The Cost of Drilling: Oil in Alaska

The explosion thousands of miles away brought the Eskimo and oil execs together. With BP’s drill rig in flames, dead workers in the water, and gushing ooze spreading toward Gulf of Mexico shores, Marvin Odum, the president of Shell Oil, was worrying about a little-known Iñupiat leader named Edward Itta—who, in turn, fretted about his people and their future.

“What if that happens here?” Itta said to me of the BP debacle. It was April 2010, and I was in Barrow, Alaska, to research my book The Eskimo and the Oil Man, about how the relationship between 64-year-old Itta and Shell, one of the biggest corporations on earth, may hold a key to fuel prices you pay at home.

Barrow is as far away as you can get in the United States from Gulf oil fields, yet it is here that the struggle to balance energy needs and environmental protection is felt more keenly than almost anywhere else. The city of about 4,500 lies at the top of North America, at the icy junction of the Chukchi and Beaufort seas. Shell believes there could be up to three times as much oil off Northern Alaska as has been extracted from the Gulf in the past 22 years, energy that could lessen foreign dependence—which is why, as Deepwater Horizon burned, Odum took a private jet from Houston to calm Itta. The company hoped to explore for oil off Alaska that summer, near Eskimo hunting areas. But executives feared that Itta might block their $3.5 billion investment. He’d done it before.