Understanding Arctic Oil Drilling: The History, Consequences, and Outlook

The Arctic faces challenges and risks from both on and offshore drilling.

A boat cuts a path through Arctic sea ice on a sunny day.

westphalia/ Getty Images

Oil exploration in the Arctic first began more than a century ago, but its history has been complicated by technical challenges and environmental impacts, both regional and global. As climate change melts sea ice, expanded drilling in the Arctic Ocean is becoming more feasible, yet considerable safety and environmental risks—as well as economic doubts—remain.

Major Events in Arctic Drilling

Trans Alaska Pipeline cuts across an Alaska forest of autumn colors with mountains in background.

sarkophoto/ Getty Images

In 1923, already aware of the potential value of Alaska’s North Slope oil, President Warren Harding established a strategic petroleum reserve for the U.S. Navy. This later became the National Petroleum Reserve, regulated by the Naval Petroleum Reserves Production Act of 1976. 

Major Arctic oil discoveries ramped up during the 1960s—first by Russia at the Tavoskoye Field in 1962 and six years later with the Atlantic Richfield Company’s discovery of an enormous oil field at Prudhoe Bay on Alaska’s North Slope. Canada soon joined in with new discoveries close to the Beaufort Sea, and Norway later opened the Barents Sea for exploration.

A significant milestone in Arctic drilling came in 1977, when the Trans-Alaska Pipeline was completed to transport oil from Prudhoe Bay some 800 miles south to the port of Valdez. The pipeline enabled the movement of massive quantities of oil, helping to ease pressure as the country reeled from the 1970s oil crisis, but also increasing environmental concerns.

North Slope oil development meant the infrastructure was now in place to facilitate rapid expansion of the U.S. oil industry in the region, and companies scrambled to secure additional lands for future exploration before the growing conservation movement could place them off limits. Attention increasingly turned to the adjacent wilderness, and a prolonged standoff commenced over what later became the Arctic National Wildlife Refuge, or ANWR.

Battle Over ANWR

A single caribou walks across the tundra of the Arctic National Wildlife Refuge with mountains in background.

Mint Images/ Art Wolfe/ Getty Images

As pressure grew to develop this biologically-rich wilderness of caribou, polar bears, and hundreds of species of migratory birds, some members of Congress sought to protect it by drafting the Alaska National Interest Lands Conservation Act (ANILCA) in the late 1970s. The act not only protected the ecologically important coastal plain but other wilderness areas across Alaska. A tug-of-war emerged between pro-oil and pro-conservationist congressional factions. 

Later, additional portions were protected and renamed the Arctic National Wildlife Refuge. But the battle over drilling in ANWR continued. Since ANILCA was signed in 1980, just about every president and congressional session has grappled with whether, and under what conditions, to permit drilling in the refuge. 

The conflict heated up once again during the Trump administration. In 2017, the Republican-led Congress authorized an oil and gas program in ANWR. The Trump administration held the first federal lease sale in 2020 weeks before his term ended, a move criticized by environmentalists claiming that the environmental review had been rushed. The incoming Biden administration suspended further oil and gas leases and ordered an additional environmental review of the federal oil and gas program.

New Frontier: The Arctic Ocean

Over-exploited oil fields around the world are declining, tempting energy companies to seek new sources of oil in the Arctic despite its hostile environment. In 2008, the U.S. Geological Survey (USGS) estimated that the Arctic contains nearly a quarter of the Earth’s undiscovered, recoverable petroleum resources: 13 percent of the oil; 30 percent of the natural gas; and 20 percent of liquefied natural gas. The burning of those fossil fuels is accelerating climate change. But that hasn’t stopped pressures to drill, and the increasingly ice-free Arctic Ocean has become the latest frontier.

Challenges and Dangers

Decades of Arctic oil drilling have caused numerous environmental problems that we continue to deal with today.

Oil Spills

An Arctic offshore oil rig in the Beaufort Sea flares, sending black smoke into the sky.

Stockbyte/ Getty Images

Of the petroleum resources in the region, the USGS estimates that 80 percent lie below the Arctic Ocean. Drilling there comes with risks from beginning to end. Seismic exploration, exploratory drilling, production platforms, pipelines, terminals, and tankers all pose threats to ecosystems both on and offshore.

The remoteness and extreme weather conditions increase the dangers. Deploying the necessary ships and gear to an ocean spill would be an enormous task, particularly in inclement weather. Although oil companies are required to have safety plans that include cleanup equipment and transport vessels, these measures can fall far short even under more favorable weather conditions. And little is known about what happens to oil trapped below the surface of ice once it freezes over again.

