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'A whole new world'

A weather-beaten milepost stands like a weathervane in the center of Barrow, Alaska, reminding that you don't end up in America's northernmost town by accident. Arrows point in all directions-Paris: 4,086 miles; Chicago: 3,000 miles; Los Angeles: 2,945 miles; Greenland: 1,520 miles; and the North Pole, just 1,311 miles from the shores of Barrow. Reachable only by airplane or ship, this remote town of 4,000, where Inupiat Eskimos still hunt whales, walrus and seals, is quickly becoming a U.S. stronghold in what's being called the last frontier on earth.

The melting Arctic Ocean is opening up to shipping, tourism and oil exploration, with the eight countries bordering its fringes all vying to claim their bounty in the natural resource-rich territory. Barrow, which the Eskimos call Ukpeagvik (place where owls are hunted), has a bird's eye view on it all. "It's a whole new world up here," says Edward Itta, an Eskimo whaling captain and the mayor of the North Slope Borough, which encompasses Barrow and seven other settlements across northern Alaska.

This year is shaping up to be one of the busiest ever in the Alaskan Arctic, with dignitaries visiting the far north, wildcatters searching for crude, and government researchers mapping the seafloor to learn how much of the ocean the United States might claim as its own. The attention comes as Washington is revising its Arctic policy for the first time since 1994, and as the growing energy crisis becomes a bigger subject for the presidential campaign.

U.S. Homeland Security Secretary Michael Chertoff recently made his first trip to the Arctic, quietly stopping in Barrow with U.S. Coast Guard commander Thad Allen to assess the agency's future mission in the north. The day before Chertoff arrived, three ships contracted by Imperial Oil Ltd. were briefly trapped in sea ice 60 miles from Barrow while on their way to hunt for crude off the Canadian coastline. Meantime, a Chinese research vessel was wandering off the northwest coast of Alaska.

Back in Barrow, townspeople were wondering whether a boatload of Germans was going to show up for the second straight year-an Arctic oddity as telling of the climatic changes happening to their surroundings as reports of polar bears drowning off their shores. Last summer, German tourists showed up in Barrow unannounced. They'd come aboard a cruise ship that'd managed to sail from Europe via the Northwest Passage, that fabled passageway slicing across the top of Canada, which, until recently, was almost always ice-choked in summertime.

The increasing ship traffic hasn't been lost on the Coast Guard. The agency is carrying out training exercises in Barrow this summer, realizing that it may need a permanent summer presence at the top of the world to respond to potential oil spills, shipping accidents and distress calls. "Thirteen percent of the world's untapped oil is up there," says Capt. Mike Inman, chief of response for the Coast Guard's 17th District in Alaska. "That alone will drive what the Coast Guard's mission is in Barrow in the years to come."

More pressing, though, is how the United States will keep pace in what is becoming an all-out race to claim vast swaths of the Arctic. Last summer, a Russian submarine planted a flag on the sea floor at the North Pole. The expedition's leader, Artur Chilingarov, proudly proclaimed afterwards, "The Arctic is ours."

"We have explorers in our history like Daniel Boone. The Russians have guys like Chilingarov, who for 40 years has been one of the leading Arctic explorers in the world," says Mead Treadwell, chairman of the U.S. Arctic Research Commission. "We've ignored the Arctic for years, sometimes at our peril."

At issue is whether the United States should ratify a treaty that governs ocean rights extending off the coastlines of nations, and thus the natural resources and fisheries that lurk below. Under international law, the United States already holds a 200-nautical-mile zone from its shores. According to an international treaty called the Law of the Sea, the United States could claim an ever larger swath if it can show that the Alaskan continental shelf extends beyond the 200-mile limit.


But the United States is the only Arctic nation that hasn't ratified the treaty. "We do expect to become a party in the near future, perhaps this year or in the next couple of years," Margaret Hays, the director of the oceanic affairs office at the U.S. State Department, told reporters in a conference call last week.

This month, the Coast Guard has already dispatched its cutter Healy northward of Barrow to map the Alaskan shelf, which may extend more than 600 miles from the shore, three times as far as the current limit. "We have at least a California-size territory to claim," Treadwell notes.

Oil is the major prize hiding beneath that vast territory, as dwindling oil discoveries and record demand have pushed explorers into more remote and more hostile regions.

Last month, the U.S. Geological Survey released a survey estimating the Arctic may hold 90 billion barrels of oil and 1,670 trillion cubic feet of natural gas, with a third of this undiscovered crude off the shores of Alaska. That's enough oil to supply Americans for 12 years.

Oil companies have known for decades of the Arctic's potential, and two firms have already sunk huge investments to find the black stuff. London-based BP is set to become the first company to develop an offshore oil field in federal waters in the Alaskan Arctic. The company announced last month that it will spend $1.5 billion to extract 100 million barrels at its Liberty field, located six miles offshore of Alaska. Much of Alaska's federal waters have been open to oil exploration for decades. But the spike in prices coupled with new drilling techniques-BP says it will drill the world's longest wells to tap Liberty-have companies rethinking the Arctic.

Royal Dutch Shell is especially bullish. "We believe the Alaska offshore is home to some of the most prolific, undeveloped hydrocarbon basins in the world," said Pete Slaiby,

Shell's Alaska general manager, in a statement. The company has spent $2.2 billion in recent years acquiring offshore oil leases in Alaska. But exploring its prospects is proving near impossible-not because of the Arctic's harsh conditions-but because of lawsuits. Environmentalists and the North Slope Borough have sued the U.S. Minerals Management Service, the federal agency that regulates offshore oil drilling, claiming that Shell and other companies are unprepared for an oil spill in icy waters, and that noise from its operations may harm whales and other marine mammals.

Itta, the mayor of the North Slope Borough, isn't against drilling on land-Barrow, in fact, sits just a few hundred miles west of America's biggest oil fields, and Itta says the oil development has been good to the borough. But when it comes to drilling for oil in the ocean, he's hesitant to throw his support. Itta calls the ocean his people's "garden," where they get much of their food, including bowhead whales. Although bowheads are listed as endangered, the federal government grants Alaskan Natives an exemption to hunt a limited number for subsistence purposes. Last year, Barrow and other Alaskan villages took 42 bowhead whales.

Most residents here welcome anything that might make life a little bit easier. Despite the oil fields to the east of Barrow and the unprocessed fuel sitting under the nearby ocean floor, people rely on an annual shipment of high-priced fuel by barge. A gallon of unleaded gas currently costs $4.45 but residents fear the price will spike soon because it costs more money to ship the gasoline by barge. That may mean a slowdown in hunting as residents struggle to fill the gas tanks on their four-wheelers, snowmobiles and outboard motors. "The only thing that stands between us and a subsistence lifestyle is the price of gas," says Marvin Olson, the public works director for the North Slope Borough.

The global energy crunch can also be felt at the AC Value Center, the main grocery store in Barrow, where everything has to be shipped in. This week, a gallon of milk would set you back $9.99, a dozen eggs cost $4.39 and a 10-pound bag of flour goes for $16.99.

"It's like we're bearing the brunt here and getting nothing in return," Itta says. Those high prices are likely to remain the norm, but perhaps renewed interest and economic development in the region will help local residents be in better shape to afford them.

This story first appeared in Newsweek.com on Aug. 21, 2008.