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Arctic Energy Center Weekly Roundup 6/10/16-6/17/16

AEC, In the News, Weekly Voices



     This Week on AEC

In the News

Associations, others ask BOEM to keep Arctic in 2017-22 OCS plan. Oil & Gas Journal. Former US Sec. of Defense William S. Cohen and 13 other national security experts also called upon BOEM to move ahead with the planned lease sales for the Beaufort and Chukchi seas. “The strategic significance of the Arctic is growing due to rapid change in the physical and geopolitical environments. Excluding the Arctic from the program would harm our ability to protect our interests and to promote cooperation in the region,” they said in a June 16 statement. Human activity will increase in the Arctic as the region becomes more navigable, they observed. “Since Arctic sea routes cut transit distances between Asian, European, and North American markets, shipping in the region will increase along with associated logistical infrastructure,” said the group, which also included retired military and US Coast Guard commanders. ” Their comments came a day after US House Permanent Select Committee on Intelligence Devin Nunes (R-Calif.) introduced a resolution that would keep the Beaufort and Chukchi sales in the 2017-22 OCS plan. “Canceling the Arctic lease sales would be a self-defeating action that would not have the slightest effect on global warming,” Nunes said. “It would merely surrender the development of Arctic energy to rival nations like Russia.”
Generals vs. scientists on offshore drilling. Bloomberg. The administration’s proposed 2017-2022 leasing program tentatively schedules 10 Gulf of Mexico lease sales, one in Alaska’s Cook Inlet and two in U.S. Arctic waters. Hundreds of thousands of comments have already been filed on the proposal. The former military leaders — including six who served under Obama — insist Arctic oil development is a matter of national security. Melting sea ice means more shipping, offshore energy development and military activity will occur in the region, with or without the United States, said the generals, admirals and former U.S. Secretary of Defense William S. Cohen. Private investment in Arctic infrastructure — such as work that would be done by oil companies — is important to ensure a vigorous U.S. presence, especially while China and Russia waste no time building new ice breakers, sailing new sea routes and putting airfields in the Arctic, they say.
Military Brass Tells Obama, Move Forward On Drilling, Never ‘Retreat’. The Daily Caller. Several former top military officials are pushing the Obama administration to push forward on oil and gas drilling in the American Arctic, while green activists and climate scientists express concern about the region’s beluga whales. Former Defense Secretary and former Republican Sen. William Cohen argues that halting the plans to drill would decimate the country’s “ability to protect our interests and to promote cooperation in the region.” Cohen was among 16 foreign policy specialists and military men who signed a letter to Obama suggesting that drilling was a crucial component to a sober foreign policy. “Keeping the Arctic in the program maintains our options; exclusion irreversibly eliminates them,” the experts noted, referring to their belief that excluding drilling for 5 years hurts the U.S.’s ability to conduct environmental research in the area. The group’s letter was in response to the Bureau of Ocean Energy Management’s proposal to allow oil and gas leasing in 2017-2022 in the offshore Arctic and the Gulf of Mexico, which would allow the government agency to lease contracts to drill in the Beaufort Sea.
Republican prods Obama with Arctic resolution. Washington Examiner. A California Republican offered a gentle reminder to the Obama administration not to backtrack from its plan to open the Arctic to drilling. Rep. Devin Nunes introduced a non-binding resolution encouraging the Arctic leases just as the Obama administration begins finalizing its five-year energy plan for granting leases for offshore drilling. "We won't achieve energy independence by blocking development of our most promising energy resources," Nunes said. "Canceling the Arctic lease sales would be a self-defeating action that would not have the slightest effect on global warming — it would merely surrender the development of Arctic energy to rival nations like Russia." Nunes said even though the proposed plan opens the Arctic to drilling on the outer continental shelf, he fears the administration will pull the leases to appease environmentalists.
Energy Brief: Senate Appropriations to Vote on Interior, Environment Spending Bill. Morning Consult. Rep. Devin Nunes (R-Calif.) introduced a non-binding resolution to encourage Arctic drilling leases as the Obama administration works to finalize its five-year energy plan for offshore drilling leases. Nunes said he worries environmentalists will convince the administration to pull leases in the region even though arctic leases won’t have “the slightest effect on global warming.”
Arctic drilling debate flares up again. Houston Chronicle. Now, the Obama administration will decide whether the potential benefit to U.S. energy security outweighs both its commitment to reduce the country's carbon emissions and the potential risk of an oil spill in what are perhaps the country's harshest and most remote waters. Since Interior Secretary Sally Jewell announced in March that lease sales along the Atlantic coastline were off the table, attention has shifted to the Arctic as energy industry trade groups and environmentalists try to sway the White House. That has sparked concern among oil companies operating in Alaska that their opportunity to drill off northern Alaska could be finished. For now, lease sales are scheduled in 2020 and 2022 for fields off Alaska's Arctic coast in the Beaufort and Chukchi seas. But those lease sales remain under review. Even if approved, the administration has warned that development and operations would be under strict oversight from government inspectors to ensure minimal danger to Arctic wildlife.
