Alaska's oil revival sparks a new energy rush Into the Arctic | Hacker News Reader

Alaska's oil revival sparks a new energy rush Into the Arctic

fortune.com

46 pointsBrajeshwar66 comments

It's not a widely known fact that sales of new combustion engine cars peaked in 2017 and has been on a downward trend since then, while global EV sales have ~10x in the same time period.

So it seems like these new investments are in a race. Will they pay off before they become stranded assets? The Saudis and other middle east countries have the lowest production costs, so unless Alaska can somehow keep costs to ~$20/barrel, I would not bet on it.

Gasoline is only one of the byproducts of oil products a modern economy requires. Lubricants, diesel, nitrogen, and the list goes on - these are still all needed even if we convert to 100% EVs.

All non-transportation fuel uses account for a total of only 33% of crude oil consumption. Of the other 2/3rd, gasoline accounts for 43%. So yes, switching to EVs would have a massive impact, and probably put unconventional sources of oil (eg. Venezuela and Alberta) out of business. As for diesel, EV truck sales are starting to take off too.

https://www.eia.gov/energyexplained/oil-and-petroleum-produc... https://www.iea.org/reports/global-ev-outlook-2025/trends-in...

Oil products are a fractional distillate of a barrel of oil. How are you going to pave the roads all these EV’s are going to drive on, or produce the plastic they consume (EV’s require ~40-50% more plastic)? If gasoline demands softens it doesn’t necessarily mean that other oil product demand will decrease at similar rates. Oil production declines over time so you need constant development even in a declining consumption scenario, and I think we are heading into a world where domestic supply will command a premium.

And let’s not forget: fertilizer. About half the world’s population is fed with foods produced from the Haber-Bosch process, which makes nitrogen fertilizer [1]. This relies on hydrogen inputs primarily from natural gas. The fact that we’re burning this resource that our highly populated planet depends on is suicidal.

https://ourworldindata.org/how-many-people-does-synthetic-fe...

That may be true, but also according to data from the U.S. Energy Information Administration, global oil production is up over 8% since 2017 (2017-2025). https://www.eia.gov/outlooks/steo/data/browser/#/?v=6&f=A&s=...

So, oil and gas doesn't really work this way.

When you dig a well, hit (hopefully) hit oil. As of the 2010s, we could extract oil from the fractures in the rocks using high pressure water. This is hydraulic fracturing or "fracking" as it's more commonly called.

Let's say that oil well produces 1000 barrels per day ("bpd"). Depending the oil field, the production decreases over time. For the Permian basin, which is currently the US's largest source of oil and it runs from West Texas through Oklahoma up into the Dakotas, that decline rate is 15-20%. For comparison, Saudi oil has a decline rate of 3-5%. In Saudi Arabia, you're basically just sticking a straw in the ground and hey presto, you have an oil well.

So after ~3 years, the output of your well has halved. That means, US production has to add ~2Mbpd of new oil wells every year just to maintain the ~13Mbpd of crude oil production. If we didn't drill a new well, our production would be ~6-7Mbpd in 3-4 years.

One issue with all this is that many in the industry fear we've hit peak oil production on the Permian basin and it's only going to go down from now. So we're looking for alternatives just to maintain our output.

Now, when people talk about the uses of oil, they tend to concentrate on cars and other forms of transportation. Cars have alternatives (ie EVs). Long-haul trucking is still reliant on diesel. There is no alternative to avgas currently. Or bunkers for ship fuel. Also, there are a bunch of non-energy uses for oil, such as industrial chemicals, plastics, construction (eg heavy oil for building roads). If you include strict non-energy uses it's 20-25% of cruel oil demand. If you include avgas, bunkers and even diesel, it's substantially higher.

Now, for trucking we could build out infrastructure for this but we haven't. China is doing this (of course). This would be a significant project.

I wrote another comment on this thread about the economics of Alaskan drilling. The tl'dr is it's... not good. And that's the biggest barrier. They've actually been trying to do this since 1980 and it's gone nowhere.

I can guarantee that when the oil industry collapses these companies won't take the last million in their bank accounts and use it to properly cap wells and clean up dead and soon to be decaying infrastructure. We throw money at them to destroy the environments they drill in (practically giving them the land for free). We throw money at them when they sell it (by giving them tax breaks). We throw money at them for producing the products from it (by not charging for the externalized costs of global warming and pollution in general) and we will throw money at them as they are dying (by not forcing them to pay for cleanup before starting drilling). The golden parachutes of oil execs are already being packed and everyone can see it but, shocker, nobody is stopping it.

Why would the oil industry collapse? It seems to me that there is nearly an unlimited demand for energy on the planet. If there's extra energy somewhere, humans will find a use for it. Quality of life for humans is directly correlated with energy abundance (of all kinds, solar is included in that).