Harm to Wildlife and Indigenous Peoples

Both off and onshore drilling have the potential to disrupt natural systems. ANWR, for example, is home to migrating caribou, grey wolves, musk oxen, Arctic foxes, brown and black bears as well as polar bears, and migratory shorebirds. Additional oil infrastructure—pipelines and drilling rigs—is disruptive to wildlife, while spills could trap oil and chemicals in the ground and water, harming wildlife and affecting the food web for years, as occurred after the Exxon Valdez disaster.

Indigenous peoples of the Arctic rely on local fish and wildlife both for their material and cultural survival. Ecosystem disruptions posed by fossil fuel infrastructure and spills represent major threats to Indigenous lifeways and food systems, making drilling a human rights issue.

Today, the Trans-Alaska Pipeline continues carrying an average of 1.8 million barrels of oil a day from Prudhoe Bay to the port of Valdez. But the Prudhoe Bay supply is dwindling at the same time that oil prices have fallen.   

Accelerating Climate Change

Arctic drilling contributes to climate change, which is affecting the polar regions faster than any other part of the planet. Melting sea ice and permafrost further accelerate climate impacts on Arctic ecosystems, Indigenous communities, and other rural Alaskans grappling with increased flooding, water contamination, and food insecurity. Thawing permafrost additionally threatens the Trans-Alaska Pipeline’s elevated supports, making it more vulnerable to spills.

Melting sea ice also creates risks as ocean conditions become less predictable. Giant icebergs and sea ice once frozen in place now move faster and more often, posing hazards for shipping operations. Increasingly severe storms that generate strong winds and larger waves, heightening the risk of accidents and increasing response times.

An icebreaker ship navigates through large chunks of Arctic sea ice.
An icebreaker ship navigates through large chunks of Arctic sea ice.

LYagovy/ Getty Images

Environmental Activism

Decades before climate change became a global concern, the U.S. conservation movement geared up to protect Arctic wildlife. In the 1950s, wilderness advocates lobbied for federal action to shield northeastern Alaska from mining and drilling. Momentum to defend the Arctic against extractive industry grew in subsequent decades alongside exploration and development of oil and gas fields. Indigenous groups expanded the scope of the fight from strictly wilderness preservation to environmental justice. 

One of the most consequential events in the Arctic conservation movement came in 1989, when an oil tanker ran aground in the Prince William Sound, spilling 11 million gallons of North Slope crude oil over 1300 miles of coastline. Some of the worst-affected areas proved difficult to access, delaying cleanup and worsening the damage. 

The Exxon-Valdez disaster changed public perception of oil drilling and drew new scrutiny to industry safety. In 1990, President George H.W. Bush signed the Oil Pollution Act, aimed at preventing future oil spills through better response, liability, and compensation systems. 

Offshore Drilling Resistance

Kayaktivists from the sHellNo! Action Council pose in front of a drilling platform in Port Angeles, Washington.

Charles Conatzer & the sHellNo! Action Council/ Flickr/ CC by 2.0

As developing economies began to boom and global fuel demand rose, higher oil prices helped make Arctic Ocean drilling a more economically appealing option. The promise of ice-free shipping passages only increased interest.

Royal Dutch Shell became the first to pursue drilling in U.S. Arctic waters, gaining permission for exploratory wells in the Beaufort and Chukchi Seas—on the condition that it would safeguard against accidents like the 2010 BP Deepwater Horizon blowout. But a series of setbacks ensued, including a shipping accident that prompted Shell to pause drilling in the Alaskan Arctic until better safety measures could be reported to the Department of the Interior.

Environmental groups seized on industry failures to highlight Arctic offshore drilling risks, staging protests to highlight the potential for ecological disaster and reject the expansion of fossil fuel development generally on the grounds that it would accelerate climate change. In 2015, a coalition of environmental and community groups filed a lawsuit against the U.S. government for allowing Shell to drill in the Chukchi Sea without a thorough environmental assessment. 

Shell announced in 2015 that it was all but abandoning exploration in the Chukchi Sea after finding less oil and gas than expected. Other oil companies, including ConocoPhillips, Iona Energy, and Repsol have also left, citing challenging conditions, low oil prices, and environmental risks and pressures. 

The Future of Arctic Drilling

The future of Arctic drilling will be shaped in part by the Arctic Council, established in 1996 to promote cooperation between the nations with claims to Arctic territory: the United States, Russia, Canada, Norway, Sweden, Finland, Denmark (including semi-autonomous Greenland), Iceland, as well as Indigenous groups, and other countries, like China, with an interest in the region.

