The Polar Adventure Tanker Valdez, Alaska. Source: ConocoPhillips. 

ConocoPhillips (NYSE:COP) is out with some pretty big news this week. The oil company confirmed that it recently shipped out the first tanker of crude oil from Alaska that wasn't destined for refineries along the U.S. West Coast. Instead, its Polar Discoverer tanker is making its way to South Korea, marking the first oil exports from Alaska in a decade. It's important news for the oil company's plans in Alaska.

The rise and fall of Alaskan oil

Oil exports in America have been banned for nearly 40 years as a result of the Arab oil embargo. However, oil from Alaska is one of the few exceptions. The state has been allowed to export its oil since 1996, though producers haven't exported any oil since 2004, as most of its oil is shipped to the lower 48 states.

California has long been the main destination for Alaskan crude oil. That was until the shale boom sent oil production in the lower 48 states higher, so that now, Alaskan oil is being pushed out by cheaper crude oil from North Dakota, which is arriving by rail car. This caused Alaska's share of the California oil market to fall from 41% in 1996 to just 11% this year.

The other big reason Alaska has lost market share in California is because the state is simply not producing as much oil as it had been. At its peak in 1988, Alaska was producing 2.1 million barrels of oil per day, however, production has dwindled to around 525,000 barrels of oil per day. Meanwhile, oil production from North Dakota's Bakken shale surged from less than 200,000 barrels per day in 2007 to a record of well over a million barrels of oil per day this year, as the following chart shows.

Source: U.S. Energy Information Administration.

Alaskan oil looks to rise again

Alaska recently took a big step forward to reverse its declining oil production. The state passed the "More Production Alaska" Act in 2013 to reverse a progressive tax system that the industry said was making it unappealing to invest to grow oil production in the state, as higher profits could be made elsewhere. That law was upheld this year after some in the state wanted to see it repealed.

With the new tax structure firmly in place, oil companies like ConocoPhillips and BP plc (NYSE:BP) have been increasing their investments, which are geared to push production higher in the future. ConocoPhillips has doubled its capital spending in the state over the past two years, while BP is planning billions of dollars in new capital investments in the state in order to boost production. The growing issue now is that this oil won't have anywhere to go if it doesn't head outside of North America. ConocoPhillips is now ahead of the game since it is already finding new markets for its oil.

Investor takeaway

Right now, Alaska actually has a unique competitive advantage over places like Texas and North Dakota given that it can legally export oil. While that competitive advantage might not last long given the growing call to lift the oil export ban across the U.S., it is an advantage ConocoPhillips is cashing in on by being among the first to get its oil moving overseas. However, being a first mover could help both ConocoPhillips and Alaska extend that competitive advantage if the U.S. opens up all oil to exports. 

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