Output: More than 700,000 barrels a day from Alaska, but production is declining as fields mature.
Reserves: No one knows, because the region is sparsely explored. Estimates suggest huge, untapped deposits of oil and gas in waters north of Russia, Scandinavia and Canada. Alaska is estimated to hold 35 trillion cubic feet of natural gas, while the Northwest Territories holds six trillion cubic feet, as well as 2.8 billion barrels of oil.
The plan: Develop massive pipelines to stranded gas assets, such as the Mackenzie Valley and Alaskan gas reserves, while exploring for oil and gas under the Arctic ice cap, bringing those resources to market.
The Challenge: Extreme cold, sparse population, bereft of infrastructure.Extremely expensive to carry out exploration and development. But sky-high oil and gas prices are prompting companies to take a closer look at how they might exploit the North. Even at these prices, however, many are concluding there is more economic opportunity in balmier climes.
Technology: Offshore oil or gas drilling must cope with frozen seas, which would impede transportation. Unstable permafrost can threaten infrastructure, such as pipelines. Companies may look at production techniques that operate wholly underwater, such as the subsea production system developed by Norwegian firm StatoilHydro.
At Snohvit, an LNG export plant in the Barents Sea, StatoilHydro pipes gas from the ocean floor directly to a plant on the northwest Norwegian coast, instead of using a fixed or floating offshore platform to collect the gas. Must withstand extremely harsh conditions.
Cost of technology: Building an Alaska gas pipeline carries a price tag of $30-billion (U.S.), which would make it the most expensive private sector project built in North America. The Mackenzie Valley gas pipeline is expected to cost more than $16-billion (Canadian). Rough estimates suggest that the costs of producing a barrel of crude from the Arctic could be well over $60 (U.S.) a barrel.
Result: Alaska had made plans to get its gas out of the ground and down to southern markets in the 1970s. Thirty years on, that is still just a pipe dream, and any completed project is believed to be still at least a decade away. Producers such as BP PLC and ConocoPhillips Inc. are spending $600-million on preliminary pipeline work, while TransCanada Corp. is seeking government approval for a rival project. Only one, if any, will succeed.
VenezuelaOutput: 2.5 million barrels a day.
Reserves: 80 billion barrels of oil, and as much as 270 billion barrels of extra-heavy crude or bitumen in the Orinoco belt, an area in northern Venezuela similar to Alberta's oil sands.
The plan: To increase its production through development of extra-heavy Orinoco oil resources.
The challenge: Venezuela used to produce well over three million barrels a day, but output has fallen since workers at Petroleos de Venezuela SA (PDVSA), the national oil company, called a strike in 2002. More than 18,000 workers left PDVSA after the strike, leaving Venezuela without the expertise necessary to keep production rates level. After years of exploitation, the crude in conventional oil basins is becoming depleted. The challenge in the Orinoco belt is similar to Alberta's oil sands; the oil is heavy, and difficult to extract, transport and refine. Since it's not as attractive to refineries, it fetches a cheaper price than lighter crudes.
Technology: To maintain output rates and extract from deeper conventional reservoirs, natural gas must be injected. To develop the Orinoco belt will take billions of dollars more in investment in pipelines, steam injection wells, upgraders and other facilities necessary to produce extra-heavy crude.
Cost of technology: Venezuela needs to spend at least $3-billion (U.S.) at existing oil fields - on gas reinjection, water drainage, monitoring, and other maintenance measures - just to maintain production at current levels. To produce a barrel of crude from the Orinoco belt costs between $30 and $40.
Companies: PDVSA; foreign national oil companies from Brazil, Iran, China and India; Total, StatoilHydro, Chevron Corp., BP.
The struggle: Producers are leery of further changes in the country's royalty structure; last year, Venezuela completed a long-running battle to increase PDVSA's stake in oil projects operated by foreign companies. As a result, Conoco and Exxon left the country altogether in protest. Venezuela's continuing spats with the U.S. do little to engender the confidence of big business. Is there enough crude left in Venezuela to make it worthwhile for companies to do business with President Hugo Chavez?
Alberta oil sands
Output: 1.3 million barrels a day.