The Arctic Council’s work excludes military operations. But as climate change makes the region more accessible, resource competition could lead to conflict. Russia has been particularly aggressive about expansion of military facilities to protect its Arctic resources. The country has by far the longest Arctic coastline and largest share of its oil and gas resources. Russia’s recent pursuit of Arctic Ocean drilling included Gazprom’s first stationary oil-drilling platform, located in the Prirazlomnaye oil field, in 2013. The country more recently initiated exploration in its East Arctic waters, drilling the first-ever oil wells in the Laptev Sea

An oil rig in the north of Russia on a winter night is illuminated by bright lights.
An oil rig in the north of Russia on a winter night.

Natalia Kokhanova / Getty Images

In Alaska, an Australian oil and gas company recently announced it had discovered more than a billion barrels of crude oil in the National Petroleum Reserve. While the Biden administration may seek to limit drilling in ecologically sensitive areas like ANWR, it faces a decision about whether to allow this and future production projects to occur in the National Petroleum Reserve. 

Norway is also pursuing drilling in its Arctic territories. But in June of 2021, youth climate activists joined Greenpeace and Young Friends of the Earth in filing a lawsuit asking the European Court of Human Rights to intervene, arguing that Norway’s oil exploration harms future generations by accelerating climate change. 

Other countries have pulled back from fossil fuel production in and near the Arctic as part of a broader movement toward decarbonization. Denmark halted new oil and gas exploration in the North Sea at the end of 2020. Greenland, which may have some of the largest remaining oil resources, announced in the summer of 2021 that it would abandon exploration off its shores, citing fossil fuels’ contribution to climate change.

Lower oil prices and public pressure over climate change have lately dampened enthusiasm somewhat for Arctic drilling, as have the technical and economic challenges posed by such a harsh environment. As the world transitions to renewable energy, the window may further narrow for Arctic drilling. But oil and gas interests in the region will continue as long as future market conditions and political winds allow. And so will environmental resistance.

View Article Sources
  1. "Evolution of Arctic Energy Development: A Timeline (1962-Present)." The Stimson Center, 2013.

  2. "The Trans-Alaska Pipeline." Alaska Public Lands Information Center.

  3. "H.R.39 - Alaska National Interest Lands Conservation Act." U.S. Congress.

  4. "Circum-Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas North of the Arctic Circle." United States Geological Survey.

  5. Goodyear, Jeff and Ben Beach. "Environmental Risks with Proposed Offshore Oil and Gas Development Off Alaska's North Slope." Natural Resources Defense Council, 2012.

  6. "The Arctic National Wildlife Refuge: An American Crown Jewel in Need of Permanent Protection." National Wildlife Federation.

  7. "Request for Early Warning Measures and Urgent Action Procedures." Gwich'in Steering Committee.

  8. "Climate Impacts to Arctic Coasts." United States Geological Survey.

  9. Melvin, April M., et al. "Climate Change Damages to Alaska Public Infrastructure and the Economics of Proactive Adaptation." Proceedings of the National Academy of Sciences, vol. 114, no. 2, 2017, pp. E122-E131., doi:10.1073/pnas.1611056113

  10. "Analysis and Proposed Decision: Trans-Alaska Pipeline Right-of-Way Lease Amendment, ADL 63574 - Thermal Improvements at Lost Creek Hill, Pipeline Milepost 392." State of Alaska Department of Natural Resources.

  11. Barber, D.G., et al. "Increasing Mobility of High Arctic Sea Ice Increases Marine Hazards Off the East Coast of Newfoundland." Geophysical Research Letters, vol. 45, no. 5, 2018, pp. 2370-2379., doi:10.1002/2017GL076587

  12. Thomson, Jim, et al. "Emerging Trends in the Sea State of the Beaufort and Chukchi Seas." Ocean Modelling, vol. 105, 2016, pp. 1-12., doi:10.1016/j.ocemod.2016.02.009

  13. "Exxon Valdez." National Oceanic and Atmospheric Administration.

  14. "Department of the Interior Releases Assessment of Shell's 2012 Arctic Operations." U.S. Department of the Interior.

  15. "Shell Updates on Alaska Exploration." Shell.

  16. Masters, Jonathan "The Thawing of the Arctic: Risks and Opportunities." Council on Foreign Relations, 2013.

  17. "North Slope, Alaska." 88 Energy.

  18. Casey, Kevin. "Greenland’s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off." The Arctic Institute, 2014.