In the shadow of a giant, snowcapped volcano, 19 oil copanies have installed the world's largest floating rig to drill test holes deep under the turquoise waters of Cook Inlet.
The enterprise represents the fartherist reach of the nation's scramble for new energy sources. Only in the last two years has the federal government begun leasing in the remote offshore shelf of Alaska.
Despite the trans-Alaskan oil pipeline, this immense state remains largely undeveloped wilderness. The idea of an offshore oil industry here has sparked nationwide controversy.
Cook Inlet, a scenic waterway more than twice the size of the Chesapeake Bay, is one of the country's most productive fisheries, yielding, among other things, king crabs that grace the tables of expensive Washington restaurants.
In two months, the Interior Department will offer oil companies about 850,000 underwater acres in the lower inlet that could produce up to 2.6 billion barrels of oil and 3.3 trillion cubic feet of gas over the next few decades.
The upcoming lease sale has triggered an intense struggle in the small villages along the inlet, 200 miles south of Anchorage. Fishermen, natives and and conservationists are pitted against oil coampanies, local businessmen and the federal government.
For the people who live here it is no abstract environment issue. English Bay, a village of 75 Indians with no roads, no stores and only one telephone, has filed suit against the Interior Department to stop the leasing.
For 3,000 years natives here have lived off the inlet's abundant seafood and, even today, they accept virtually no welfare aid. Oil spills, they say, could wipe out their food supply while the onshore industrialization that accompanies offshore driling would result in "cultural extinction."
Local and national conservation groups and fishermen from Homer, a picturesque town of 1,800 have joined the suit. "We have a feeling of impending doom," said Larry Hollinshead, who in a 45-foot boat, fishes for salmon in summer, herring in spring, crab and shrimp in winter.
Already vessel traffic has increased in preparation for offshore drilling and he says he has lost $1,000 worth of shrimp pots, tangled in the wake of supply boats. Other fishermen claim losses up to $30,000 in gear. Oil spills would be "probable" from off-shore production, according to Interior's environmental impact statement. The effects, minimal on open seas, would be disastrous in Cook Inlet, leasing opponents say.
"Of all the offshore areas leased in the U.S., this is the only one in an enclosed area," said Loren Flagg, a biologist with the state fish and game department. "I'm not against oil development. I'm only against it in sensitive tidal areas where fish spawn.With our 30-foot tides the oil would be on shore in an hour."
Flagg predicted that a minor spill in spring, would destroy billions of shellfish larvae, possibly wiping out the catch for a year. A large spill could kill birds, sea otters, seals, porpoises, sea lions and several endangered whales, he said.
Ed Hoffman, head of the federal offshore leasing office in Alaska, says such concerns are genuine. "The waters off Alaska are productive, there's no question about that. The impacts are greater in Alaska than they would be in New Jersey or Virginia because our coastline is not industralized."
[WORD ILLEGIBLES] demand is growing and the United States is increasingly dependent on Arab oil. But not exploring lover Cook Inlet. Hoffman said, "the nation would forego the possibility of substantial crude oil being produced from American soil."
These small Alaskan communities seem Davids against the federal Goliath, but they are seasoned veterans of the energy-environment crossfire. In 1973 the state leased 93,000 acres in the lower inlet, a few miles off Homer. Fishermen and conservationists formed the Kachemak Bay Defense Fund, named after the estuary which surrounds Homer, and filed suit.
The issue flared in the 1974 governor's race. After Republican Jay Hammond, who opposed the leases was elected, the legislature agreed to buy back $25 million in leases from Shell, Chevron and Texaco.
Though bouyed by their success against the state, the Kachemak Bay activists still face opposition in their own villages. In Homer, the mayor is on their side, but City Manager Larry Farnen favors offshore development. "The natives are just setting the stage so they can collect a lot of money if there is an oil spill," Farnen said. "The fishermen want [the bay to be] their own private reserve."
Farnen welcomes the jobs, the industry and the 25 per cent annual population growth projected for Homer after leasing. "I want to see the progress," he said. "I want to see our port developed. We'll have better homes, better streets, and better incomes."
As for the spills, Farnen said the Companies are careful and cleanup technology is available. "I'm not saying there won't be spills," he added. "But Alaska can't expect peopel in Texas and Louisiana to take all the dirt while we stay clean." Homer insurance agent Milt Turkington, like many oldtimersQ, feels the oil opponents "are people who arrived here three and four years ago because they didn't agree with what was happening in the Lower 48. They want to close the gate behind them."
Despite years of production in the more urbanized upper Cook Inlet, there has never been a spill, he said. "And is Homer's beauty spoiled if we get 10,000 people? No. We'll still be able to look at the mountains across the bay."
Cook Inlet isn't the first, nor will it be the last battle over offshore oil development in Alaska, which has two-thirds of the nation's outer continental shelf. Traditional sites off southern California and in the Gulf of Mexico won't satisfy the nation's voracious energy appetite. President Carter's energy policy is committed to exploring "frontier" areas - ones which have never been drilled before.
Last year, despite a lawsuit by the state and opposition from the Council on Environmental Quality and the Environmental Protection Agency, Interior leased about a million acres in the rough waters of the Gulf of Alaska.
Although Interior Secretary Cecil D. Andrus delayed the Ford administration's accelerated schedule, he is likely to approve the leasing of vast tracts off Kodak Island and in the Bering Sea - both productive fisheries - and in the Beaufort Sea, which the 10-month ice pack presents new technological problems.