Still the playground of polar bears, the lands and waters north of the Arctic Circle are home to some of the world’s largest fish stocks, massive oil and gas resources, and an abundance of rare minerals that will become more accessible if Arctic temperatures rise, as northern sea routes are the shortest distance between Europe and Asia (and North America).
The Arctic is increasingly a major focus of military, political, and industrial competition. The Russian bear has roared at neighboring Finland and Sweden, claimed Alaska as its own, and launched major Arctic oil and gas exploration and production and coal mining projects.
Meanwhile, the leader of the free world has thwarted America’s commitment to oil and gas production as a revenue source for Alaskans. How big a loss is that? How much damage is the loss of oil and gas and minerals revenues blocked by the Biden Administration doing to the Alaska economy?
Robbing Alaska for fifty years
In the wake of the 1973 Arab oil embargo, the Alaska Department of Natural Resources commissioned a study of the energy and minerals resources of the state and the impact of federal policies on their availability.
A DNR publication estimated that 231,887 square miles of onshore land and 394,881 square miles of the state’s continental shelf potentially contained economic deposits of oil and gas. The DNR estimated total petroleum resources at 76.1 billion barrels of oil and 440 trillion cubic feet of natural gas.
And that was with 1974 technology – long before fracking. Nor did that estimate include “significant” oil shale and tar sands potential of interior Alaska.
At that time, federal land use policies initiated by President Nixon “virtually eliminate(d) onshore oil development in Alaska” such that 96 percent of the onshore oil potential land in Alaska was off limits. Prospects for Alaskan energy workers rose under Trump’s pro-growth policies but were quickly dashed by President Biden.
Alaskans in the 1970s had believed the discovery and development of oil resources at Prudhoe Bay could be a catalyst to stimulate exploration of Alaskan coal and hard-mineral ore bodies. The Alaska DNR stated, “The resource base is well-established and the need for both the raw materials and the energy fuels are (sic) unquestioned.”
Coal was expected to become a major industry in Alaska, as coal resources were estimated at 2 trillion tons – more than the identified coal resource base of the entire Lower 48 states. But already, 82 percent of the total coal potential land was ineligible for leasing under federal rules. The report concluded, “If the present trend of Federal land administration continues in Alaska, its natural resource development will be chaotic.”
According to the American Association of Petroleum Geologists in 1990, however, that earlier estimate was quite low. The AAPG spoke of a 4-trillion-ton resource of coal with one-sixth the total sulfur of carboniferous U.S. coals and two-fifths that of Western U.S. coals.
Coal resources had not been developed because of their remote locations and lack of infrastructure, an inhospitable climate, and long distances to potential markets. It would take, they added, major, probably violent, changes in the world energy picture for these resources to become viable.
Well, son of a gun!
Russia has no qualms
Over in Putinville, the Russian government in 2018 presented a 5-year plan for Arctic development that included investment up to 5.5 trillion rubles by year 2024 and 13.5 trillion rubles by 2050. But times change – and may change again.
Today, Western sanctions against Russia are affecting many of the oligarch’s grandiose plans. Notably, state oil company Rosneft’s gigantic Arctic oil and gas project requires Western technology to build both infrastructure and ice-class tankers. Sanctions may also cripple Vostok Oil’s 13 gas and oil fields in the Taymyr tundra expected to produce over 100 million tons a year by 2030.
Also on Russia’s Arctic agenda is construction of several mines, including the Syradasaysky coal project in Taymyr. But that, too, requires Western technology at least for building ice-class bulk carriers for coal export. President Putin had predicted annual shipment of at least 80 million tons of goods on the Northern Sea Route by 2024, but those dreams, too, are out the window unless the halted industrial projects are resumed.
No more peaceful coexistence
Just this March, Nima Khorrami and Andreas Raspotnik of the Arctic Institute lamented that the Ukraine conflict would likely end 35 years of exceptional calm and collaborative security dynamics in the Arctic. They recalled Mikhail Gorbahev’s 1987 policy initiatives that sought to lower the level of military confrontation in the Arctic by facilitating cooperation among the eight Arctic nations: Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia, and the U.S.
They also posited that, as states display more sensitivity to climate change and its implications for national security and power projection, environmental research agendas in the Arctic are likely to become hyper-politicized. In the Arctic, they predicted, climate change will be discussed through the prisms of national security and strategic competition (well, not by the Biden folk) rather than as a transnational threat.
Now for the gut punch.
Is fight or flight America’s Arctic future?
If, as some scientists predict, Arctic ice and tundra are melting, Alaskan oil and gas and coal resources (and other minerals) will be easier to reach and develop. Once the Ukraine conflict is over, the Bear may again roar in the Siberian Arctic. But what about Alaska?
Under current U.S. policy, very little would change. The Alaska National Wildlife Reserve’s massive oil and gas deposits would continue to lie fallow, as would other oil and gas resources on federal lands. Alaska’s coal and other minerals would remain untouched. Alaska would increasingly become a financial burden on the U.S., one that an “enlightened” administration might just be willing to part with.
There is precedent, after all, for “returning” contested lands – notably Lyndon Johnson’s settlement with Mexico that returned 437 acres along the shifting watercourse of the Rio Grande.
Just this March Duma member Oleg Matveychev demanded as reparations for any losses Russia suffers in the Ukraine war “the return of all Russian properties ,,, seized [by] the United States.” This includes all of Alaska, a former Russian settlement in California, and the Antarctic. “We discovered it, so it belongs to us,” he chirped.
Would an American President take such a Russian demand seriously? Who knows?
Could President Biden be as generous with Alaskan oil and gas, coal, and minerals as he was initially with Nord Stream 2 (or as Hillary was with American uranium)? Surely that is a vodka-induced dream. But Afghanistan happened.
Should Russians regain control of Alaska, the good news is that Alaskans might have new jobs. The bad news: They would all be working for Putin.
Whether or not the Earth warms, Russians see the entire Arctic as the next energy frontier. Alaskans would love to get in on the act, and Americans would welcome the cheaper energy prices Alaskan production would bring. The minerals value alone could go a long way toward reducing America’s dreadful critical minerals imbalances.
Sadly, however, America’s energy and minerals policy is still being run by a long-dead white male. The guy who coined the phrase, “In wildness is the preservation of the world.”
This article originally appeared at Real Clear Energy