Because it’s on track to become expensive than other sources of energy. There are plenty energy sources we don’t use because they are comparatively expensive.

Burning oil directly is incredibly dirty, even though Saudi does that, it feels like a bad bet in general in terms of environmental destruction. You can refine it into gasoline, but that takes as much energy so you wouldn’t gain much.

Better to just apply it for non-energy use cases.

The big producers would do it.

Its the small guys and the fly by night mom&pop producers who leave pure environmental carnage behind.

Why do you think the big producers will clean up when they aren't forced to do so? Is there a history of them doing that I am not aware of?

What gives you this impression? Take a gander at all the superfund sites in the States - they’re almost all caused by 1) the government or 2) large corporations. And neither of those entities made any efforts to clean up those sites until forced to.

But they were forced to, and it cost them billions. Far more than what they saved. Megacorp is still paying for the superfund near me, despite it being deemed contained 45 years ago.

Mom and pop places that caused super funds never paid out a cent, because they were small operations that folded decades ago and never had billions anyway.

Hence my comment.

The oil industry is dying and we are destroying the planet and a delicate ecosystem to harvest non-renewable energy. It should stay in the ground and be saved for future generations for an emergency, not to just power grossly oversized vehicles and social media content generation to manipulate people into buying things.

It's important to keep in mind the scale. The US is producing around 15 million barrels of oil per day.

The projects mentioned in the article, combined, would be less than 6 months of the US production.

It's important for the locals in Alaska, but it's not going to change anything globally. Except maybe killing off a few endangered species and damaging the fragile ecosystem. But that's a small price to pay for oil companies' profits.

Even close to 6 months of US capacity is huge.

It is. But also not game-changing. And we don't have an infinite number of wildlife preserves that we can throw under the bus.

Arctic development is also expensive, and even the planned projects would have been impractical without already-existing infrastructure.

By that definition almost nothing is game changing?

The US is one of the most oil hungry countries on the planet, and even 3 months supply is a quarter. That would definitely move the needle on prices!

> By that definition almost nothing is game changing?

Yes. That's indeed correct. No amount of new oil discoveries or desperate attempts to put an oil well in every endangered species habitat is going to change the current trajectory.

The practically recoverable oil reserves in the US are estimated at around 150-200 billion barrels. That's about 30 years at the current production rate. Though not at the current price, a lot of reserves are economical only if the oil price is high enough.

So we'll still need to switch to something else in the long run, regardless of the CO2 pollution.

Uh ok? That seems rather pointless as a comment on current affairs.

This will change things for the foreseeable future, and is certainly going to move the needle over that time.

No. It's _extremely_ important to keep in mind the actual scale of these kinds of projects.

When people are saying about "energy rush" and "vast reserves", it's important to keep mentioning that the total amount of these reserves is just enough for maybe _months_ of the total US consumption. But the damage to the ecosystems might take hundreds of years to recover, and that's not even mentioning the CO2 pollution.

And this is not common knowledge. I visit Alaska periodically, and I've heard several times from the local people that there are oil reserves there for "hundreds of years". And we're not using them because the Federal government is not allowing them to drill for it.

You’re the one that seems to not fully understand the scale of what is happening - economically.

‘Months of US supply’ == large portions of the world GDP.

People want to get rich and/or not starve now (and for the next 20 years) too.

> ‘Months of US supply’ == large portions of the world GDP.

The world's yearly GDP is around $120T a year. 1 billion barrels at $50 per barrel is around 0.04% of that.

lol, $50 bbl, and no counting knock on economic activity or price effects? Sure.

Totally agree.

We also need to deduct the cost of the eventual remediation and cleanup. And the cost of resettling people from the ghost towns once the oil runs out.

A truly idiotic investment when renewables are already cheaper than existing fossil fuel infrastructure (much less new infra)

This attitude misses the realities of scale bottlenecks and sunk costs.

If we ignore climate externalities, it makes sense to build solar as fast as we can and also pump oil, preferably for export.

> If we ignore climate externalities, it makes sense to build solar as fast as we can and also pump oil, preferably for export.

I appreciate that "externalities" is a term from economics. But its also worth remembering that there are no externalities when it comes to the global climate and atmospheric system. There is precisely one planetary atmosphere and we all share it. When we degrade its ability to support life then that ultimately affects all life.

White executives in their late 60s cannot care less, they'll be dead by then

Types of energy are not fungible. In some circumstances they are, but not always.

Your statement is true, but does not imply that we need new fossil fuel investment.

The entire planet is energy-constrained right now, there aren't enough solar panels or batteries to power all the demand we have, and the demand only continues to grow. We are so energy constrained in fact that people are trying seriously to deploy new nuclear in the US. Even with countries like China massively subsidizing solar, we're still not going to have enough renewable energy deployed.

Does that mean the US won't try to annex Canada and Greenland, after all?

