Later this spring, barges of heavy equipment will pull away from a launch on Alaska’s road system and begin a journey up the Yukon River.
More than 100 miles upstream, a tributary, Birch Creek, branches off.
The equipment’s destination is along that creek, on remote property owned by Alaska Native corporations in a huge basin called the Yukon Flats.
There, an oil company will set up a specially designed rig to drill the basin’s first-ever deep wells, which the landowners hope could lead to the discovery of the state’s next big oil field.
If found, petroleum could create well-paying jobs for Yukon watershed residents and generate big dividend payments for the 20,500 shareholders of Doyon, the for-profit Native corporation for Alaska’s Interior region.
Doyon’s leaders describe the drilling effort as a rare opportunity — one that could deliver a lucrative resource sought from its lands for decades, though never produced.
But the campaign has engendered a broad backlash from tribal governments in the region.
Much of the opposition stems from the track record of the business that will be doing the drilling: Hilcorp, the large, privately held oil company founded by a Texas billionaire, Jeff Hildebrand.
Hilcorp has substantially increased its holdings in Alaska in recent years and now operates the massive Prudhoe Bay field on the state’s North Slope, where it partners with major firms like ExxonMobil and ConocoPhillips.
But it also has a history of leaks and accidents, prompting fears from Yukon watershed residents about the risks of its new drilling program.
“We’ve seen it so many times, that these big corporations come in and they take and take. They say they’re going to reinvest and it never happens,” said Rhonda Pitka, chief of the tribal government in Beaver, a Yukon River village some 20 miles downstream of the Birch Creek confluence. “What will we end up with at the end of all this?”
Whether the Yukon Flats will support commercial fossil fuel production remains highly uncertain, and likely won’t be known for years. More exploratory drilling will almost certainly be needed to better define a deposit even if Hilcorp finds evidence of petroleum this summer, and the infrastructure to extract and move it to market would require an array of environmental permits.
Even at this early stage, opponents are aggressively fighting the drilling plans. At a meeting last month, Interior Alaska’s consortium of 42 tribal governments, Tanana Chiefs Conference, approved a resolution against oil development by Hilcorp in the Yukon Flats, saying it’s too risky for the “ecologically and culturally significant region.”
But leaders of Birch Creek, the tiny Indigenous community closest to the drilling sites, have endorsed the effort, saying it could produce desperately needed jobs.
Birch Creek’s Native village corporation also owns some of the land where the drilling will take place, and like Doyon, it stands to benefit from a discovery.
“Without the economic activity this exploration project could create, Birch Creek and the other Yukon Flats villages may simply cease to exist, and our way of life will be lost forever,” the community’s tribal government said in a 2020 resolution endorsing the program. Birch Creek’s population is now just 30 people, and its school closed more than two decades ago because it had too few students, according to the state of Alaska.
The support from Birch Creek has given Doyon and Hilcorp the “social license to operate in that area,” Doyon’s chief executive, Aaron Schutt, said in an interview.
If oil is found, Doyon’s agreements with Hilcorp would require the company to hire shareholders and local residents, he added.
Schutt said that Doyon’s early leaders, a half-century ago, chose to claim land in the Yukon Flats specifically because of its potential to yield oil and gas.
“We can’t re-select. We can’t undo those deals that were done by our leaders 50 years ago,” he said. “We’re stuck with the hand we were dealt from 1972 to 1975. And we have to balance all of these various constituencies and opportunities and concerns, and do the best job that we can.”
Birch Creek leaders, through a Doyon official, declined to comment. Hilcorp released its own prepared statement saying it’s “excited to work with Doyon and community stakeholders to advance this meaningful exploration project in the Yukon Flats.”
“Together, we are developing a tailored program to responsibly evaluate the region’s energy and resource potential,” said spokesman Matt Shuckerow.
A geologic enigma
The Yukon Flats basin covers more than 10,000 square miles, bounded by the Brooks Range mountains to the north and the White Mountains to the south. The Yukon River sweeps across from east to west, and the trans-Alaska pipeline snakes over the land from north to south.
The basin began forming at least 60 million years ago, according to Marwan Wartes, a veteran geologist with the Alaska Department of Natural Resources.
It’s still sinking today, making it difficult to study. Often, petroleum-rich regions of the state have experienced uplift, producing rocky outcroppings that give glimpses of their geologic histories — but those clues aren’t present in the flats, Wartes said.
Experts suspect that the area contains sedimentary deposits that could produce natural gas, or even oil. But no one has drilled deep wells to confirm those theories, so the flats’ subsurface remains something of a geologic enigma.
“When I look at the whole map of Alaska, it always catches my eye, and I always am frustrated that we know so little about it — because it’s mostly burying itself,” Wartes said. “It is a mystery, and I think most geologists would agree to that.”
Today, the region, home to the Yukon Flats National Wildlife Refuge, is important habitat for as many as 2 million migratory ducks, as well as several species of fish. Its salmon and moose have long sustained the region’s Native people, who now live primarily in seven Indigenous villages within or near the refuge.
For nearly two centuries, the Yukon Flats have also been the source of global commodities — starting in the mid-1800s with furs, and continuing with the 1893 discovery of gold in Birch Creek.
