Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth The Trans-Alaska Pipeline stands near Copperville, Alaska. The Trans-Alaska Pipeline stands near Copperville, Alaska.Photographer: Daniel Acker/Bloomberg.

The shale boom might reach the ”Last Frontier,” the Anchorage Daily News reports:

An oil explorer hoping to bring the Lower 48's fracking revolution to Alaska will take a big step this week when it launches an effort to determine the production potential of crude oil locked in North Slope shale.

The process is expected to start Wednesday, when Accumulate Energy Alaska begins drilling an exploration well along the Dalton Highway about 40 miles south of Prudhoe Bay.

In June, it plans to hydraulically fracture that vertical well, using water, chemicals and sand to crack and hold open rock so oil flows from the shale. A production test to determine how the well oil flows is also expected this summer.

There’s big potential. One company thinks fracking could unlock 3.6 billion barrels of oil.

A boost in oil production would be a win for the Trans-Alaska Pipeline. Oil production on the North Slope has been declining since the late 1980s, along with the amount of oil moving through the pipeline. As oil flow decreases, it gets harder to move through the pipeline in Alaska’s frigid winters.

 Alaska North Slope Crude Oil ProductionEIA chart: Alaska North Slope Crude Oil ProductionSource: Energy Information Administration.

What’s more, under law if the pipeline stops operating, it must be dismantled. Rebuilding it would not only cost billions but face protests from “Keep it in the ground” extremists like we’ve seen with the Keystone XL pipeline, the nearly-operational Dakota Access Pipeline, and in the Northeast.

While small-scale fracking has been going on for decades in Alaska, it hasn't to the extent of what’s been happening in Texas or North Dakota. Bloomberg notes that new technology and state policy changes opened the door to the technique:

Until recently, companies also didn’t have underground imaging technology good enough to peer beneath the Arctic permafrost and pinpoint shale reserves below.

Now that’s changing. State tax breaks passed earlier this decade have encouraged explorers to give shale a look, and 3-D seismic imaging technology allows them to make a more educated guess about what’s below.

Perhaps Alaska shale could challenge the levels of top shale oil regions in the Lower 48.

Cost will play a major factor in fracking’s success in Alaska. As State Sen. Bill Wielechowski, asked, "I've heard the potential is tremendous, but is it affordable?" It will be a logistical challenge to get the water, sand, and chemicals for fracking on the remote North Slope. But it's not insurmountable knowing that for three decades, companies have successfully delivered the equipment and materials needed to produce billions of barrels of oil from the region.

Beyond fracking, Alaska could regain some luster as an oil-producing state. Earlier this year, two companies, Repsol and Armstrong Oil & Gas, announced it discovered an oil field on the North Slope that could contain as much as 1.2 billion barrels of oil. It’s the largest find in the U.S. in 30 years.

If any of these plays pans out it could mean the Trans-Alaska Pipeline will continue to be a valuable piece of American energy infrastructure for years to come. In addition, Americans would continue to have access to the abundant energy necessary to power our economy and sell to hungry energy markets.

Sean Hackbarth U.S. Capitol dome seen through the U.S. Capitol Visitor Center. Photo credit: Andrew Harrer/Bloomberg.

Early on in his time in office, President Donald Trump has made great strides on energy. Unlike his predecessor who only paid lip service to embracing all of America’s energy abundance, President Trump is advancing policies he expects will “start a new energy revolution.”

In Oil & Gas Financial Journal, Karen Harbert, president and CEO for the U.S. Chamber’s Institute for 21st Century Energy lists off some of President Trump’s accomplishments:

Moreover, at the time of this writing, numerous additional measures were just set in motion, including an executive order declaring energy independence a strategic national priority, initiating withdrawal of EPA's Clean Power Plan, reversing the Obama Administration moratorium on federal lands coal leasing, and repealing National Environmental Policy Act (NEPA) guidance aimed at making mitigation of upstream and downstream greenhouse gas emissions a condition of federal environmental permitting.

As of press time, the Trump administration has already taken executive action to:

advance permitting decisions for the Keystone XL and Dakota Access pipelines; rescind an EPA data-collection program on methane emissions for oil and gas facilities-a precursor to eventual regulation; withdraw the Environmental Protection Agency's "Waters of the US" rule; repeal restrictions on fracking on federal lands; and sign Congressional Review Act legislation repealing the Bureau of Land Management's anti-coal "Stream Protection Rule."

But Harbert notes Congress needs to lock in these gains:

Reining in federal agencies, however, is no substitute for legislation. Many of the administrative actions the president has taken are subject to similarly straightforward reversal by future chief executives.

The good news is that members of Congress are eager to get to work and motivated by the opportunity to collaborate with a supportive president. Groundwork is underway. Key congressional leaders have announced their intent to pursue updates to the Clean Air Act, Clean Water Act, Endangered Species Act, and NEPA-not to undermine important environmental protections, but to prevent regulators and activists from perverting statutory intent as a means to block investment and energy production. We are even more optimistic about changes to the way regulations are developed, through the Regulatory Accountability Act, and bipartisan infrastructure legislation that could help ease energy bottlenecks.


When both ends of Pennsylvania Avenue work to unshackle America’s energy sector, good jobs, rising wages, and stronger economic growth will follow.

Sean Hackbarth  Tim Rue/Bloomberg.Oil tankers anchored near the Port of Long Beach, Calif. Photo credit: Tim Rue/Bloomberg.

The U.S. oil export boom is an example that policy matters.

In December 2015, after 40 years, American oil was allowed to be exported. Companies quickly got to work, and they haven’t looked back.

Energy Information Administration data show that 746,000 barrels a day of oil were exported in January 2017.

 U.S. oil exportsChart: U.S. oil exportsSource: Energy Information Administration.

The record pace continues, CNBC reported in March:

The U.S. last week sent more than 1 million barrels a day of crude out of the country, the third biggest export week ever, and double the average amount exported in 2016. It is also the third time this year that U.S. exports exceeded a million barrels a day, an industry record.

Before the restrictions, 92% of oil exports went to Canada which was exempt from the export ban. But in 2016 U.S. crude oil went to 26 different countries.

By changing the law, new markets opened to American oil. This incentivized companies to invest in domestic production, which in turn, supports workers who produce and transport oil. There are over 500,000 jobs in the oil and petroleum industry according to an Energy Department report. Some of these jobs wouldn’t exist if it the export ban hadn’t been lifted.

It’s a reminder that when it comes to supporting jobs and our economy, good policy out of Washington makes a difference. It's why the U.S. Chamber supported lifting the ban. Here are the Congressmen and Senators who voted in 2015 to make this happen.