2002 RDC Annual Meeting: Native Corporations:
The Future Face of Alaska's Economy

Barbara Donatelli, Executive Vice President,
Cook Inlet Region, Inc.

The Association of ANCSA Regional Corporation Presidents/CEOs produces a report that looks at the economic impact of Native corporations on Alaska. This year, the report focused on financial data for 23 Native regional and village corporations. Generally speaking, what the report shows is that Native corporations have matured a great deal since they were formed under the Alaska Native Claims Settlement Act of 1971.

This year's report was titled: "Native corporations: An Epic Story Benefiting Alaska." Calling Native corporation experience an epic story is not overstating the importance of Native corporations to Alaska's economy.

Native corporations provide jobs, revenue and commitment to the Alaska economy. In 2000, our sample of Native corporations had combined revenues of $2.5 billion.

The total equity in 2000 was $1.8 billion. The equity is almost twice the amount of the original ANCSA cash settlement of $962 million. The combined assets for the 23 corporations was $3.4 billion in 2000, according to their annual reports. This ranged from CIRI's $1.3 billion to Choggiung's $2 million.

The 23 corporations in this study together have an Alaska workforce of 10,600 employees. There were 3,400 Alaska Natives employed by the 23 corporations. The corporations had a combined in-state payroll of $350 million.

Of the 23 corporations chosen for this report, 13 were recognized by Alaska Business Monthly in the October issue as among the state's top 49 most successful Alaskan businesses.

Besides the direct economic impact of the corporations, Native people have begun a process of developing enduring institutions that provide important services to Alaska Natives. Among these are the Alaska Native Heritage Center, The CIRI Foundation with its endowment of nearly $50 million, and Cook Inlet Tribal Council.

And while we're seeing a trend in Alaska in which some of our biggest businesses in the state are now owned by companies based outside the state, Native corporations are firmly rooted in Alaska. They always have been and always will be. This is a very significant difference between Native corporations and other businesses.

Native non-profits are also an important factor in Alaska's economy. Their overall impact has yet to be measured, but it is quite significant.

I will also address some specific points about CIRI's resource development projects.

CIRI currently holds various oil and gas royalties in several oil and gas fields in Cook Inlet. A number of companies, including Marathon, Unocal, Phillips, Forrest Oil and Evergreen, have been exploring for new gas reserves in Cook Inlet. In 2001, Marathon brought on the Wolf Lake well, located within the Kenai National Wildlife Refuge as well as the Sterling Unit into production. While the results of other recent drilling projects are mixed, the Ninilchik Unit program has proven up new gas. We are confident that increased exploration and drilling will bring additional discoveries. With CIRI owning over 1.3 million acres of subsurface we expect to be involved in the oil and gas business for many years into the future.

We continue to cut beetle-killed timber in the Kenai Peninsula. To date, we have cut approximately 70,000 acres. We have replanted almost a million seedling trees with the help of a summer youth camp operated by CITC. We expect to be done cutting on the Kenai in two to three years.

One of the largest obstacles any resource development project faces is a changing regulatory playing field. Numerous outside and local groups oppose any development and have the legal resources and intelligence to use existing laws such as the Endangered Species Act to deploy and stymie any operation. Most Alaska companies do not have the staff or resources to assess and counter this opposition. The Resource Development Council is an effective voice and clearinghouse which has earned our support.

Alaska Natives have an underlying concern for the well-being of the entire group. This is good for Alaska as a whole because Native corporations are committed to this state and because they are concerned with business success today and into the very long-term future, as well.

Native corporations face unique challenges. We are concerned about cultural preservation as well as the bottom line. We are very active managers of our resources, and we believe in Alaska and its future. We are pleased to be a part of RDC, and we look toward a bright future for our corporations and Alaska as well.