Alaska Finds a Soul Mate in Oil Cartel : Economy: State confers with OPEC on ideas for petroleum development.

“When OPEC whispers, Alaska listens,” said Alaska state Rep. Larry Baker at a cocktail party on Wednesday, 10 stories above a city that is so dependent on petroleum even the cab drivers know the daily price of oil by heart.

Baker is explaining the apparent oddity of a conference of academics and oilmen jointly sponsored by a small state university and the Organization of Petroleum Exporting Countries, the international oil cartel that once attempted to bring America to its economic knees.

The conference, which ended Friday, comes at a crucial time for the Alaskan oil industry and the state itself. Its government is dependent on the flow of oil, which is beginning to slow. Its most lucrative bet for future drilling, the Arctic National Wildlife Refuge, is currently out of bounds to development. Rebuffed by Congress, Alaska wants to become a world citizen in the oil industry.

The academics at the University of Alaska, Anchorage, hope this powwow is the first of what they insist on calling a “permanent dialogue” among Alaska, the OPEC nations, the former Soviet Union and the federal government far away in Washington.

The idea is a nonpolitical forum to help solve common energy problems and foster development. On Friday came the first concrete proposal: to use bonds with rates indexed to the price of oil as a means to finance joint development ventures between Alaska and any interested OPEC nations.

Alaska Gov. Walter Hickel, a man of larger vision and owner of the best hotel in town, sees more. Anchorage “could become the new Geneva of the Northern Hemisphere,” he proclaims.

OPEC’s secretary general, Subroto (who like many Indonesians uses only one name), brought an entourage of researchers to Alaska to assess Arctic National Wildlife Refuge’s status and to preach a familiar gospel to kindred spirits.

“You in Alaska and we in OPEC, where oil is the lifeblood of our economies, must do all in our power to defend an industry . . . which is now under siege, ostensibly in the name of the environment,” Subroto exhorted over lunch Thursday.

This is sweet music to Alaskan ears. Alaska has lately been shouting, not whispering, about its narrowing economic prospects. But no one--particularly in Washington during an election year--has been paying much attention. So the Alaskans are increasingly seeking a separate role in the larger pond of the world economy.

Anchorage as a world conference city, as many here will seriously point out, is geographically convenient, being fairly near the Russian and Kazakhstani oil fields, oil-consuming Japan, oil-producing Mexico and--just a hop over the North Pole--Europe.

And Alaskans could use any boost to their long-term economy. A third of the state’s jobs and as much as 47% of its economy are tied directly to oil. And, as the attending politicians and state bureaucrats well know, 85% of state government revenue comes from petroleum.

Some people argue that Alaska was only able to fund a state government after oil was discovered at Cook Inlet in the 1950s. When far larger reserves were found on Alaska’s North Slope in 1968, the state became a producer of worldwide significance.

Now the flow from the North Slope, almost a quarter-century later, is in decline. And Alaska has been unable to persuade Congress to open the Arctic National Wildlife Refuge to oil exploration.

“Our last chance is the coastal plain of (the refuge),” said John D. McClellan, vice president for international business development for the Arctic Slope Regional Corp.

Arctic Slope represents Alaska’s Native American corporations and has become the state’s third largest business in what McClellan describes as “essentially a vertically integrated oil company.” Arctic Slope owns one refinery and is building another, but does not produce its own oil.

“Some day we hope to be a producer like the OPEC nations,” McClellan says, placing much of that optimism on the dim prospect of a congressional change of heart.

“I hope that once the election is over, ANWR can be opened up,” he said.

Even Alaska’s environmentalists and fishermen are hard-pressed to argue against development.

Riki Ott, president of the Oil Reform Alliance, a coalition of environmentalists and fishing groups, said over the din of a Greenpeace protest outside the conference that she was “encouraged” that the OPEC and Alaskan speakers were calling for practical ways for oil producers to reach accommodation with environmentalists. She, too, worries about the state’s future.

“I want a forum,” Ott said, “where we sit down and try to make it work. . . . We’d better get some plans in place for a sustainable future before we open the arctic refuge. We only seem to plan when there’s a crisis.”

Meanwhile, the Bush Administration, which supports oil exploration in the Arctic National Wildlife Refuge, has provided little encouragement to proponents of tapping into the arctic refuge.

“We will continue to look for new openings to raise the (refuge) issue,” said John J. Easton, acting assistant secretary for domestic and international energy policy at the Department of Energy. But he also admitted the obvious, that the “once-robust exploratory drilling activity here in Alaska . . . is now but a ghost of the past.”

Long before the breakup of the Soviet Union, Alaska was looking west across the Bering Strait for opportunity. Alaska Airlines now offers regular service to Siberia, and many Alaskan companies have tried to deal with the new businesses that have sprung up there. But with political and economic conditions there far from settled, these have largely been exercises in futility. Even at this conference, the Russians have yet to show up.

“With the Russians, you never know if they will come--and they never call,” one university staffer sighed.

The Alaskans are doing better with the voluble Subroto, who pointedly noted that OPEC represents not only such resource-rich nations as Saudi Arabia, but also countries like his own Indonesia. And like Alaska itself.