Understanding regional heterogeneity in energy systems and energy affordability: A polar paradox in Arctic Alaska

Abstract

Fossil fuel extraction plays a major role in Alaska's economy, with taxes and royalties paid by oil producers contributing significantly to revenue at the state and local levels. This dependence on the fossil fuel industry leaves the state and its communities vulnerable to global and regional changes in energy prices. Meanwhile, remote communities in Arctic Alaska face persistent residential energy insecurity due to high fuel prices despite the state's fossil fuel wealth, exemplifying a “polar paradox”. Here, we use a multi-scale framework, which leverages a global, integrated, multi-sector model with U.S. state-level details to analyze how global drivers cascade down to affect local residential energy security under future scenarios. Using the North Slope and Northwest Arctic Boroughs as case studies, we show regional heterogeneity in the two boroughs and how it affects community-level residential energy security outcomes under global drivers. Our analysis takes into account the effects of temperature changes on heating needs and the dynamic response of future residential heating demand given affordability. We find that a global energy transition could have major implications for future Alaska petroleum revenue and local energy affordability. Additionally, the cascading impacts on Arctic Alaska communities could be heterogeneous given differences in existing energy portfolio and subsidies. The multi-scale framework we apply offers a transferable approach for understanding how global energy transitions and environmental change generate differentiated impacts at the local level, with broad relevance for fossil-dependent regions navigating uncertain futures.