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The Arctic is melting, setting off a scramble among countries and corporations to tap into the vast natural resources believed to lie below the ocean floor. GlobalPost examines this complex geopolitical puzzle — and the potential risks and rewards of an unprecedented opportunity.

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A view of Pond Inlet, an autonomous territory of Nunavut, Canada, July 26, 2012. This is the first Canadian stop on a journey along the Northwest Passage between Greenland and Canada. (Stefano De Luigi/VII/GlobalPost)

For poor Alaskan village, oil could change everything

This traditional Eskimo community stands to make a fortune, but at what cost?

WAINWRIGHT, Alaska – This small village is about to be taken over by big oil.

There are about 550 people who live here, most of them Inupiaq Eskimos. The remote village on Chukchi Sea has lived a traditional way of life as subsistence hunters for thousands of years.

In more recent decades, they have struggled with poverty and drug abuse. The geographical fate that makes them the closest spit of land to Royal Dutch Shell’s lease holds on vast offshore oil fields will likely change their lives in many ways.

The village is expected to serve as a staging area for Shell’s operation and that will mean jobs and improvements to their lives and to education and greater opportunities. But the oil drilling and expanded shipping also threatens the delicate ecosystem in the Arctic that provides them with their traditional way of life.

If drilling on Shell’s offshore leases begins to produce vast quantities of oil as expected, the pipeline that will carry it is likely to come to the surface right here in this tiny community, which has already begun to feel the impact of the Arctic melt that makes Shell’s drilling possible in the first place. And this is just the beginning.

“Our harvest is in our ocean.”
~Alice Morgan, Wainwright resident

The men who hunt these waters as well as inland know first hand the visible changes that the melt has wrought. Flies are bigger and fatter in the summer and have caused disease among caribou herds.

Spruce bark beetles — never seen so far north — have ravaged forests. Lakes are drying up. Dog sled teams can’t train on pack ice much of the year. It has left many of the village elders doubting their knowledge of the ice as climate change seems to be changing all the rules for future generations.

But it could also mean economic security for those generations.

This is a point of view that Kevin Hand, a high-level project management consultant hired by the Ogolnook Corporation to help Wainwright build the infrastructure it will need to serve as a staging area for Shell, is quick to point out.

“The geophysicists and the guys who shoot seismic data get absolutely giddy with joy because they say this is an absolute gem of a geological feature that is offshore,” says Hand, looking out the window of a pickup truck as it bounced through the narrow, muddy warrens of a tiny town that is about to witness extraordinary change.

There will be an influx of people. There will be an influx of traffic. It’ll be a cash infusion. It’ll be a job infusion. But it’ll also probably change to a certain extent the traditional way of life that people have enjoyed here,” says Hand.

That’s an understatement.

Alice Morgan was on the waterfront, watching four small boats circling just offshore. They were US Coast Guard spill containment boats. But they looked small, no more than 25 feet, and appeared to be inadequate to handle a large oil spill of any kind. Shell would soon be drilling in these waters, and her feeling was that the town is underprepared for what is to come.

Like many here, Morgan, 38, a mother of three, is of two minds on what oil means for the future.

“I think there’s a little bit of mixed feelings for me. People have farming communities and their harvest is in their backyard. Our harvest is in our ocean,” she says, shrugging her shoulders.

I’m worried. I’m worried about losing our way of life. I think all of us feel that way on some level,” she added.

Native officials are also keenly aware of this public debate, and what the oil can mean for the economy of the village.

The Olgoonik Corporation represents Wainwright residents as shareholders within the Alaska Native Claims Settlement Act of 1973. It is the entity that will collect royalties from the oil companies for the residents, or shareholders, of Wainwright.

And there will also be tax revenue from the oil for the state and payment to the federal government for the lease holds. All of this together will mean a largesse of billions of dollars for local and state residents. How much of this cash bonanza will actually get to the native people is a huge question here. But almost inevitably, the residents of