Consulate of the Republic of Korea in Anchorage

Korea's Edaily News Paper published an opinion piece on Alaska by Korean Head Consul Joongsuk Park on January 31, 2025.

The original article can be found at www.edaily.co.kr/News/Read?newsId=01236566642043296

Unofficial Translatation

America's Last Frontier Alaska

On March 30, 1867, in Washington D.C., U.S. Secretary of State William Seward and Russian Minister to the U.S. Eduard de Stoeckl signed a treaty to purchase Alaska for $7.2 million, which is roughly $129 million today. Based on this treaty, the historic transfer ceremony was held on October 18, 1867, in Sitka, the capital of Russian America. As a result, the vast Alaska territory, which is 17 times the size of the Republic of Korea, became part of the United States.

At first, public opinion in the United States was not favorable toward the purchase of Alaska as it was seen as a useless and frozen land. However, in 1896, less than 30 years after the purchase, Alaska's value soared with the discovery of gold. The 1925 Charlie Chaplin film, the Gold Rush, is a masterpiece that humorously depicts people in hopes of making their fortune.

Crucially, a large amount of natural gas was discovered in Prudhoe Bay, located on Alaska's northernmost coast facing the Arctic Ocean, in December 1967, almost as if to celebrate the 100th anniversary of the purchase of Alaska. Subsequently, 9.6 billion barrels of oil was discovered, the biggest oil discovery in North America, in March of the following year, making Alaska a treasure trove for the United States. However, the development of oil in Prudhoe Bay was not easy. Transporting oil was the problem. As the Prudhoe Bay oil field is located on the Arctic coastline, oil tankers were unable to access it due to freezing conditions. It took a decade to transport the oil to the mainland United States after the construction of the 800-mile (1,287 km) Trans-Alaska Pipeline System to Valdez, an ice-free port on the southern shore of Alaska, marking the beginning of large-scale oil production in 1977.

In addition to Prudhoe Bay, it is estimated that significant reserves of oil and natural gas exist in the North Slope, the Arctic region of Alaska. However, the U.S. federal government has limited further exploration and development, citing the need for energy resource conservation and environmental protection. As the oil from Prudhoe Bay gradually declines and the state's revenues diminish as well, accordingly. The state government of Alaska has been strongly urging the federal government to approve energy resource development in those areas, with concerns about the state's economic stagnation. President Trump has also stated that he will actively support energy development in Alaska, bringing Alaska's energy development into a new phase.

On the other hand, Prudhoe Bay's natural gas needs its own dedicated pipeline and LNG conversion infrastructure, unlike the existing oil pipelines. Due to the lack of these facilities, the natural gas has not been produced or utilized until now. Over the past 10 years, the state of Alaska has been working on the "Alaska LNG Project," aiming to develop the region's natural gas resources and encourage the participation of companies from close allies such as South Korea and Japan. Due to the enormous cost of more than $40 billion and the long period expected for actual production and transportation, companies are hesitant to invest, which has led the project to be at a standstill. However, if Korean companies make bold investments on condition of favorable LNG import costs, the significantly shorter transportation distance compared to imports from the Middle East could lead to large-scale savings in logistics, making it more cost-effective in the long term. Furthermore, Korean companies' investment in energy development and imports from Alaska could also serve as a new area of economic cooperation between the Republic of Korea and the United States.

Alaska offers not only stunning natural beauty and exceptional tourism assets, but also a diverse range of natural resources, including coal, silver, iron, zinc, timber, and seafood, in addition to oil and natural gas, all of which are waiting to be developed. It is time for Korean companies to take a strong interest in "Alaska: America's Last Frontier" and actively consider investments for both the present and the future.