When they say "The Arctic", you can often read that as being within the borders of Canada.

When you have something, and you lack the means to defend and assert that right - do you really have it? Canada has so defunded its military, that it's effectively an undefended nation.

Canada has so defunded its military

Not anymore.

Nah, they are essentially irrelevant unless they are operating as part of a coalition. Last I checked they are still waffling on what 5th generation fighter jet to procure while the rest of the world are starting to plan for the 6th generation.

We're quite literally flying the "Legacy Hornet" that was phased out of the US arsenal in the early 2000's. We bought the ones Australia retired so we could keep flying these ancient planes. We had such poor capability and data link compatibility that we've been passed over on recent NATO exercises.

Their replacement has been a political football for the last ~20 years, extending so far beyond the rational lifetime of our original CF-18's that it boggles the mind. Those who've tried to keep rust buckets on the road know how high the cost can be for trying to keep something flying for so long.

This extends to basically every part of the Canadian military - extreme delays followed by politically motivated (and extremely bad) decision making.

I presume you mean the recent changes to finally get Canada up to 2% GDP for its military spending? (I'll put aside some of the accounting shenanigans going on there)

I disagree - literal generations of cutting to the bone and beyond cannot be turned around overnight. Defunding isn't just about the dollars, it's about the lost mindshare, training, culture, morale, equipment, stockpiles - everything.

It will take a generation of strong investment and actual commitment to get this force back to something it ought to be. And based on trends since the 80's, future governments will be quick to pull back on any recent allocations.

Do you feel the same way about your personal property? Defend it at all times with force or it is effectively someone else’s?

What a horrible world you live in.

We're talking about nation states here, not houses in a policed region. That's not a valid analogy.

Say you're East Timor and your neighbour wants what you have - if you don't have the means to defend yourself, you're pretty much screwed (and they were). It's the main reason we have a military - this is a harsh and unforgiving world at that level, and you need to maintain a given level of capability. We are not at the "end of history" as some thought in the early 90's, and this has been doubly re-enforced after the invasion of Ukraine.

So what I'm saying is that by making such sustained and deep cuts to the Canadian military, that our political leaders have left the second largest nation in the world undefended and subject to the whim of its neighbours. And if you're paying attention, those are some pretty unsavoury neighbours.

"What a horrible world you live in" - what a snarky and hostile thing to say, why not try to understand my message before typing out such a barbed and dismissive statement?

I believe by that logic then the whole world is China.

Your message is literally “some a-hole is going to use force to take your stuff unless you spend money on guns and bombs instead of schools and healthcare”

I say again - what a horrible world you live in.

Oh I see, sorry I didn’t realize your point of view was this simplistic.

Good luck with your pacifist utopia, hope some guy with a nail in a board doesn’t come and take it all.

Also worth pointing out that Canada could 100x its military spending and still not stand a chance against the orange whale if he wants it

Do you know how much hard power credibility the US has lost from the Iran War failure?

The US couldn't defend our bases in the area or our newly less enthusiastic regional allies. It couldn't keep the Hormuz open. The US wasted years worth of advanced munitions inventory defending against relatively cheap missiles.

The US couldn't annex Canada if it wanted to. Canada doesn't even need a military to destroy the US via assymetric tactics.

"US couldn't annex Canada if it wanted to" - Truly, the state of our military is shockingly bad. The US Marines could annex Canada, and I honestly mean that.

I do agree that the US military's perceived preeminence has taken a big blow, but what you're saying is just outrageously false.

I do not think they could. It is not just a matter of seizing something as much as holding it, as everyone has plainly seen in Ukraine, or post-occupation Iraq or Afghanistan.

Neither of those latter countries had a large shared land border with the US and ethnically similar populations that would make it easy to attack unhardened infrastructure.

Not sure that Canada has defunded it's military as much as it's been told "you don't need it". Canada couldn't buy proper nuclear subs from the USA but for Australia it was okay? And let's not talk about locally sourced defense tech programs... Ahem Avro

I think the USA has long desired a stronger nation to the north. Not only would it be a good place to sell second-tier weapons (CF-5 anyone?), but it is also quite an important border to secure. It's only the extreme harshness, inaccessibility and vast distances that make it less of a concern. Well, that and Alaska provides enough of a launching point to swat at anything of concern.

The "you don't need it" excuse might have faired in the 90's post-war peace dividend times, but that's been a thing of the past for decades now. Our politicians really have used it as a chequing account when they can't make things balance. Hell, our airshow demonstration team was flying aircraft some 50 years old, and this was just disbanded - for budgetary reasons!

We've long done things radically on the cheap. From buying discarded legacy F-18's, to old garbage UK second hand subs. Hell our MCDV maritime defense vessels are cobbled-together from: a turbine for a skyscraper, WWII guns taken from museum pieces, and a hull that was never designed for any of this. You can imagine how well that worked out.

