Massive Investment Coming to Northern Alaska

caeluspipelinewsj

Photo from Wall Street Journal, Click to enlarge.

The Wall Street Journal is reporting that little known Caelus Energy has made a huge find of oil in Smith Bay off the North Slope of Alaska, West of the current North Slope oil fields.

To get at the oil they expect to use “barges built along the Gulf Coast, then towed to Alaska and permanently sunk in the bay to create man-made drilling islands.”

To move the oil they expect to build “an $800 million, 125-mile pipeline that will carry the oil underneath state-owned waters to connect with existing pipelines.”

What does this mean to us?

Certainly, it means that there will be more activity in the Arctic. That may mean more work for the Coast Guard. On the other hand, it may not be a bad thing to have some of the assets the oil company will bring to the Arctic there for mutual aid.

Those commercially built, medium icebreakers are probably going to have another buyer soon, and may not be on the market for long.

This may also be an opportunity to share some infrastructure in the Arctic.

I do have to wonder why the pipeline will be, “underneath state-owned waters,” when it would be much shorter if it went from point to point rather than following the coast. Do they think it will be easier to maintain, or are they avoiding Federal regulation?

 

3 thoughts on “Massive Investment Coming to Northern Alaska

  1. It is unlikely that oil development off shore will add to the development of North Alaska, or be a job provider. At least according to all state and federal studies done thus far. I did all that research well over a year ago when Shell oil started its Chuckchi Sea venture. The development of the North Slope development has added very little prosperity to the people or communities of that region other than the Alaska Fund.
    I suspect the pipeline being laid off shore is because they cannot intrude on ANWAR. Underwater pipelines do have some serious drawbacks. The off shore pipeline in southern California has over the years developed some serious leaks that were pretty messy until detected.
    This will however place more demands upon the Coast Guard and its arctic programs.

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