For three weeks earlier this year, 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 Group employs
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."
Building bridges
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.
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