Yukonomist: Back to the future on Arctic oil and gas development in Alaska and Russia

Senator Ted Stevens wore Incredible Hulk ties when pushing ANWR to show everyone how serious he was

While oil and gas development in the Yukon is frozen solid, news last week reminded us this isn’t the case with our circumpolar neighbours. Announcements from Alaska and Russia breathed new life into decades-old projects that many environmentalists and market observers wrote off years ago.

Julian Gignac’s article in last month’s Yukon News reported on plans for seismic exploration this winter in the 1002 area of Alaska’s Arctic National Wildlife Refuge (ANWR). If the U.S. Bureau of Land Management approves, Inova AHV-IV Commander vibrator vehicles weighing 30,000 kilograms will soon be trundling across the landscape supported by a small army of snowcats, tractors, 150-person sleigh camps and so on.

The 1002 area is a strip covering about 610,000 hectares. That’s about eight per cent of ANWR’s land, or double the size of the country of Luxembourg.

Rough estimates from the U.S. Geological Survey suggest it could hold between 5.7 and 16 billion barrels of oil. The upper end of that range is more than a trillion dollars worth of oil, while even the lower end would be a major boost to Alaska’s battered economy.

Supporters hope it could keep the two-million-barrel-per-day Alaska pipeline full for decades. They have been pushing for development almost since the ink was dry on the 1980 law that created the 1002 area and kept open the possibility it might be drilled some day.

The application was made by SAExploration, a global exploration company, and two aboriginal development corporations. One of the latter is Arctic Slope Regional Corporation, which is based in Barrow, Alaska and represents 13,000 Inupiaq shareholders.

Arctic Slope claims to be the biggest Alaska-owned company. It owns almost five million acres of land on Alaska’s North Slope, including potentially rich oil, gas and base metal resources.

ANWR is also home to the cross-border Porcupine caribou herd and its critical calving grounds. The Vuntut Gwitchin First Nation, Yukon and Canadian governments are dead set against the seismic exploration proposal and oil production in any part of ANWR.

However, Canadians don’t vote for the U.S. Senate or House of Representatives. And Alaska’s congressional delegation is firmly in favour of drilling in ANWR. Representative Don Young told CNN he had voted to open ANWR to drilling more than a dozen times over his political career in Washington, which dates back to the 1970s.

Alaska Senator Lisa Murkowski remembers her father, then the senator, trying to convince President Bill Clinton not to veto pro-drilling legislation in the 1990s. Former Senator Ted Stevens famously wore Incredible Hulk ties when pushing ANWR in Washington, to remind everyone how serious he was.

In late 2017, as the ANWR exploration clauses moved forward as part of President Donald Trump’s tax cuts bill, Murkowski put on her own Incredible Hulk earrings in homage to Stevens. The legislation she helped push through envisages multiple oil rounds of oil leases in the 1002 area over the next few years.

We don’t know if oil production will ever actually happen in ANWR. Global energy markets, a future Democratic president, or other factors could derail the hopes of Murkowski and Arctic Slope.

Meanwhile, the Russians are pushing Arctic development that is, if anything, even more bold than Alaska’s.

Not only is the massive Yamal liquefied natural gas (LNG) project on the Arctic coast ramping up, but Russia plans massive investments in Arctic railways to stimulate further development.

The first phase of the Yamal LNG plant opened around the time the law enabling ANWR drilling passed in Washington. Phase 1 is producing 5.5 million tonnes of LNG per year, complete with ice-class tankers to get the gas to market through the Arctic Ocean. The first shipments have already arrived in China, which owns a stake in the project. By 2021, Yamal LNG plans to triple its capacity to 16.5 million tonnes per year.

To put that in perspective, if Yamal was a separate country and exported that much gas in 2017, it would have been fifth in global market share behind Nigeria.

Now Russia has announced plans to spend over US$100 billion over the next five years on a massive Arctic infrastructure plan, including a railway connecting isolated regions of Yamal to existing rail lines. Demand for steel, cement and railcars is supposed to boost the national economy, and enable a massive expansion of Arctic resource development. The Putin government has enlisted some of Russia’s top oligarchs to share the costs and the benefits.

To get an idea of the rough scale of the project, picture a $20-30 billion LNG plant and tanker port on the Yukon’s northern coast, connected by rail to Inuvik.

The origins of the Yamal railway project go back even farther than ANWR and the Carter administration. It revives a concept originally launched by Stalin with forced labour from the gulags. An estimated 300,000 prisoners finished several hundred kilometres of the project in the 1950s, suffering severely as they struggled with massive river crossings and permafrost. By the time Stalin’s successors cancelled the project, it was known as the Railway of Death.

Now, the Russian government hopes that buoyant global energy prices and modern technology will enable the project to succeed. Moscow views the project—and its ability to boost cash-rich energy exports—as a critical part of its response to Western sanctions.

As with ANWR oil production, time will tell whether the Yamal railway project actually happens or not. The financial, engineering and environmental challenges are significant.

Yukoners can only sit back and watch these projects. Our environmentalists will be appalled by the carbon emissions and drilling in pristine wilderness areas, while our economic developers will be shaking their heads at lost opportunities.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Whitehorse and Carcross will be among seven northern communities to have unlimited internet options beginning Dec. 1. (Yukon News file)
Unlimited internet for some available Dec. 1

Whitehorse and Carcross will be among seven northern communities to have unlimited… Continue reading

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Mask fundraiser helps make children’s wishes come true

From Black Press Media + BraveFace – adult, youth and kid masks support Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Most Read