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Alaska   Alaska Profile

State Profile and Energy Estimates

Profile AnalysisPrint State Energy Profile
(overview, data, & analysis)

Last Updated: October 20, 2016


Alaska's energy demand per person is the third highest in the nation.

Alaska, the largest U.S. state by area, is one-fifth the size of the Lower 48 states and, with the Aleutian Island chain, as wide as the Lower 48 states from east to west.1 It is the only state with territory north of the Arctic Circle, and it has the highest mountains and longest coastline of any state.2 Alaska's winters are frequently severe, but its climate varies significantly from north to south and from winter to summer, particularly in the interior where temperatures ranging from 100°F to minus 80°F have been recorded.3 Large areas of Alaska remain uninhabited. It has the fourth-smallest population and is the least densely populated of any state.4 More than two-fifths of Alaskans live in the Anchorage area, while the rest of the state averages less than one resident per square mile.5

The oil and natural gas industry is a key part of Alaska's economy.6 The North Slope contains half a dozen of the 100 largest oil fields in the United States and one of the 100 largest natural gas fields.7 Alaska's Prudhoe Bay field remains among the 10 largest oil fields in the nation. However, production from the North Slope has fallen to less than 500,000 barrels per day from its peak of 2 million barrels per day in 1988.8,9

In recent years, Alaska has experienced warmer temperatures for longer periods of time during the year. This temperature change reduces the amount of time energy companies can explore for onshore oil, because ice roads and drilling pads can be used only during the coldest months of the year, when the frozen land is less damaged by equipment. Conversely, the warmer temperatures reduce floating ice packs, potentially making offshore oil exploration easier.10

Alaska has other substantial energy resources. The state's coal resource is estimated to be larger than the combined resources of the Lower 48 states.11 Its many rivers offer some of the highest hydroelectric power potential in the nation.12 Large swaths of the Alaskan coastline offer significant wind energy potential,13 and the state's many volcanic fields offer geothermal potential.14 Because of its small population, Alaska's total energy demand is below the national median;15 however, harsh winters and energy-intensive industry make the state's per capita energy consumption the fourth highest in the nation after Louisiana, Wyoming, and North Dakota.16


Most of Alaska's crude oil production takes place on the North Slope,17 where new technology has recently resulted in the first increase in production in decades.18,19,20 Until this year, Alaska's oil production had declined steadily as the state's oil fields matured,21 but it has remained one of the top crude oil producing states in the nation. Known reserves on the North Slope have not yet been tapped,22 and large areas of the state remain unexplored. Oil exploration and drilling are prohibited in the Arctic National Wildlife Refuge and in other environmentally sensitive areas in the state.23

The Trans-Alaska Pipeline System transports crude oil from the frozen North Slope to the warm-water port at Valdez, on Alaska's southern coast.24 The pipeline can carry more than 2 million barrels per day, but actual deliveries have been less than 1 million barrels per day since 2003.25,26 Alaskan crude oil is transported by tanker primarily to refineries in Alaska, California, and Washington.27,28 On March 24, 1989, the Exxon Valdez tanker struck Bligh Reef and spilled 257,000 barrels of crude oil into the Prince William Sound.29 As a result, changes were made by industry and regulators in tanker construction, navigation technology, and crew training.30

Alaska is among the lowest one-fifth of states in total demand for finished petroleum products.31 The state has five operating refineries.32 Two of them, in the Prudhoe Bay region, supply fuel to crude oil drilling operations. Motor gasoline demand is primarily met by a refinery in Kenai, and aviation and heating fuels are produced there and in two other refineries, located at Valdez and near Fairbanks.33,34,35 A sixth refinery near Fairbanks, the state's largest, was shut down in 2014, with the owner citing unfavorable economics.36,37 Alaska is the largest jet fuel-consuming state on a per capita basis.38,39 It is a major fueling stop for military aircraft and for commercial passenger and cargo flights between the United States and Asian countries.40,41 Alaska also consumes petroleum to produce one-eighth of its utility-scale net electricity generation,42 and to produce electricity from diesel generators in isolated communities.43 Alaska both imports and exports petroleum products.44

Natural gas

Most of Alaska's natural gas production is reinjected into oil fields to maintain oil production rates.

Alaska ranks third in the nation in natural gas gross withdrawals,45 but most of the state's production is not brought to market. Natural gas volumes from the North Slope far exceed local demand, and there is no pipeline to transport the natural gas south to markets.46 Large volumes of natural gas, extracted during oil production, are reinjected into oil fields to help maintain crude oil production rates.47 About three-fourths of Alaska's natural gas withdrawals are consumed at the production site.48 Natural gas produced in the south is either consumed domestically or exported as liquefied natural gas (LNG).49

The state government has long urged construction of a natural gas pipeline linking Alaska's North Slope with markets in the Lower 48 states, but, to date, a pipeline has not been considered commercially feasible.50 Several major pipeline project applications have been filed with the state of Alaska, but none have yet gone forward.51 Until 2012, the Kenai LNG liquefaction and terminal complex on the Cook Inlet, which began operating in 1969, was the only facility in the United States authorized to export LNG produced from domestic natural gas. The terminal, which has capacity to liquefy up to 200 million cubic feet of natural gas per day,52 exports LNG to Japan.53,54,55 Four major oil companies have expressed interest in jointly building a new LNG export terminal in the Valdez area that could eventually ship up to 2.4 billion cubic feet of LNG per day. Such exports would require an 800-mile-long pipeline from the North Slope natural gas fields south to the Valdez region.56 One step forward was taken in 2016 when the first production well was drilled in the Point Thomson field, which contains much of the natural gas that would be exported. But the only marketed product from that well now is condensate,57 and low commodity prices continue to be a hurdle for the multi-billion-dollar project.58


Most of Alaska's coal exports go to Asia and South America.

