The Arctic is opening to commerce. How will this affect the American Arctic coast?

Image courtesy of Wikipedia.

Welcome to Utpiagvik (or Ukpiagvik), formerly known as Barrow, Alaska. The northern most city in the country and continent. About 5,000 people live here on the coast of the Arctic Ocean. There are no paved roads and a gallon of milk costs around $15. Life can be tough up here.

There is no road to this town, at all. The closest road, if you want to call it that, is the Dalton Highway which ends at Deadhorse 200 miles away. The Dalton is 400 miles of unpaved emptiness, populated by only 3 towns with a combined population of less than 100 permanent residents (although Deadhorse boasts up to 5,000 ‘residents’ of oil workers depending on production). In the picture above is the Dalton, you can see the Trans-Alaska Pipeline (TAPS) to the left of the road.

400 miles of that, but most of it much, much flatter. There are no other roads north of Fairbanks. As you can see below, this is a problem for most of Alaska, over 80% of the state is inaccessible by road.

So, even if the entire Arctic goes ice-free (it won’t by the way) and trans-Arctic shipping becomes a real player in international commerce (this is already beginning), how many years do you think it will take before the necessary infrastructure is built to even consider building cities up there? There’s only one reason that people are living in large towns that far north, oil. Utpiagvik sits on the North Slope, a 90,000 square mile area of Alaska home to only 10,000 people, 50 trillion cubic feet of natural gas, and 28 billion barrels of oil.

That oil and gas is the only thing keeping permanent settlements in the region. The Arctic Slope Regional Corporation (ASRC) is the Alaska Native corporation responsible for administering Native land and financial holdings in the region. (Alaska doesn’t have Indian tribes, we have Alaska Native regional corporations. It’s a weird and unique story and, as with many things Alaska, oil plays a prominent part. Here’s a short primer.) The ASRC is the wealthiest of the Native Corporations and, just like any corporation, the members of the corporation are the shareholders and receive regular dividends from ASRC. Here’s their dividend announcement from a few years ago to demonstrate:

“The Arctic Slope Regional Corporation (ASRC) board of directors has announced two dividend distributions for ASRC shareholders this fall. The first dividend declared is a regular dividend distribution of $40 per share, and the second is a special $60 per share dividend, both to be issued together in early December, with the payout totaling $100 per share. The average ASRC shareholder owns 100 shares of ASRC stock and will receive $10,000. These dividends bring the total dollar amount distributed since incorporation, in the form of dividends, to nearly $740 million.”

The average Native shareholder in Utpiagvik received $10k in just the fall of that year. These dividends are the reason people can have actual lives up there because there is no other economy to speak of. If you live up there you work for government or you work for the oil companies. That’s basically it.

The opening of the Northwest Passage for shipping is a great boon for the global economy and will bring some tourists on cruise ships. In fact we already had a few come up. However, again, infrastructure is a problem. There aren’t even any ports or harbors that far north. Passengers had to take small craft to gawk at the locals (who were both amused and irritated by this. Nobody had told the city that the ship was coming and the tourists bought out many of the local stores. This is more than an inconvenience for a town in which literally everything they eat, drink, or wear — that wasn’t harvested during a hunt — has to be flown in. The added expense of flying in emergency replacement supplies added to the cost burden.)

No roads. No harbors. No economy. Hundreds of miles of tundra, ice, and mountain ranges to cross in order to build roads, ports, and economic infrastructure. An extremely challenging climate. I haven’t even mentioned the polar bears. There is so much that needs to be done and to be built before the Arctic coast becomes a viable place for human beings to live in large, permanent, self-sustaining cities. Don’t hold your breath.