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On paper, the Section 29 requirements of the federal Agreement and Grant of Right-of-Way for the trans-Alaska oil pipeline and corresponding Alaska Native Utilization Agreement (ANUA) are spelled out in dry legalese. But in application, the tangible result poses a far-reaching human impact to the Alaska economy and its goal of cultural work force diversity. Today, companies like Anchorage-based Kakivik Asset Management are successfully meeting or exceeding the Section 29 requirements of 20 percent Alaska Native hire for Alyeska Pipeline Service Co. (APSC) major contractors.
Such figures add credence to the intended goal of a diverse labor force that realizes benefit through increased training, education and life opportunity.
A HISTORY IN OIL
It was in autumn 2004 that then-Secretary of Interior Gale Norton signed the latest renewal of ANUA-its fourth renewal since debuting in 1995. Through a separate agreement and separate renewal schedule, the ANUA flows from the original federal right-of-way agreement, which was obtained by trans-Alaska pipeline owners in 1974 as a renewable right-of-way to build and operate the pipeline across the federal and state lands. The right-of-way itself is good for 30 years and was renewed in January 2003.
The ANUA component affords recruitment, testing, training, placement, employment and job counseling for Alaska Natives, with the ultimate design to see Alaska Natives fill 20 percent of the combined full-time jobs of the pipeline operator and its contractors. When Norton signed the renewal, Alaska Natives constituted 447, or 20 percent, of total trans-Alaska oil pipeline system workers. That compared to only 8 percent in 1995. This year, as of the end of first quarter 2007, the Alyeska Alaska Native work force totaled 156 (20.8 percent) and the contractor work force totaled 220 (23.3 percent), according to the company.
The ANUA is again scheduled for renewal after December 2007. Confirming the renewal date, Alyeska's Alaska Native Program Manager Bonnie Jo Savland also notes, "Alyeska Pipeline Service Company and its contractors have met, or exceeded, the 20 percent overall work force goals as required by the ANUA since 2004." In terms of cumulative impact to the Alaska economy and employment landscape, Savland says the result has a long-term impact. "In my estimation, the impact to the Alaska economy by Section 29 and the ANUA is very important, both in terms of dollars spent and development of competitive salaries-careers-within the industry," she says. "Section 29 has created and maintained opportunities for Alaska Native peoples in oil and gas since 1974, and continues to be a highlight for careers of all peoples here in Alaska."
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MEETING THE MARK
Kakivik Asset Management LLC (www.kakivik.com) is an example of a contractor successfully meeting the mark for the Section 29 oil pipeline goal. Kakivik is contracted to perform the inspection, quality control, corrosion engineering and non-destructive testing on the pipeline. The company was established in 1999, employs more than 200 workers, and operates from its offices in Anchorage, Fairbanks and Valdez. It is co-owned by Bristol Bay Native Corp. (BBNC) and CH2M Hill Constructors Inc.; a subsidiary of construction, engineering and operations giant CH2M Hill.
Kakivik President and Chief Executive Officer Myrna Gardner, in a press release earlier this year, pointed to the company's 2006 fourth quarter report, which indicated 21 percent direct employment of Alaska Natives and 33 percent in development programs. The company also awarded $271,000 in education and training scholarship since 2003-directly in line with the training and advancement intent of Section 29.
"Technical and engineering jobs can not be filled by individuals without a proper educational background," Gardner told Alaska Business Monthly recently. "Obtaining the educational experience can be a daunting task for many people. The program combines education and paid internships so that, by the end of their training, an individual is already familiar with company and industry practices and procedures. The program is creating opportunities for Alaska Natives."
For Kakivik, the Alaska hire priority is long-standing. "Kakivik is two-thirds owned by the Bristol Bay Native Corp., one of the 13 Alaska Native corporations. Alaska Native hire has always been a priority at Kakivik," Gardner says. "The goal of the Section 29 program, as well as Kakivik, is to hire and train Alaska Natives for pipeline and oilfield related jobs. These jobs typically require a technical degree or extensive training, as well as on the job experience. There are very few entry-level jobs in nondestructive testing. Kakivik established an intensive training program that was available to all employees at no cost to them."