Coal mines have operated in Alaska since 1855.59 Substantial deposits of bituminous, subbituminous, and lignite coal60,61 are found in the north, south, and central portions of the state,62 but most of Alaska's coal resources have remained unmined.63 Alaska has only one operating surface coal mine, the Usibelli mine, which produces about 1.5 million tons of coal per year.64 In some years, more than half of Alaska's coal output is exported. The rest is burned by in-state industrial and utility energy consumers, mostly heat and power cogeneration plants in the state's interior.65,66 Most of the state's coal exports go to Asia and South America.67


The electricity infrastructure in Alaska differs from that in the Lower 48 states in that Alaskans are not linked to large, interconnected grids through transmission and distribution lines. Although an interconnected grid called the Railbelt serves the populated areas from Fairbanks to south of Anchorage, where three-fourths of the state's population lives, even that grid is isolated from the electric grids in Canada and the Lower 48 states.68 Most of the state's rural communities have no grid access and rely on consumer-owned electric cooperatives for their power, and many of those rural power providers use diesel electricity generators for some or all of their power.69,70 This diesel use contributes to Alaska's ranking second only to Hawaii in the per capita generation of electric power from petroleum liquids.71,72

Natural gas accounts for about half of Alaska's utility-scale electricity generation, and hydroelectric power supplies one-fourth. Petroleum liquids and coal each account for about one-eighth of Alaska's net electricity generation, and wind and biomass provide nearly all the rest.73

Renewable energy

Hydropower is Alaska's largest source of renewable electricity.74 Utility-scale hydropower facilities are concentrated in the state's south, in mountainous regions with high annual rainfalls. Smaller run-of-river projects, which do not employ dams, produce power in some rural communities. Alaska is also exploring tidal and ocean technologies that could supply renewable energy to coastal communities.75

In 2015, wind supplied nearly three-fourths of Alaska's nonhydroelectric renewable electricity.

Less than 4% of Alaska's utility-scale net electricity generation comes from nonhydroelectric renewable sources, but small-scale wind, biomass, and solar generation are used in many of the state's remote communities to reduce the need for petroleum fuels. Wind resources are abundant along Alaska's coastline, and wind supplies nearly three-fourths of Alaska's utility-scale nonhydroelectric renewable generation from more than 60 megawatts of wind turbines,76,77,78 located primarily along the southern and western coasts and on the Railbelt grid.79,80,81,82 Increasing numbers of small wind energy facilities, including some wind-diesel hybrid systems, are providing power to rural communities throughout the state.83

Alaska's biomass fuels are wood, sawmill wastes, fish byproducts, and municipal waste. The first large-scale biodiesel plant in the state opened in 2010 and can produce 250,000 gallons of biodiesel annually using waste vegetable oil gathered from local restaurants. Wood is an important renewable energy source for Alaskans, with more than 100,000 cords burned every year for residential space heating. The state has a growing number of wood pellet manufacturers. About 8 million gallons of fish oil are produced annually as a byproduct at Alaskan fish meal plants; some of the fish oil is used for boiler fuel.84

Alaska was one of eight states in 2015 with power plants generating electricity from geothermal sources.85 The 400-kilowatt geothermal power plant at Chena Hot Springs, built in 2006, is the first geothermal project completed in Alaska. Its generating capacity has since been increased to 730 kilowatts.86,87 Several more geothermal projects are in development.88

Despite Alaska's high latitude, solar energy is playing a role in off-grid applications, especially in remote locations. Solar thermal technologies, primarily for hot water and building heat, and solar photovoltaic panels are all being used to tap solar energy when it is available, reducing the need for other fuels.89 Some Alaska communities are also adopting combined heat and power systems, using the waste heat from electricity generation to heat homes and other buildings.90

Energy on tribal lands

Alaska has more territory held as tribal lands than any other state—over 44 million acres.91 Almost all Alaskan tribal land is owned outright by 12 regional native corporations encompassing 229 tribal groups.92 The Alaska Native Claims Settlement Act, passed by the U.S. Congress in 1971, divided Alaska into 12 geographic regions of common heritage and interests. Under the Act, tribal lands do not have the sovereign status of reservations, as Native American reservations do in the Lower 48 states. Instead, the land is owned corporately by Native Alaskans, allowing them all to benefit from resources on their lands.93 The 12 native corporations hold most subsurface mineral rights for native lands and all rank among the largest private businesses in the state.94

Alaska's tribal lands include oil and natural gas resources on the North Slope and along the southern coast, and Alaska's largest bituminous coal deposit.95,96,97 Almost one-fourth of Alaska's 129 million acres of forested land is controlled by native corporations, providing the tribes with vast biomass resource potential.98 Seventy percent of the revenue earned from timber and mineral resources by each regional corporation is shared among all 12 corporations in proportion to their native populations. A significant portion of each corporation's revenue is then redistributed to village corporations within each region.99 The corporations have formed many business subsidiaries that involve Native Alaskans in the development of their energy resources, including drilling field services for crude oil and natural gas resources, oil refining, and real estate and financial services. One corporation manages a commercial-scale wind farm and is a shareholder in Alaska's first underground natural gas storage facility. 100


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