Arctic Resource Urbanization

Research Project on the Urbanization Processes of Resource Extraction in the Arctic
The Arctic & Alaska | 2013

Ali Fard + Ghazal Jafari

The most commonly known boundary of arctic is a circle wrapping around the globe at thelatitude of 66°33’39” North. From the climatologist’s perspective however, the boundary ofthe arctic is defined by the median seasonal temperature. The arctic boundary can similarlybe defined based on geology, land coverage, ethnicity, and other socio-environmental factors. These boundaries, alwayschanging and in transition, are indicators of the fluid nature of the Arctic. Socially, culturally,and politically constructed, these boundaries represent the collective need of communities,institutions, and states to define, or in some cases claim, the space of the arctic.Although these bordershave influenced the spatial definition of the arctic, the geographical boundary of the territory remains unclear.

Seen from the perspective of global flows of connectivity and land-use intensity the Arctic seems empty. Yet it is home to over 3.5 million permanent inhabitants and following the discussions around global warming and resource extraction opportunities, part of the global spatial imagination. The arctic is, and has been for decades, the site of intense and dynamic processes that have intensified over the past years with speculations of access to new natural resources. With each wave of explorations and discoveries, the landscape of the arctic hosts a nomadic kind of urbanization. Its citizens are troops of army forces, expedition teams and scientists. Southerners bring along a new generation of workers and engineers, and build up radio stations, ports and runways, to be the subject of re-appropriation or creative deconstruction for the next wave of occupant and their infrastructural and security demands.

Despite the popular imagination, the Arctic is extensively urbanized. It is heavily occupied by pipelines, shipping ports, highways, offshore drilling platforms, military stations, research camps, and so on. We have been investigating the extended urbanization of the Arctic. This investigation entails understanding how the occupation of land and sea has been under the influence of global events and circumstances, and how Arctic processes in turn influence global urbanization. It is estimated that the Arctic petroleum reserves account for one-fifth of the world’s undiscovered, recoverable oil and natural gas. Meanwhile, the known deposits of fuel for most of the countries in Arctic region are reaching their end. And while the potential of petroleum production has intensified speculation and exploration of Arctic space for more reserves, the melting sea ice is also opening new cross continental passages as seasonal cost effective distribution networks. The Northwest and North Sea passages are being considered as alternative seasonal routes for Panama and Suez canals, connecting sites of extraction, production and consumption within the global network. Petroleum production in the Arctic has been under the influence of dialectic between two dynamic processes: Climate change and its associated environmental degradation, and the fluctuation of the global price of oil, which is determined by oil geopolitics and global markets. The constant battle between oil prices and infrastructural costs of oil production determine when and where production takes place.

Global tensions over the Middle East oil reserves during the 1970s and 80s resulted in major transformations in the landscape of oil geopolitics. Disagreements over the share of sales benefits, in addition to political shifts in the region raised the tension to the peak of crises that are known as the largest oil crises of the petroleum history, such as OAPEC oil embargo of 1973, which triggered the emergence of extraction sites in many other regions and moved the attention of international oil market towards other potential energy resources, such as gas. The development and flourishing of petroleum industries in the Arctic region is greatly influenced by transformations of the global oil geopolitics. During 1970s and 80s, the European market was increasingly relying on Russian gas for fuel supply. On the other hand, Arctic states such as US had to shift their interest towards domestic fuel reserves. Therefore, Twenty years after the discovery of oil in Alaska, the massive cost of establishing a pipeline through Alaska was justified and construction of Trans-Alaska Pipeline System was started in 1972.

Following the spike in oil price after 2004, due to the invasion of Iraq, the global financial crises, and the Arab Spring, international oil companies have been pushing for new exploration projects. Many lease contracts have been signed between these companies and states, namely the activities of Shell in the continental shelf of Alaska.

From 1980 to 2000 Alaska's oil and gas production accounted for an average of 20 percent of the nation's domestic production. Although in recent years Alaskan oil production has declined significantly, it still accounts for approximately 8-10% of U.S. domestic production. Currently, Alaska is the largest producer of oil in U.S. after Texas, and Gulf of Mexico. Oil production in Alaska accounts for 25% of Alaska’s GDP.

Today, the Trans-Alaska pipeline is 800 miles of steel pipes carrying more than 400,000 barrels of crude oil every day from Prudhoe Bay extraction fields to the refineries of Alaska and finally to the Valdez oil terminal. From here the oil is shipped to refineries of US West coast and Hawaii, to provide a great portion of the domestic use of petroleum products in the American west. These 800 miles of steel pipes zigzagging through the Arctic tundra, together with the 12 pump stations that ensure the constant flow of oil, are one of the most expensive projects ever conceived, funded, and maintained by a private company, Alyeska Pipeline Service Company, formed by eight oil companies.

The development of the pipeline has been an essential catalyst for development in Alaska, contributing directly to the growth of Valdez,Fairbanks, and Anchorage. According to the general state released reports, historically Alaska has been plagued by economic challenges,due to the seasonal employment, high cost of living, lack of infrastructure, and a low tax base. But perhaps it is more accurate to say the there has been a shift in economy of Alaska from vernacular way of living to a growing capitalist economy.

Today, Prudhoe Bay, which is largest extraction site in US, has far passed its production peak. Economy of Alaska would be half its current size without oil industry, and this is when Prudhoe Bay is producing only one third of what it once did. That leaves no choice for the state other than promoting offshore drilling. On the other hand, the rising price of oil after 2004 has renewed interests in exploration for oil and gas in Alaska’s Outer Continental Shelf (OCS).

If we trace the flow of oil beyond Alaska to Cherry Point refinery in Washington, we can see that Alaskan oil accounts for a considerable portion of domestic and industrial fuel of Washington. For example it provides more than 85% of the jet fuel for Seattle-Tacoma Airport.The reach of Alaskan oil goes beyond the boundaries of US, leaving us with an important question. If urbanization is to be understood through operational processes, where does urbanization end? If the flow of Alaskan oil is manifested in highways, airports, high-rises and the urban fabric of cities such as Seattle, Los Angeles and San Francisco, where does the Arctic boundary lie?