Essay

This striking photo depicts Dome Petroleum’s operations in McKinley Bay, located on the Tuktoyaktuk Peninsula of Canada’s Northwest Territories, in 1983. While there are many impressive photos of this era of feverish and technologically-advanced drilling for oil and gas in the Beaufort Sea, this image offers a specific visual provocation of the tropical with the Arctic through the juxtaposition of the ad-hoc palm tree atop a dredged beach in the foreground with the ice and massive drillships in the background. This photograph, captured by Harry Palmer, then Director of Environmental Affairs for Dome Petroleum Limited, further helps unveil the complex and unexpected relationship of Arctic oil exploration with struggles for sovereignty in the Global South and resource nationalism in the tropics and subtropics.

Northern Canadian oil industry history formally began with Imperial’s discovery at Norman Wells in 1920, along with the short-lived boondoggle of the CANOL (Canadian Oil) pipeline to Whitehorse during World World II. Extensive aerial surveying of the Arctic Islands by the Geological Survey of Canada in the 1950s spurred oil industry interest, and was soon followed by the launching of the federal “Roads to Resources” program in 1958, issuing of exploration permits for massive tracts of the region by 1960, and the drilling of the first exploratory well in the Arctic Islands by the aforementioned Dome Petroleum in 1961. The federal state took an increasingly direct role in regional exploration in 1967 with its formation and 45 percent ownership of Panarctic Oils, tasked with drilling on behalf of many permit holders throughout the Arctic Islands. The discovery of oil at Alaska’s Prudhoe Bay in 1968 greatly heightened the urgency of Arctic oil exploration in Canada, which saw its first major success two years later when Imperial struck oil at Atkinson Point that was immediately next to McKinley Bay, the eventual overwintering location for Dome’s drillships where this photo would be taken over a decade later. Massive natural gas fields were also discovered in the Mackenzie Valley delta in the early 1970s, soon becoming the impetus for competing pipeline proposals.

However, Arctic oil exploration only reached the levels of scale, coordination, and financing required for the massively costly drillships depicted in the background of Palmer’s 1983 photo in the wake of the “oil price revolution” of the 1970s spurred by oil-producing countries of the Global South (J. Laxer 1983, 2). To be sure, Western oil markets had long been organized in direct opposition to anti-imperialist struggles, such as the US retaliating against Mexico for nationalizing its oil industry in 1938 by shutting out and substituting it with more oil from then-pliant Venezuela (Prashad 2008, 180), while the British similarly blockaded Iranian oil exports after nationalization of the Anglo-Iranian Oil Company in 1951 (Khalili 2020, 73; Mitchell 2011, 144–145). The Tripartite Aggression (or Suez Crisis) of 1956 — in which Israel, Britain, and France invaded Egypt for nationalizing the Suez Canal and blocking oil transportation — saw Saudi Arabia implement an oil embargo that meant “Western Europe ran the risk of being deprived of two-thirds of its oil supply” (Garavini 2019, 94). This threat to Western oil interests was repeated during the Six-Day War of 1967 — triggered by Israel’s invasion of Egypt and Palestine in reaction to Nasser’s closure of shipping lanes to Israeli vessels — that led to the closure of the Suez Canal, the shutdown of a key pipeline, and another oil embargo against Israeli allies (J. Laxer 1983, 34; Mitchell 2011, 164). News coverage of the creation of Panarctic Oils later that year attributed interest in Arctic oil exploration to “the Middle East war in June which interrupted the flow of oil from that area” (Seale 1967).

As argued by several recent oil historians (Garavini 2019; Vitalis 2020; Mitchell 2011), the so-called “OPEC oil embargo” of 1973 has been badly mischaracterized in most retellings, severely overstating the effects of the production cuts and targeted embargoes and understating the much broader context of long-planned price increases to counteract rapidly declining terms of trade as the US fought to shore up its hegemonic global position with the unilateral “Nixon shock” of 1971. However, concerted anti-OPEC politicking and shortage fears led to extreme panic buying, triggering an almost decade-long “mad chase” between spot prices and OPEC prices and contributing to widespread stagflation (Garavini 2019, 289–292). Although Canada was relatively insulated from oil supply concerns, it still relied exclusively on foreign imports to Quebec and Eastern Canada due to the National Oil Policy of 1961; further, protectionist efforts by the US to bolster its domestic oil industry had rapidly depleted its reserves, resulting in skyrocketing oil exports from Western Canada feared to imperil future security of domestic supply. 

It was within this spectacularly complex context of Global South sovereignty struggles that the Pierre Trudeau-led Liberal government inaugurated the Crown corporation of Petro-Canada in 1975 and the National Energy Program (NEP) of 1980. There were many core aspects to these expansive initiatives, including controlling prices and increasing Canadian ownership of the industry. However, arguably the most important shift was the federal state’s reorientation of oil exploration and production away from the Western Canada provinces — which it had long feuded with over resource politics — and towards the “frontier” regions of the Arctic and East Coast offshore. Although not explicitly stated, the frontier focus was to “shift activity to areas under federal jurisdiction,” with the NEP’s architects believing that “oil was too important a commodity to remain under provincial control” (Pratt 1985, 182). To achieve this, Petro-Canada was awarded “back-in rights” in the so-called “Canada Lands,” while frontier exploration was specifically well-incentivized,“ meaning that the government would spend “roughly $4 for every $1 the firm is able to invest” (EMRC 1980, 103). In conjunction with soaring oil prices, extremely lucrative federal incentives led to an explosion in offshore exploration and resulted in major oil discoveries such as Hibernia in offshore Newfoundland in 1979 and Amauligak in the Beaufort Sea in 1984.

By the time this photo was taken, the Liberal government’s energy policy was under tremendous attack from industry, the provinces, and US, while Dome Petroleum had only barely avoided debt-laden collapse due to a $1 billion bailout agreement signed by four major banks and the federal state. Global oil prices had also started to fall due to the “Volcker shock”-induced recessions, successful oil conservation measures, and the rapid rise of new oil supply from non-OPEC producers. The election of a right-wing government led by Brian Mulroney in 1984 led to the systematic dismantling of the NEP and eventually Petro-Canada. The deregulation of oil pricing via the “Western Accord” in 1985 was struck just before another global price collapse due to a drastic production increase by Saudi Arabia, resulting in a deep recession in Alberta, the eventual deathblow to Dome (which was bought up by Amoco Canada), and the evaporation of Arctic oil activities for decades to come. From start to finish, this era of oil exploration in the frozen North was inextricably connected with resource politics in the deserts and palm trees.