Since the Arctic whaling days of the 1850s, profits on oil from Alaska's north have fattened the wallets of the global merchant class. The source of the oil changed with the times, but it has continued to flow to the benefit of both commerce and government.

Photos by U.S. Coast Guard and Stephen Nowers

Wednesday: Will the Gulf oil spill slow offshore plans in Alaska's Arctic?

Coming Friday: Déjà vu all over again

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The crude that replaced whale oil set the stage for a boom that ran, with some ups and downs, from the mid-1970s into the 21st century. Oil production on the North Slope peaked in 1988, with about 2 million barrels a day. That boom is fading now, the volume of oil running through the trans-Alaska oil pipeline falling to about 675,000 per day. And yet many believe there are vast new oil riches waiting just offshore beneath the waters once roamed by the Nantucket whalers -- if companies are allowed access, and if they can find a way to get the oil out without harming the environment.

An ugly and growing oil leak associated with the explosion and sinking of the Deepwater Horizon oil drilling rig in the Gulf of Mexico last week has raised questions about the latter while providing new leverage to environmentalists and North Slope residents who've long tried to block the former.

Opponents of offshore drilling in the Arctic say it is not worth the risk. But the Minerals Management Service, which regulates offshore oil development in federal waters, believes the potential rewards cannot be ignored. MMS estimates oil fields buried beneath the seabed off Alaska's northern and northwest coasts could hold 27 billion barrels of crude -- more than Prudhoe Bay when it was discovered. About 12 to 15 billion barrels is believed to be in the Chukchi Sea, 350 miles west of oil development now clustered around the Sagavanirktok River delta near Prudhoe Bay.

Alaska political leaders say the oil needs to be developed if Alaska is to survive. Crude does more than just grease the gears of the Alaska economy; it is the gears, funding up to 90 percent of the state's budget through taxes, royalties and fees.

Before the Deepwater Horizon accident, there was growing optimism about new oil development in Alaska. Both the Chukchi and the waters off the mouth of the Sag are expected to see significant new oil activity in the coming months. But by Wednesday afternoon, five days after the Deepwater Horizon erupted in flames, the incident was among the topics of discussion at an afternoon meeting with the State of Alaska about Shell's 2010 exploration plans for the Chukchi Sea, said Joe Balash, a special assistant to Gov. Sean Parnell.

"There is nothing like what happened last week to cause you to want to double check on things," Balash said on his way to the meeting.

Specifically, he said, the state wanted more information about the individual drilling locations, how the Alaska operations are similar or dissimilar to those in the Gulf of Mexico, and what cleanup vessels and equipment will be standing by, ready to go on a moment's notice in the event of a problem as oil development heats up in the Arctic.