It's not just cheapness - it's political wankery. We had a multi-billion dollar helicopter contract cancelled, and paid more in fees that it would have cost to deliver the aircraft. Only to just buy those aircraft anyway years down the line. We signed on to the F-35 program, to bail on it, only to re-join it again. Our politicans act like we don't need a military, and it can be thrown around for political purposes - it's embarrassing, honestly.

If you want a good perspective from a veteran, a good resource is Esprit de Corps: https://www.youtube.com/@espritdecorpsmagazine

Why the downvotes?

What we should be doing is reducing our dependence on fossil fuels but nobody gets rich that way. Mines (including oil wells) are incredible wealth concentrators eg [1]. Also, nobody goes to war over a solar panel [2] and weapons are the ultimate product. They get used once and need to be replaced.

But there's a lot of fearmongering and misinformation here. For one thing, it's been nearly 20 years since drilling has been allowed in ANWR and, to date, zero commercial drilling has taken place. In fact, the only exploratory drilling I'm aware of is Chevron's KIC-1 effort in 1986 [3] and the results of that have been kept secret.

Now, if the results were spectacular, wouldn't you think Chevron would've started drilling? Even if there are, there are lots of reasons why it wouldn't happen.

First, just look at a map. Look at where the highways end. Depending on what you count as a road, that's either Fairbanks, Alaska (in the middle of the state) or Delta Junction (SE of Fairbanks). You would need to build massive road infrastructure all the way to ANWR. It can't be done any other way. This is above the Arctic Circle and only usable several months of the year. I've seen estimates that this alone is like $5-10 billion in investment.

Second, you need to house a lot of people up there and get them in and out. All of this is expensive. Building anything up there is expensive. You need workers for that. Those workers need housing. Everybody needs to be fed. Food needs to get in. You need water. It goes on and on and on. This is likely a $10-20 billion project (complete guess).

Third, you actually have to drill up there. In West Texas, it goes ~$8 million to drill a well [4]. How much does it cost in Alaska? Well, we have some comparative data, namely the Willow Project [5]. The costs for this are spiralling. We don't seem to have individual well costs but they say 150 wells and $9 billion. If that's true, it's $60 million per well.

As further evidence, there was an auction for ANWR leases and nobody bid [6].

You need to recover that extra cost and the only way to do it is scale so there needs to be a massive amount of oil and it's unclear if that's the case.

My point here is not that expanded drilling can't happen in Alaska. Instead it's that there are significant economic barriers to such a project and it's not as inevitable as any president just signing an executive order.

[1]: https://www.mdpi.com/2071-1050/17/9/4111

[2]: https://www.theenergymix.com/no-one-goes-to-war-over-a-solar...

[3]: https://www.latimes.com/archives/la-xpm-2001-apr-29-me-56952...

[4]: https://incorrys.com/energy/energy-cost/well-costs-by-play-b...

[5]: https://www.upstreamonline.com/field-development/conocophill...

[6]: https://environmentamerica.org/center/articles/why-no-one-bi...

Good post

What a truly amazing coincidence that failed Alaskan projects that can supply energy to Asian "allies" without maritime choke points become profitable again!

Just as the Hormuz double blockade is implemented and extended. The current peace talks are just theater. Expect new "peace talks" every two weeks for years to come.

Putin, Trump and the fracking mafia will be very happy.

Something's gotta power all those new AI data centers with massive capacity and it isn't wind and solar.

It's unlikely to be oil either. Sometimes it's natural gas.

not in a petrostate anyways

Right, under Trump the US has become a full-blown petrostate. We may as well start calling him the Emir.

He's not an emir by a long stretch. His closest "allies" are waiting by the door for the inevitable announcement that time took its toll and he has faded into wherever you go when all your dysfunction stops functioning at all.

They are wolves waiting to Al Haig their way into his current position.

Actually lately it's been Hydro and Solar.[0] A little of natural gas, and thankfully a ton less coal.

[0] - https://arstechnica.com/science/2026/05/soaring-solar-and-a-...

The Ember 2026 report[0] shows that 75% of new power generation in 2025 was from solar. Solar + wind were 99% of new generation capacity. Fossil fuel generation dropped for one of the first times ever (historical reductions were typically due to structural reasons like COVID or recession). In a first, renewable sources made more for the planet than coal.

Renewables are absolutely going to be powering the future. Recent events have done nothing but accelerate the transition as countries are going to run to reduce their petroleum dependencies.

[0] https://ember-energy.org/latest-insights/global-electricity-...

Leveling up civilization and moving up the tech tree requires orders of magnitude more energy.

It really ought to be solar+batteries. It'd be slightly more expensive to build up-front than oil-based solutions, but probably not much and the companies building these data centers have the money to pay for that.

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