Energy Frontier
Resources: A measure of total energy production and consumption per capita
Market: The cost of consumption, measured in electricity prices and gasoline taxes
Infrastructure: Capacity to generate and refine energy sources; miles of pipelines
Alaska accounts for about 8% of U.S. oil production.
The industrial sector is Alaska’s largest energy consumer by a large margin.
Alaska has the lowest gasoline taxes in the country.
Alaska possesses vast energy resources, and oil and natural gas are critical to the state’s economy. Major fossil fuel reserves are found in the Alaska North Slope region along the Arctic Ocean and the Cook Inlet basins further south. The North Slope region contains many of the largest oil and natural gas fields in the United States. The Trans-Alaska Pipeline System was constructed in the 1970s to transport crude oil from the North Slope to the warm-water port at Valdez.
Despite being one of the nation’s top crude oil producers, Alaskan residents pay some of the highest gas and electricity prices due in part to infrastructure challenges stemming from its sprawling size (663,300 square miles) and rural populations. Roads connect Anchorage, Fairbanks and some of the other large cities, but Juneau and many smaller towns and villages are only accessible by boat or plane. As a result, many Alaskans live in areas that aren’t linked through transmission and distribution lines to a central electrical grid. Instead, nearly 80 percent of rural communities rely primarily on diesel-run generators for electricity and fuel oil for heat. Alaskans living off-of-the-grid may spend up to 47 percent of their income on energy, and spikes in oil prices can be financially devastating.
While fossil fuels provide the majority of Alaska’s power, some alternative energy sources are also in use. More than 50 hydroelectric power plants provide nearly 27% of the state’s net electricity generation. Alaska is also one of only eight states with power plants generating electricity from geothermal sources, and small wind energy facilities provide limited power to rural communities throughout the state.
The entire Arctic is estimated to hold as much as 90 billion barrels of oil and 1,669 trillion cubic feet of natural gas, or 22% of the world’s undiscovered conventional resources. Eighty-four percent of these hydrocarbons are expected to lie offshore, and Alaska's continental shelf is thought to have the biggest oil reserves.
The Kenai LNG Plant on the Kenai Peninsula was the first—and for more than 40 years, the only—liquefied natural gas export terminal in the United States.