As the Arctic's ice recedes, energy companies are spending billions to develop the region, which holds nearly one third of the world's undiscovered natural gas and 13 percent of its oil, according to U.S. estimates. Shell,* which had made high-profile forays into the Beaufort and Chukchi Seas the previous summer, was forced to suspend its drilling plans for 2013 after trouble with its rigs, including a dramatic rescue to secure the errant Kulluk rig in January. (See related stories: "Errant Shell Oil Rig Runs Aground Off Alaska" and "In Kulluk's Wake, Deeper Debate Roils on Arctic Drilling.")
Alaska moved this year to take advantage of the new Arctic interest. With oil production at just 25 percent of its 1988 peak, the state revised its oil and gas tax structure to attract new investment. The lowered cost for energy companies has led Alaska to increase its industry investment projections to $10 billion over the next decade, but the state will take a hit in lost tax revenue, losing one third, or $2 billion, of its 2013 income from current energy production. (See related: "To Stem Fall in Oil Output, Alaska Seeks to Slash Industry Taxes.")
Beyond energy production, other milestones emerged this year in the Arctic: The Northern Sea Route saw its first container ship transit—and also its first tanker accident—as shipping activity continued to increase exponentially. (See related story, "Arctic Shipping Soars, Led by Russia and Lured by Energy," and interactive map, The Changing Arctic.) The increasing traffic is lending new urgency to safety and cleanup technology efforts. With the effects of the Deepwater Horizon spill still reverberating in the Gulf of Mexico, researchers and government authorities acknowledge that responding to a similar incident in the Arctic's icy waters will require better tools. (See related: "As Arctic Melts, a Race to Test Oil Spill Cleanup Technology.")
The Arctic's energy future may be "ice that burns," frozen methane hydrates below the seafloor and Arctic permafrost that potentially harbor more energy than is stored in all the world's known oil, coal, and other natural gas reserves. (See related pictures: "Unlocking Icy Methane Hydrates, a Vast Energy Store.")
(See more stories: The Arctic: The Science of Change.)
*Shell is sponsor of the Great Energy Challenge initiative. National Geographic maintains autonomy over content.