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Sailing into the

Arctic’s Future

By Randall Luthi

Last month, a large cruise ship com- a nascent industry. In the Alaska Arctic, onshore develop- pleted its inaugural cruise through the ment has occurred for decades, supplying a safe and con-

Northwest Passage. The historic journey sistent source of home-grown oil to consumers in the lower brought nearly 1,700 passengers from 48 states via the Trans-Alaska pipeline. Canada and Nor-

Seward, Alaska, past the rugged wilder- way have been receiving oil and natural gas from offshore ness and isolated villages of the Arctic, projects operating in the far north, and Russia has upped to the concrete jungle of New York City. longstanding activity above the Arctic Circle by recently

Along the way, passengers and crew opening the Arctic gate marine terminal linking Russia’s were treated to a stunning contrast of Arctic-sourced crude oil to European and Asian markets.

Luthi climates, geography and culture. There is no reason why similar progress isn’t possible

While understandable, concerns over within the U.S. Arctic. Energy demand will only increase passenger safety, wildlife disruptions and water pollution in the coming decades, and by 2040 fossil fuels will still went unrealized during the historic cruise through the pas- supply around 80 percent of our energy needs. An esti- sage. A centuries-old navigational barrier has been success- mated 26 billion barrels of oil and 131 trillion cubic feet fully breached, presenting both challenges and opportuni- of natural gas lay offshore Alaska and could help meet this ties for the natives of the Arctic. For them, the world has energy demand. Dozens of wells were safely drilled in the indeed become smaller, as receding ice now allows more Beaufort and Chukchi Seas in the 1980s and 1990s us- face to face contact with outsiders from around the world. ing technology generations behind the modern technology

The challenge now is that these new opportunities are on used to safely drill a new well in the Chukchi Sea during terms determined by the Arctic natives, and that change in the summer of 2015. Even though the hoped-for deposits culture and technology come as a result of invitation rather were not discovered at that well, it is too early to rule out than domination. signi? cant ? nds elsewhere in the area.

The same holds true for the energy industry, particularly While the current low commodity price environment offshore oil and natural gas. The Arctic has long held the has indeed made things more challenging for an industry potential for abundant energy development, which is sup- that is experiencing very tough economic times, what we ported by most Alaskan natives. However, like much of do know is that offshore oil and gas developers take a long- the Arctic, the Alaska OCS remains largely unexplored. term view and will often ? nance projects in the short-term

Economic conditions and politics have literally put oil and knowing that projects planned today take many years to natural gas exploration in the US Arctic on ice. As demon- develop. While global energy market economics remain a strated by the recent cruise through the Northwest Passage, challenge, U.S. policymakers can certainly take concrete thawing ice is allowing for a new source of economic and steps to improve the regulatory environment and address social development through the tourism industry. Like- the myriad, sometimes unnecessary, challenges to bringing wise, the economics of the energy industry are expected home-grown Arctic energy to market. to improve, providing incentive for oil and natural gas ex- One of the ? rst steps in providing that environment is to plorers to prove the energy potential of the Arctic. guarantee lease sales in the Alaska Arctic, which will be no

The question facing the energy industry is whether U.S. small feat. The Obama administration is ? nalizing the 2017 politics will allow for an energy thaw. It is important to – 2022 offshore leasing plan and anti-fossil fuel activists, point out that Arctic oil and natural gas exploration is not fresh off their success in the Atlantic, have made removing

October 2016

MN 26

MN Oct16 Layout 18-31.indd 26 9/21/2016 3:18:42 PM

Marine News

Marine News is the premier magazine of the North American Inland, coastal and Offshore workboat markets.