Benefits of Arctic Drilling, in Four Paragraphs

November 9, 2015 in Blog

As Arctic Energy Center has documented, Arctic energy development can benefit Alaskans, residents of the Lower 48, and future generations of Americans by creating jobs, contributing tax revenues, bolstering Arctic infrastructure, and strengthening domestic energy security.

Oil and gas taxes currently provide about 90% of Alaska’s general revenue, and developing Alaska’s offshore continental shelf areas is estimated to generate, over a 50-year period, an annual average of 35,000 jobs in Alaska alone, total estimated payroll of $72 billion, and $4 billion in property taxes to local governments (in 2007 dollars).

Oil and gas activities also help fill the infrastructural deficiencies in the Arctic, as the equipment and capabilities that companies bring with them to the Far North can be used to supplement regional security and search-and-rescue efforts. Seeing as the U.S. currently lacks critical infrastructure in the Arctic, the stark need for extra resources is made all the more clear in the recent rescue of a stranded sailor (and his cat), who were stranded in the Arctic, in which the U.S. Coast Guard relied on Shell’s drilling vessels to offer assistance.

Americans outside of Alaska will benefit from Arctic energy development as well. Developing Alaska’s offshore resources will pay dividends to the rest of the country: U.S. Arctic energy development is estimated to generate, over a 50-year period, an annual average of 54,700 jobs nationwide, total estimated payroll of $145 billion, up to $193 billion in government revenues, $97 billion in federal lease revenues, and $51 billion in federal corporate income tax revenue (in 2010 dollars). As a concrete example, the Puget Sound area in the Pacific Northwest, which is a hub of maritime and industrial activity that has supported resource development in Alaska for more than 100 years, received $313 million in direct investment from just Shell alone from 2006 to 2014.

Lastly, current and future generations of Americans would be able to enjoy a more robust energy security – and a foreign policy approach not shackled to our energy needs – that Arctic energy development can provide. At a time when most developed nations’ foreign policy objectives are driven by their need for a secure and reliable source of energy, the domestic energy renaissance the U.S. is currently experiencing is affording us the option of whether or not we want to acquiesce to the stipulations of hostile yet energy-rich countries. But because shale development is expected to decline in the 2030s and 2040s, harnessing our offshore Arctic can help ensure that our energy security will remain sound for decades to come.