on Afognak and is particularly interested in selling off 125,000 acres in two parcels that are contiguous to the federally managed Kodiak National Wildlife Refuge. Based on similar timber sales in Alaska, Carmichael estimates those areas are worth about $900 an acre, or $112 million.

Not all the land is forest. The Afognak Joint Venture has made it clear that it wants to sell a mix of forested and unforested acreage and retain some of both for itself.

This attempt to strike what Carmichael views as a balance has not been universally popular.

"All the loggers think we've turned traitor and the preservationists think we're evil loggers," he says. "They're both right."

What makes the Afognak spruce forests unique is that they are the northernmost extension of the Northwest's great old-growth forests, and they are now gradually overrunning the largely treeless grassland ecosystem common to the Kodiak area and the Aleutian Islands.

No one is quite sure how the Sitka spruce got here. Its nearest native area is Southeastern Alaska, some 500 miles of stormy water away. And unlike the Southeast, where Sitka spruce grows mixed with fir and hemlock, the Afognak forests are "monotype," containing only spruce trees.

Here in the colder, windier environment, Afognak spruce does not achieve the towering height the same trees reach in Southeastern Alaska and the Northwest. As a result, the trees lack the prized clear, straight-grained wood for which the species is known. Instead, the wood is full of knots.

But because it is old-growth wood - Carmichael says most of the harvestable stands are 150 to 400 years old - it is tight-grained, strong and makes good construction-grade lumber. Some is milled for local use, but most is shipped out as raw logs to Japan, Korea, Taiwan and China.

Afognak's unique qualities were recognized by the federal government 100 years ago, when President Benjamin Harrison gave it protected status as the Afognak Forest and Fish Culture Reserve, one of the first such set-asides in the nation. The island lost its protection in the complex politics and land-swapping involved in passage of the 1980 lands bill.

Settlement of the Exxon Valdez case presented two new opportunities to protect the island. The court settlement of the civil suit against Exxon mandated that the $900 million in restitution funds are to be used in ways that will help the state recover from the spill. In addition, Exxon paid a $100 million criminal-negligence penalty, which was divided evenly between the state and federal governments.

Numerous fishing, native, conservation and other groups support using some of the money to buy lands, such as those offered by the Afognak Joint Venture, for parks, preserves and other uses to replace resources damaged or destroyed by the oil spill.

The rationale is that such purchases would immediately pump dollars into small communities that need them. For example, the Afognak Native Corporation says it would use funds from land sales to establish a permanent fund to pay dividends to its shareholders and to diversify its business activities beyond timber.

But so far, land-purchase efforts have run afoul of partisan politics.

State Rep. Cliff Davidson, D-Kodiak, shepherded a bill through this year's legislative session that would have appropriated $37 million of the state's share of the criminal penalty for land purchases on Afognak and elsewhere.

Gov. Walter Hickel, a Republican who has long been philosophically opposed to governments "locking up" land, vetoed the bill - a move that brought sharp reaction in places like Kodiak.

"The veto was ill-advised, unfortunate and disappointing - and from a political perspective - irrational," Davidson said.

The six-member panel established to administer the $900 million civil settlement so far has shown more interest in establishing its staff and doling out money to government agencies for more studies than in land purchases.

That leaves the House version of the pending federal energy bill, which includes a section mandating that the $50 million federal share of the Exxon criminal penalty be spent entirely on land purchases. Its fate is uncertain.

House Interior Committee Chairman George Miller, D-Calif., backs the provision, but it is opposed by the U.S. Justice Department on the ground that it would interfere with administration of the Exxon civil settlement.

"That's a bogus argument," said Tim Mahoney, a Washington, D.C., lobbyist for the Afognak Joint Venture, but one that worries some Republicans in an election year.

A House-Senate conference committee will meet this month to draft final energy legislation, and Mahoney expects the House land-purchase provision to be a bargaining chip as a compromise is fashioned.

"I expect it to happen in the crudest way," Mahoney said. "In some ways we're like a cork on the wave."