As the world's largest economy muscles its way back into the very top echelon of global oil and gas production, Alaska—once viewed as a linchpin of U.S. energy ambitions—has now become an afterthought.
Shale drilling has turned North Dakota and Texas into an embarrassment of oil riches, while the Arctic state has seen its output collapse. Since the shale boom took off five years ago, the Lower 48 states have seen production skyrocket by 77 percent, according to an analysis by Global Hunter Securities. Simultaneously, Alaska's oil production has plummeted from a peak of more than 2 million barrels per day in 1988 to less than 400,000 currently, the Energy Information Agency says.
The state fell to No. 3 in oil production, behind North Dakota, in 2012.
The divergence between Alaska and the Lower 48 can be attributed to a little-understood fact. The drilling boom in Texas and North Dakota is largely due to state and private ownership of oil fields. Data from the Congressional Research Service show that oil production from federally owned land, like the Arctic National Wildlife Refuge, represents less than 40 percent.
"The U.S. talks about an "all-of the above energy policy while strangling development of federal oil lands," said Mike Krancer, head of the energy practice at the law firm Blank Rome. "It's politics. National parks are one thing, but when you have the oil acreage in a state like Wyoming, Colorado or Alaska, they make it prohibitive."