Nome’s New Race
Nome’s New Race – A small frontier port town strives to control its destiny as global maritime traffic drives its way.
Popularly known as the finish line for the Iditarod Sled Dog Race and a former gold rush capital of Alaska, the town of Nome will soon find itself the front line of a rush for new riches – the resources and opportunities of an accessible Arctic Circle.
Or not.
More than 100 years old, home to 3,808 inhabitants[1] and with January low temperatures averaging an inhospitable -2.8 °F[2], Nome has seen its share of booms and busts. Once home to a rough and tumble throng of gold prospectors numbering ten times its current population, it is a town both proud of its place in history and keenly aware of its vulnerability both to nature’s generosity and ferocity. Whether global climate change will prove a boon or detriment to the town remains to be seen, but Nome is not idly standing by and could soon find itself in a highly opportunistic position.
Situated midway up the Alaskan west coast at the approach to the Bearing Strait and just south of the Arctic Circle, Nome is positioned well to benefit from economic development in a region quickly becoming more accessible due to global climate change. With potential to develop as a resupply hub and tourist stop – and potentially a transshipment point or major base for emergency services – its opportunities are many and varied.
Port Development
Until last year, Royal Dutch Shell Corporation (Shell) planned to pursue natural resource extraction in Alaskan waters pending the outcome of explorative drilling in the Chukchi Sea. The anticipated increase in regional commercial maritime traffic due to this and other expected demands prompted and justified extensive U.S. Army Corps of Engineers (USACE) research which found that “the small number of existing [port] facilities is overwhelmed by increased natural resource extraction along Alaska’s western coast.”[3] This finding prompted further planning for development of a deep draft port and supporting facilities in Alaska. Of the sites considered, the Port of Nome was identified as an ideal location for this effort. In February of 2015, the USACE published a draft feasibility and environmental impact report describing an acceptable plan for deep-draft port development. This generated tremendous excitement in the town and spurred broad interest in the projects feasibility, impact potential and funding mechanisms.
Frustratingly for development advocates, Shell pulled the plug on its explorative efforts in late September, 2015[4] after finding insufficient resource reserves to justify further investment. While not the sole source of development incentive, this change in plans prompted a delay in federal government investment while a 12 month “pause” ensues to “monitor Arctic activities to determine if there may be the potential for federal interest in continuing the study.”[4] This is far from promising for Nome’s port development advocates.
Cruise Tourism
Just six weeks ago, Nome hosted the 1,070 passenger luxury cruise liner Crystal Serenity during its maiden Northwest Passage cruise.[5] A third of the passengers ventured ashore, where City officials welcomed them with open arms, cultural experiences and the opportunity to purchase locally crafted products.[6] However, whether due to bad timing or simple lack of an agreeable value proposition, profits were hard to come by for Nome’s businesses. This may have had more to do with the tastes of the clientele than the general appeal of Nome’s local offerings (cruise-only fares for the Northwest Passage transit ranged from about $22K to over $120K per person) [7] but failed to meet expectations nonetheless.
Infrastructure Demands
Recent large-scale investments in the Panama[8] and Suez Canals[9] have dramatically improved tonnage throughput capacity by enabling transit of more and larger ships. Until ports serving Arctic traffic are equipped to support significant traffic, use of the newly accessible waterway will remain limited and further delay cash inflows to the region. Further growth might be achievable if inland transportation infrastructure is developed as well, promoting Nome as not only a stop for ships and tourists but as a transshipment hub serving Canada’s rapidly thawing northern regions.
While Nome has yet to profit much from the nascent Northwest Passage cruise industry, it has time to learn and adjust. As with shipping port development efforts, infrastructure investment could contribute significantly to this end. Welcoming customer/passengers in a warm, comfortable and locally themed terminal could significantly improve their interest in partaking of what Nome has to offer. Customer research and marketing efforts could also go a long way toward helping local businesses understand this new category of clientele and generate customer interest as well.
Looking to the future
Given its unique location and reasonable expectation of future port expansion, Nome is on the cusp of something big. Rapidly changing ice patterns strongly favor the Arctic Sea as a near-term alternative for intercontinental shipping traffic and a newly accessible destination for tourists. But the infrastructure, messaging and coordination efforts must keep pace in order to meet demand.
