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Alaska to Scale

Expansive and expensive


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We all know Alaska is the largest state in the United States and that the abundance of natural resources has fostered an economy dependent on the development of those resources. Once developed, those resources play out, with further exploration and additional development needed to keep production up to speed and generate more money for an ever-present and constantly growing population with expansive and expensive needs, much like the industries making up the economy.

Expansive and expensive—that is Alaska to scale. So much so that partnerships are needed, collaborative investments to enable progress in the growth and development of industries as well as to pay for and build needed infrastructure supporting all that progress. Some of these investments come from business and industry, some from government, some from foreign lands.

Alaska’s economy is built on partnerships between and among many private and public domestic and multinational corporations, nations, and governments.

Canada has long been a source of many long-term and ongoing collaborative natural resources partnerships. Northwest Territories Premier Bob McLeod has some new ideas for collaboration and partnership with Alaska, now that the Northwest Territories has undergone devolution and the federal government of Canada has now transferred responsibility for managing public land, water, and resources to the territory.

Much like when Alaska became a state in 1959, apparently, devolution with the Northwest Territories has taken decades to accomplish, with the federal government of Canada transferring some powers over time, such as responsibility for everything except managing public land, water, and resources, which was finalized in April this year. Now, the territory is more like a province in Canada, or a state in the United States. It will receive 50 percent of resource revenues generated within its boundaries of 440,500 square miles, nearly two-thirds the size of Alaska, which is 663,300 square miles. One thing much smaller is the population, 43,537 people according to 2013 estimates, compared to Alaska’s 2013 estimated population of 735,132—far fewer people there to provide services for, also a much smaller pool for workforce needs and infrastructure development.

However, the Northwest Territories holds vast reserves of energy yet to be developed. One of McLeod’s ideas is for a pipeline to the Beaufort Sea, where oil would be loaded onto tankers and shipped to world markets via the Northern Sea Route and the Northwest Passage. Ready to test out devolution and before Northwest Territories stranded oil is developed or a new pipeline is built, McLeod has an immediate idea to ship Alberta oil by rail and then barge to the Beaufort Sea, beginning in 2015. He is bullish on resource development, including distribution, and ready to form mutually beneficial partnerships.

Asia, a continent with 4.4 billion people that is reaching out to the rest of the world for natural resources, is a likely market and partner—with China as a prime source of investment capital for Alaska and the Northwest Territories. The country has nearly 1.5 billion people and a growing need for energy. China’s needs are expansive and expensive. This is a developing story.

We have several more in the November issue of Alaska Business Monthly and the team has put together another really great magazine. Enjoy!

—Susan Harrington, Managing Editor

This first appeared in the November 2014 print edition of Alaska Business Monthly magazine.
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