For three weeks to June 5, the James Dalton Highway lay underwater, following ice storms that burst the banks of the Sagavanirktok “Sag” River.
The Highway has earned a permanent position on lists of the world’s most dangerous roads. Stretching 414 miles through the Alaskan tundra, it is the sole route and supply line to the Arctic Ocean and its abundant oil fields. Only the most experienced drivers with heavy-duty trucks can navigate fearsome stretches with names to match from “Ice cut” to “Avalanche Alley.” A breakdown in the permafrost can be quickly fatal.
Yet the Dalton is well-trafficked, with hundreds of trucks making the trip between Fairbanks and Deadhorse each day. The recent flooding caused a backlog of over 1,000 journeys and the loss of millions of dollars.
The cold rush
Alaska has become too important to ignore. Beneath the frozen surface, the land and sea are rich in precious natural resources.
Prudhoe Bay is among the largest oil fields in the continent, producing 80 million barrels of crude per day. The lucrative minerals industry is soaring, with gold, silver and zinc coming out of the ground in increasing volume. Seafood is becoming a powerhouse of the local and international economy.
The asset boom is helping local businesses to capture overseas markets – exports have doubled over 20 years to $5.2 billion in 2014 — and is attracting international business to Alaska.
There can be a culture shock for new arrivals. Swedish engineering giant Sandvik Groupemploys around 50,000 people in over 100 countries, but after entering the Alaskan market as a construction and mining dealer in 2012, it had to adapt to unique conditions.
“Transportation is a challenge, especially considering that our equipment tends to be located in remote areas,” says Jeff Heinemann, vice president of Sandvik Construction in North America. “The minimal infrastructure makes access by road difficult … In remote locations, the best option for transporting people and parts could be air.”
Sandvik, like many of the international companies operating in Alaska, works with a local distributor that provides the benefit of experience and insight into Alaska’s working customs.
“Our customers may work around the clock in the five-six month construction season in the year or work around the clock in extreme winters,” says Heinemann. “The local companies will adapt their ways of working according to the climate conditions …We (have to) make sure our equipment is ready to go.”
Logistics are even more demanding on the Aleutian and Pribilof Islands west of the mainland, home to some of the most plentiful fisheries in the United States. Companies rely on boats and planes for transport, which is unreliable and expensive, says Larry Cotter, CEO of APICDA, an umbrella group of seafood companies that exports all over the world.
“In the case of one plant can we can only move out products three to four times a year, so timing to market is not always on the button. Sometimes we are two months late for a sale.”
The conditions are also notoriously dangerous, but demand for local fish such as Black Cod and Alaskan Salmon provides rich rewards. If Alaska were an independent nation it would be the seventh largest seafood supplier in the world, with exports worth over $3 billion a year.
“China and south-east Asia are huge growth markets,” says Cotter. “China has an insatiable appetite and is making a huge impact. Fifteen years ago, 99% of Black cod went to Japan, now it’s China, Hong Kong, and Singapore, along with the U.S., and Japan has to compete with them.”
Cotter believes Alaska must develop its infrastructure to capitalize on this boom. Modernization of ports and harbors, and investment in renewable energy, are key priorities.
The most ambitious project is a long-mooted pipeline for LNG (liquefied natural gas) that would serve the state, as well as export to foreign markets. A $65 billion, 800-mile scheme backed by oil giants Exxon Mobil, ConocoPhillips and BP, with support from the local authorities, is advancing through regulatory hurdles — including a federal review of the environmental impact, which has raised concerns — before six years of construction can begin.
The state has also made business-friendly moves, including the introduction of a trade zone that frees international companies from tariff requirements. Alaska’s airports have the most liberal laws in the United States for foreign companies transferring cargo.
If Alaska can improve its infrastructure, it is well placed to make rapid progress as an international business hub, says Dr. Darren Prokop, professor of logistics at the University of Alaska Anchorage. It is the best positioned of U.S. states for international trade, he points out — “within nine hours flying time to 90% of the industrialized world,” — and the only Arctic state, which guarantees resources, influence and prestige.
With the onset of major development projects, a new challenge is to maintain the unique environment. “It’s a beautiful area that has a lot of resources, so it’s a matter of balancing that equation,” says Prokop. “We want to extract the wealth but keep the pristine nature of the coastline and interior in a way that encourages tourism and travel.”
The future seems bright and full of possibilities. But whatever changes, the essence of working in Alaska will remain the same: a battle with nature at its wildest extremes. And as every Dalton Highway trucker knows, it cannot always be won. Source: CNN