Sailing into the Arctic’s Future

RandallLuthi_webMarineLink | October 17, 2016 | Randall Luthi

Last month, a large cruise ship completed its inaugural cruise through the Northwest Passage. The historic journey brought nearly 1,700 passengers from Seward, Alaska, past the rugged wilderness and isolated villages of the Arctic, to the concrete jungle of New York City. Along the way, passengers and crew were treated to a stunning contrast of climates, geography and culture.

While understandable, concerns over passenger safety, wildlife disruptions and water pollution went unrealized during the historic cruise through the passage. A centuries-old navigational barrier has been successfully breached, presenting both challenges and opportunities for the natives of the Arctic. For them, the world has indeed become smaller, as receding ice now allows more face to face contact with outsiders from around the world. The challenge now is that these new opportunities are on terms determined by the Arctic natives, and that change in culture and technology come as a result of invitation rather than domination.

The same holds true for the energy industry, particularly offshore oil and natural gas. The Arctic has long held the potential for abundant energy development, which is supported by most Alaskan natives. However, like much of the Arctic, the Alaska OCS remains largely unexplored. Economic conditions and politics have literally put oil and natural gas exploration in the US Arctic on ice. As demonstrated by the recent cruise through the Northwest Passage, thawing ice is allowing for a new source of economic and social development through the tourism industry. Likewise, the economics of the energy industry are expected to improve, providing incentive for oil and natural gas explorers to prove the energy potential of the Arctic.
The question facing the energy industry is whether U.S. politics will allow for an energy thaw. It is important to point out that Arctic oil and natural gas exploration is not a nascent industry. In the Alaska Arctic, onshore development has occurred for decades, supplying a safe and consistent source of home-grown oil to consumers in the lower 48 states via the Trans-Alaska pipeline. Canada and Norway have been receiving oil and natural gas from offshore projects operating in the far north, and Russia has upped longstanding activity above the Arctic Circle by recently opening the Arctic gate marine terminal linking Russia’s Arctic-sourced crude oil to European and Asian markets.
There is no reason why similar progress isn’t possible within the U.S. Arctic. Energy demand will only increase in the coming decades, and by 2040 fossil fuels will still supply around 80 percent of our energy needs. An estimated 26 billion barrels of oil and 131 trillion cubic feet of natural gas lay offshore Alaska and could help meet this energy demand. Dozens of wells were safely drilled in the Beaufort and Chukchi Seas in the 1980s and 1990s using technology generations behind the modern technology used to safely drill a new well in the Chukchi Sea during the summer of 2015. Even though the hoped-for deposits were not discovered at that well, it is too early to rule out significant finds elsewhere in the area.
Read the full op-ed here.
Randall Luthi is the president of the National Ocean Industries Association.