Gardner notes that classes in Radiation Safety, Radiography, Ultrasonics, and other nondestructive testing techniques are delivered on an annual basis. Employees have the opportunity to advance through second-level coursework. "Advanced classes, based on national certifications, such as those through the American Petroleum Institute (API), are available for experienced individuals with five or more years of experience," Gardner says.
"The corporate emphasis on training has made Kakivik's work force unique within the industry. The skills and abilities of the average Kakivik employee exceed those of the industry norm," according to Gardner. "For a company this size, we carry clout when it comes to certifications. In Alaska, Kakivik has more API-certified employees than Alyeska Pipeline Service Co., BP, or Conoco Phillips."
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That respect in the industry transfers to the workers who hold the technical positions. "Many Alaska Natives are now employed in jobs they previously were not qualified for," says Gardner. "With time, we will see more Alaska Natives moving into technical jobs because they possess the skill sets necessary to succeed in these positions. These are not token hires; they obtained the position because they acquired the necessary skills and demonstrated competency. Self-esteem and pride comes from achievement over time."
A corresponding benefit was relayed earlier by Kevin Hostler, Alyeska president and CEO, in a company newsletter last autumn. "Alyeska's commitment to Alaska Native hire reaches back to our beginnings as a company, and it is a commitment we will honor in the future ... Alyeska Pipeline, the State of Alaska and Alaska Natives are inextricably linked, but more important-it is simply the right thing to do," Hostler announced.
"We're proud to have employees representing all regions, from Barrow to Metlakatla.
"This is not just an Alyeska commitment. We expect our contractors to share our vision and encourage them to offer training, development and employment opportunities to help us reach our ANUA goals," according to Hostler. "This vision is so much bigger than just Alaska Natives and minority hire. Alyeska needs a work force that represents a wide variety of backgrounds and experiences. When we listen to a variety of voices, we do our job more effectively."
Today, Savland echoes that commitment. "I believe that Section 29 has given Alyeska the resources to move forward with a more diversified work force overall," she says. "With Section 29, Alyeska has recognized the commitment to the Alaska Native people-not only as an employer, but (also) that it is a good corporate citizen."
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EDUCATION AND TRAINING
Beyond the employment data are the lives of men and women who successfully sought employment and training through the program. To meet the training and education agreement for the advancement of Native hire, Alyeska coordinates several efforts to channel applicants through internship and employee-development programs to the possibility of ultimate full-time hire at Alyeska or its contractors.
"As the Alaska Native manager, I personally have seen many Alaska Native people grow from just starting technical school to working and being promoted within the company, which is just wonderful to see and be apart of," says Savland. "In addition, I have assisted in coaching and guiding others to their 'right' fit in the company. Alyeska has many managers that are excellent and willing to help grow our Alaska Native employees into managers and supervisors."
Alyeska works with the following universities to create educational Native people grow from just starting opportunity and to renew its work force into the future:
* University of Alaska Anchorage (UAA) Alaska Native Science and Engineering Program (ANSEP)-Alyeska contributes approximately $200,000 annually to the ANSEP (http://ansep.uaa.alaska. edu/) and uses it and the Summer Bridge program to recruit for current and future positions.
* University of Alaska Fairbanks (UAF)-The company funds two, full-ride Alaska Native master's degrees for a 5-year period, totaling $125,000.
* UAF-Alyeska provides $250,000 over a 5-year period for rural honors students.
* The company contributes to Alaska Pacific University and the Alaska Vocational Technical Center (AVTEC), as well as the rural teachers program, totaling $250,000 over a 5-year period.
"In addition, Alyeska has expanded its internship program to hire more than 22 summer/winter internships, which last for about 12 weeks across the company," Savland says. "This is a great opportunity for students to get to know Alyeska, and for the managers and supervisors to get to know the students and their capabilities."
CONTINUED PROSPECTS
The oil industry itself in Alaska remains healthy-a positive for the contractors whose existence relies on the continued global demand for Alaska's underground resource. With total oil revenue at $3.7 billion for 2006, as reported by the Alaska Department of Labor & Workforce Development, and projected to jump to $4.3 billion this year, oil continues to drive the Alaska economy-and its jobs. "High oil prices, and the growing consensus that they're likely to stay high, have also invigorated exploration activity and boosted industry employment," reported the economists at the department's Research and Analysis Section in the January issue of Economic Trends. "The state added about 1,000 oil and gas jobs in 2006 and the total number rose to levels not seen since the early 1990s."
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