The Arctics existing oil supplies

Alaska is one Arctic region where oil has been flowing for some considerable time. Although Inuits had noticed oil seepages for thousands of years, the first proper oil exploration operations got underway here only in the early years of the twentieth century and the first producing wells had begun to operate at full capacity in 1911. It was not until much later, however, that the region really caught the eye of the big oil companies. In July 1957, a Californian exploration company struck an underground reservoir that flowed at a daily rate of 900 barrels, and this immediately prompted others to step up their search for Alaskan oil. The single most important discovery was at Prudhoe Bay on the Arctic coast, which was unearthed in 1967. It began operation a decade later and by the mid-1980s had become North America's largest oil field, producing around 2 million barrels every day and meeting around one-fifth of American domestic demand.

For some years, Alaskan oil has offered the United States limited 'security of supply' because a huge 23 million acre area of the province's North Slope forms part of America's National Petroleum Reserve. This area was originally set aside in 1923 by President Harding, who saw it as a source of emergency supply in the event of any serious disruption to imports, and in 1976 the United States Department of the Interior began to administer the site, which is currently estimated to contain around 10.6 billion barrels of oil, and renamed it as the National Petroleum Reserve - Alaska.

Both the central government and the state of Alaska have also drawn very considerable tax revenues from the local oil industry. In 2005, taxes and royalties from oil production accounted for 87 per cent of the revenues that flowed into the state's general financial fund, subsidizing the provision of basic services ranging from schools to roads and enabling all Alaskans to avoid paying state income tax. The US central government also earns huge sums from the sale of exploration rights: in 2008 oil companies spent $2.6 million acquiring leases on government-controlled offshore tracts.

There are also some parts of northern Siberia, lying just north of the Arctic Circle, where the oil industry is relatively well established. The most important of these is the Timan-Pechora Basin, located on the territory of the Nenets Autonomous Okrug and the Komi Republic in northern Russia, which is a mature hydrocarbon province. This area has a long history of oil and gas exploration and production. The first field was discovered in 1930 and, after another 80 years of exploration, more than 230 fields have been unearthed and more than 5,400 wells drilled. By early 2009, more than 16 billion barrels of oil and 40 trillion cubic feet of gas had been extracted from this part of the Russian Federation.

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