The region has never produced oil; nearly all of Alaska’s petroleum comes from the other side of the Brooks Range, on the North Slope.
But Doyon and oil companies have long eyed the flats for its potential, dating back to the years after the 1971 Alaska Native Claims Settlement Act. That federal legislation terminated Indigenous land claims in the state by transferring some 10% of Alaska’s land to newly formed, Native-owned corporations — which, with certain limitations, could choose the land that they wanted.
Doyon, owned by Alaska Natives with ties to the Interior region, became the state’s largest private landowner.
Working at the time with smaller Indigenous-owned corporations connected to the region’s villages, Schutt said, Doyon selected additional land in the Yukon Flats, hoping that it would yield petroleum. The idea was to capture areas with oil potential while also leaving room for the region’s residents to continue their subsistence-based lifestyles.
Doyon formalized that strategy, Schutt said, in agreements with five village corporations. A 1974 agreement with Beaver’s Indigenous-owned corporation refers to the “potential for oil and gas” in the area around the village, “the development of which would benefit all of the shareholders of Doyon.”
Pitka, Beaver’s current tribal chief, said that oil was not the driving force behind the village’s participation in the Doyon agreement.
“The village corporations picked land for subsistence,” Pitka said. “People were living on the land.”
In the years after the land deals, major oil companies prospected for oil in the Yukon Flats; Exxon even signed an exploration agreement with Doyon. But Exxon pulled out of the region after its major 1989 oil spill near Valdez.
Studies continued, however.
Doyon contractors have collected hundreds of sediment and soil samples throughout the basin. The corporation has also conducted seismic testing, and it collaborated with federal and state agencies that drilled a research well to a moderate depth in 2004. The United States Geological Survey has estimated that the Yukon Flats contain 173 million barrels of oil, with a smaller chance of as much as 600 million barrels.
“This has been a basin that’s been on everyone’s radar as having potential for a long, long time,” said Wartes.
Hilcorp’s involvement began in 2019, when it signed an exploration agreement with Doyon covering some 2,500 square miles of the Native corporation’s land.
Since then, Hilcorp has flown airborne surveys to gather geologic data, and it’s also drilled more than a dozen shallow test wells. Last year, it narrowed its focus, signing oil and gas leases with Doyon that cover 94 square miles near Birch Creek.
This kind of remote oil and gas exploration work, known as wildcatting, is not Hilcorp’s specialty; the company is better known for buying aging oil fields and making them more productive.
“They must see something that really captivates them, because there’s no shortage of oil on the North Slope,” said Phil Wight, an energy and environmental historian at the University of Alaska Fairbanks.
Even Schutt, the Doyon chief executive, said he’s not sure exactly what’s driving Hilcorp’s interest.
“I actually don’t know the answer to that,” he said. “It’s still kind of a mystery.”
A big upside for Doyon
This summer, Hilcorp plans to drill two exploration wells on separate sites.
The company has not publicly announced its plans, but some details have trickled into public view through documents submitted to the state. Hilcorp’s drilling effort requires an array of permits, among them a contingency plan that includes how the company would respond to a blowout.
The locations of the company’s two planned wells are 10 and 15 miles, respectively, from the Yukon River and the village of Birch Creek, according to the permitting documents. The sites will be supported by a worker camp staffed 24 hours a day.
The area is along a lower branch of Birch Creek and is accessible only by barge, helicopter or skiff, depending on water levels. Schutt said the work will leave a light footprint.
“If there’s no further development, those lands will be indistinguishable from the lands next door in 10 years,” he said.
Opponents of the plan have focused their efforts on a pending Hilcorp request to state land managers to pump water from Birch Creek and a nearby lake for its drilling operation.
The company says it will take a maximum of half of one cubic foot per second from the creek, which it describes as 0.05% of its flow. Ten different tribal groups have objected, according to their comment letters released by regulators in response to a Northern Journal public records request.
Allowing Hilcorp’s proposed withdrawal “would degrade water quality and jeopardize the ecological integrity of Birch Creek,” said one comment letter, from the Yukon River Inter-Tribal Watershed Council.
“We, the Indigenous Tribes and First Nations from the headwaters to the mouth of the Yukon River, urge the department to join us and put all of our future generations first,” the letter said.
If Hilcorp finds oil, the discovery would likely be just the start of more intense environmental battles to come.
Given the large cost of building a new oil field, construction would only make financial sense if it contained at least 200 million barrels of oil, according to Doyon’s estimates. Tying a development into the trans-Alaska pipeline would entail crossing federal land and require environmental permits that would face stiff opposition.
But for Doyon, the effort is worthwhile because of its big upside, according to Schutt. The company is already invested in the oil and gas industry; it owns a drilling subsidiary that maintains some of the largest rigs on the North Slope.
A new field in the Yukon Flats could produce a “massive royalty check” each year, much of which would be shared with Alaska’s other Native corporations under federal law, according to Schutt. Doyon’s subsidiaries would be in line for contracts to work on the development, he added, and Yukon Flats villages likely could save money by tapping into newly available natural gas for heating.
“It would economically support the whole subregion and Doyon for generations,” he said. “Those are the types of opportunities that don’t come along very often for us.”
Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
