History of oil in the Arctic

Current oil and gas production areas (Map: Arctic Portal)Current oil and gas production areas (Map: Arctic Portal)Historically there are three main regions in the Arctic linked to oil exploitation: the Beaufort Sea coast (North Slope of Alaska and the Mackenzie Delta of Canada), the Canadian north-eastern Arctic (Nunavut), and northwest Russia (Barents Sea and West-Siberia).

Within the three, first developments of oil and gas fields took place in Russia (Komi Republic), then in Canada (Alberta) and finally in the USA (Alaska).

Comparison of the development of oil and gas fields in the circumpolar North reveals two fundamental models of developing these resources: the European (or North Sea) model and the American (USA, and partially Canada) model. Both of which occur with regional peculiarities.

The European model is often described as an "interventionist" or "state capitalist" system. Often a state-run national oil company plays the central role in developing and managing the resource. Private companies also participate directly, often in cooperation with these national oil companies. In addition the state has strong influence on the administration, issuing and allocation of production licenses including a strong influence on the requirements expected from private companies engaging in this model.

In the so-called American model the state mostly has a regulatory role. Control over production and development is left in a relatively exclusive degree to private companies who obtain and compete for licenses and concessions through auctions.

A major force of development throughout the circumpolar North came during the 1960's and 1970's due to political instabilities of major suppliers from the Middle East region. This made development of oil fields in Arctic and subarctic regions economically feasible and politically advisable. The development led to a number of new oil and gas fields both onshore and offshore as well as to the construction of according transport systems (pipelines).

For example the Trans-Alaska Pipeline in Alaska was built between 1974 and 1977 and in Northwestern Siberia for a total of 14 years, between 1973-1986, at least one major construction project was undertaken either for major oil or gas pipelines each year. Often these megaprojects led to controversies with local population, as either resources were on traditional grounds belonging to indigenous peoples or the installation of oil fields or pipelines affected the traditional ways of subsistence (e.g. reindeer husbandry, fishing, hunting).

There are numerous examples of megaprojects with a varying degree of involvement and participation of local / indigenous people in benefits and profits. Read more in the Megaprojects chapter.


Sources: UArctic USA Department of Energy UArctic UArctic

International Polar Year The Northern Forum University of the Arctic Arctic Council International Arctic Science Comittee Norden Arctic Portal

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