WC: 792
[1] United States Census Bureau, “SUB-EST2015_2,” http://www.census.gov/popest/data/cities/totals/2015/files/SUB-EST2015_2.csv, accessed November, 2016.
[2] U.S. climate data, “Climate Nome – Alaska,” http://www.usclimatedata.com/climate/nome/alaska/united-states/usak0170, accessed November, 2016.
[3] US Army Corps of Engineers, Alaska District, “Draft Integrated Feasibility Report, Draft Environmental Assessment (EA), and Draft Finding of No Significant Impact (FONSI); Alaska Deep-Draft Arctic Port System Study,” February, 2015, http://www.poa.usace.army.mil/Portals/34/docs/civilworks/arcticdeepdraft/ADDMainReportwithoutappendixes.pdf, accessed November 2016.
[4] Alex DeMarban, “Work toward deep-water port in Alaska Arctic on hold Army Corps says,” Alaska Dispatch News, September 28, 2016, https://www.adn.com/arctic/article/corps-deepwater-port-us-arctic-hold/2015/10/26/, accessed November 2016.
[5] Crystal Cruises, “Mission Accomplished: Crystal Serenity Completes 32-day Northwest Passage Journey” http://legacy.crystalcruises.com/MediaCenter.aspx, accessed November 2016.
[6] Tyler Stup, “Crystal Serenity brought tourists, but little profit for Nome businesses,” KNOM – Alaska Public Media, August 30, 2016, http://www.alaskapublic.org/2016/08/30/crystal-serenity-brought-tourists-but-little-profit-for-nome-businesses/, accessed November 2016.
[7] Crystal Cruises, “Travel-Calendar,” Published Rates as of November 2016, http://www.crystalcruises.com/travel-calendar, accessed November 2016
[8] Canal de Panama website, no author attribution, “Panama Canal Expansion,” http://micanaldepanama.com/expansion/, Organization Website, accessed November 2016.
[9] Editor, “A bigger, better Suez Canal,” The Economist, http://www.economist.com/news/middle-east-and-africa/21660555-it-necessary-bigger-better-suez-canal, accessed November 2016.
Photo credit to iditarodtours.com
While climate change creates many economic opportunities, almost all of them are about suppressing it. It is interesting to see how climate change is actually a benefit to this small town. Given how much cargo is shipping from China to the United States, Nome seems primed to take advantage of perhaps the only tiny benefit of climate change. It will be interesting to see whether the town can raise the capital to establish itself as a commercial port and, more philosophically, if it is prepared to accept what cultural changes will inevitably come with such an influx of activity.
Really interesting post. I agree with you that the region could significantly benefit economically speaking from global warming. However, I am concern for the impact that an increase in visitors and shipping traffic would have on the bio diversity of the region. I would be interesting in learning how US regulations may protect the local bio-diversity and also help the local economy.
Very interesting to finally get a perspective on someone actually benefiting from climate change and melting ice mass. I am slightly concerned though about total welfare effects. Surely, it will be beneficial for Nome and also for the shipping industry, however I am worried that increased traffic and tourism will simply accelerate the change in ice patterns in the Arctic Sea. This again will open up new opportunities and new waterways, but this might become a vicious cycle. Looking now at total welfare effects also taking account environmental, social and ecological aspects this could turn into a quite disturbing development.
Hi Luke, thanks for providing a unique point of view from traditionally colder areas that have the potential to benefit (in some perverse way) from increased global climate change. I think I stand behind the goal of establishing Nome as a preeminent new town for intercontinental shipping through the Northwest Passage. On the other hand, I’m much more at odds with the argument that global climate change will prove a boon for tourism in the region. From my experience, tourism is fueled in large part by the possibilities of engaging with an authentic culture. The native inuits’ culture is directly influenced by the climate in which they’ve lived through the ages. Thus, it seems that a significant change in climate in Nome will divorce the native culture from the region, and consequently be more difficult to leverage as a tourist attraction.