Alaska Officials Step Toward Wider Oil And Gas Exploration On State Land Near Yukon River

By James Brooks

(Alaska Beacon) -- The Alaska Department of Natural Resources has tentatively decided that oil and gas exploration should be allowed on state land in the vicinity of the Yukon River.

In a public notice published March 4, the agency said its determination for the Yukon Flats “comports with constitutional direction to encourage the development of the state’s resources, and with the legislature’s direction that it is in the state’s interest to develop the state’s oil and gas resources.”

The flats are a large area of wetlands and lowlands at the confluence of the Yukon and Porcupine rivers in Interior Alaska. 

DNR’s preliminary approval is subject to a public notice process, and public comments on the agency’s position are due by April 6. They may be emailed to dog.bif@alaska.gov.

This month’s public notice comes as the oil and gas firm Hilcorp enters another year of operations in the area with Doyon Ltd., the regional Alaska Native Corp. for Interior Alaska. 

Last summer, Hilcorp drilled for oil on land leased from Doyon near the village of Birch Creek, south of Fort Yukon. Doyon’s subsidiary, Doyon Drilling, conducted much of the work.

As that drilling took place, Hilcorp applied for permission to conduct oil and gas exploration on state land nearby.

Most of the surrounding territory is within the Yukon Flats National Wildlife Refuge, an area prized for its waterfowl nesting and breeding grounds. 

The only state land within the requested area is on “subsurface waters,” riverbeds and lake beds controlled by the state under federal law and a 2019 U.S. Supreme Court decision.

Hilcorp’s permit application is on hold until the state completes the regulatory process covered by this month’s public notice.

The Yukon Flats are in what the state has colorfully labeled “Middle Earth” — a vast swath of Alaska between the North Slope and Cook Inlet that has no active oil and gas production and hasn’t been thoroughly surveyed for oil and gas.

The determination signed this month by Derek Nottingham, director of the Division of Oil and Gas, states that “the land within the Yukon Flats determination area has unknown oil and gas potential and there is limited access to existing oil and gas infrastructure in much of the region. Although oil and gas exploration has occurred in the past, technological advancements may facilitate more effective and efficient exploration. Further, the state would benefit from geological and geophysical data that may result from potential exploration.”

If the state does determine that oil and gas exploration is appropriate in the area, it would then have to go through a separate process to determine whether Hilcorp in particular should be given permission to explore.

A similar process took place in the Susitna River valley last year.

State permission in the Yukon Flats doesn’t automatically mean that a company could plop a drilling rig in the middle of the Yukon River. That kind of development plan would be subject to many different levels of regulation by several state and federal agencies.

Instead, the biggest impact is likely to be in cases where subsurface rights are split between the state and Native corporations. If an underground oil pool is beneath land with split ownership, ownership of that pool could be complicated.

An explorer working from corporate land wouldn’t have to worry about ownership issues if it also holds a permit from the state.

In Hilcorp’s case, the Birch Creek area being leased from Doyon is dotted with lakes whose bottoms could be state-owned.

Hilcorp has not yet announced its plans for the summer 2026 season. Last year, it had plans to drill two exploration wells but ended up drilling only one, according to data published by the Alaska Oil and Gas Conservation Commission. 

That well stopped work in October, but significant amounts of equipment, including a drill rig, remain on site at Birch Creek. 

Sarah Obed, a spokeswoman for Doyon, said by email that the company will be sharing an update with shareholders soon and is grateful for local residents’ collaboration on the project.

“As always, Hilcorp and Doyon will prioritize shareholder employment when opportunities arise and will continue to work closely with partners and our communities through this upcoming season and beyond,” she wrote by email.