Permafrost, as everyone who has worked in the oil sector in Alaska knows, describes soil that remains frozen year round. Back in the 1970s, when a group of oil companies collaborated on the groundbreaking (no pun intended) project of building the 800-mile-long Trans-Alaska-Pipeline, permafrost was just one of a multitude of daunting challenges engineers faced. They also had to transport large numbers of workers to highly remote regions, and find a way to secure the pipeline from everything from temperature swings to gunshots. (Because of the permafrost, long stretches of the pipeline were built above ground.)
It was a project on a scale that had never been attempted and the reason so many people saw it through to a successful completion in 1977 is that they knew it was worth the effort. Establishing a reliable means for transporting crude from Alaska’s oil-rich North Slope to points south was a sort of insurance policy for companies that explored in the region that their oil would find a way to market.
Interestingly, the pipeline project was born at a time of severe recession for the country and drew support both for the well-paying jobs it created and the promise of more reliable oil prices from home-grown sources.
It is ironic, then, that today the pipeline is facing an early demise even though estimates of proven oil reserves in Alaska continue to grow. The Anchorage Daily News recently published an extensive analysis of the massive investments that are already required to sustain the pipeline in the face of diminished shipments, and the growing concerns that it will soon not be economically feasible to operate the pipeline at all.
We’ve noted this problem in the past: how the health of Alaska’s oil industry impacts the health of all sorts of other industries on which the state’s economy depends. But as concerns mount about the future of the key vehicle for moving oil through the state, you also have to wonder how a weakened or entirely shut pipeline would affect production and exploration.
It’s a chicken-and-egg argument. The Trans-Alaska Pipeline was built because the demand existed to transport large volumes of oil. But if the pipeline were to go away, would producers have any incentive to stay, let alone, expand in Alaska? Political climates, of course, change with the seasons, but you can’t always patiently wait for a new, more welcoming climate, to blow in. As the saying goes, you must use it or lose it.
There have been some recent victories allowing responsible drilling in Alaska, but there are many more unresolved disputes that are critical to maintaining throughput on the pipeline, and in turn ensuring that Alaska’s oil infrastructure that was installed with great effort just a generation ago, remains intact.