Industry pushes against US offshore lease cuts. Upstream (sub req’d). In comments submitted to the US Bureau of Ocean Energy Management, organisations including the American Petroleum Institute, the Independent Petroleum Association of America, and the National Ocean Industries Association, asked the agency to keep the proposed programme as it is, with no other areas to be removed from leasing consideration. "Considerable acreage has already been excluded in previous stages of the planning process, especially in the Atlantic, eastern Gulf of Mexico, and Alaska OCS," the groups said. The proposal also includes 10 potential leases in the US Gulf of Mexico and three potential ones in the Arctic. However, the administration has said it might consider the possibility of no new Arctic leases. The subject of expanding offshore exploration has emerged as a political issue,with lawmakers and green groups also sounding off on the issue.
As comment deadline approaches, military leaders weigh-in on Arctic lease sales. KTOO. More than a dozen former military leaders jumped into a fight over offshore drilling in the Arctic yesterday, asking the Department of the Interior to allow lease sales in Alaska’s Arctic. The deadline is Thursday for groups to weigh-in on the interior department’s plan. The military leaders say the U.S. is lagging behind other nations and could lose its economic and political foothold in the resource-rich region without new investments. Gen. Joseph Ralston, formerly of the U.S. Alaskan Command, joined 15 other military veterans, and a former Secretary of Defense, asking for the Arctic leases to be kept in the plan. It covers the next five years. “The idea that we would somehow take leasing from the Chukchi and the Beaufort Sea off the table while Russia is investing heavily, while Norway is drilling, while Canada will be drilling, just does not make sense from a national security perspective,” Ralston said.
National security experts weigh in on Arctic offshore energy development. World Oil. On the eve of the conclusion of the Department of the Interior’s public consultation on its proposed Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022, a group of foreign policy and national security leaders have submitted formal comments for the record in support of retaining the two Arctic leasing areas in the final program. The 58-star letter, which includes former Secretary of Defense William Cohen and former Supreme Allied Commander and Vice Chairman of the Joint Chiefs of Staff General Joseph Ralston, as well as 14 former high-ranking military officers with firsthand experience overseeing Arctic operations, stresses that excluding the Arctic would jeopardize America’s ability to protect its interests.
Interior Department hears conflicting cries over offshore Arctic drilling. Alaska Dispatch News. Opposing forces are pressing the U.S. Department of the Interior over the Obama administration's latest proposed offshore drilling plan, with each saying the fate of Alaska's Arctic rests in the balance. In one letter, 16 high-ranking military veterans pointed to the strategic significance of the Arctic, urging the Obama administration to consider the region's security needs and how private infrastructure investments could aid the White House, Defense Department and Coast Guard in terms of "cost, resources and expertise." "Keeping the Arctic in the program maintains our options; exclusion irreversibly eliminates them," they wrote. The letter included signatures from former Vice Chairman of the Joint Chiefs of Staff Gen. Joseph Ralston and several former heads of the Alaskan Command. That echoes what Alaska's congressional delegation said last month, as they urged the administration to keep the three lease sales in the program. "A renewed emphasis on offshore leasing can and must serve as the first step towards a workable regulatory regime for the Alaska OCS (outer continental shelf," they wrote in a letter.
Arctic oil, gas leases get support from new bill. World Oil. Congressman Devin Nunes (CA-22), chairman of the House Permanent Select Committee on Intelligence, has introduced a bill in the House of Representatives encouraging the Department of the Interior to advance its plan to sell two leases for energy development in the Arctic. The Arctic lease sales are included in the Department of the Interior’s draft plan for its 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program. However, after canceling the draft plan’s approval of new drilling in the southeast Atlantic Ocean, the Obama administration has come under pressure from environmental activists to scrap the Arctic lease sales in an effort to fight global warming.
Comments reveal fierce debate over Interior leasing plan. E&E News. The Interior Department received almost 200,000 public comments by yesterday's deadline on its five-year oil and gas leasing plan, reflecting passionate views on whether the agency should allow new offshore drilling in the Arctic. Interior's Bureau of Ocean Energy Management has found itself in the middle of a polarizing debate over whether its 2017-22 oil and gas leasing program should keep three new leases off Alaska's shores. The plan -- expected to be finalized by the end of this year -- also includes 10 leases in the Gulf of Mexico. The public comment period ended at midnight. Sixteen foreign policy and national security experts -- including former Secretary of Defense and former Sen. William Cohen (R-Maine) -- also submitted comments arguing that the Alaskan leases should be kept in the plan to ensure the United States can protect its interests as countries like Russia and China increase Arctic activity.
Mail Call! Arctic Drilling Edition. Politico Pro Morning Energy. The Interior Department stops accepting public comments today on its proposed offshore drilling plan for 2017-2022, and boldfaced names on both sides of the debate took the opportunity to sound off on whether to include Arctic leases when the final edition is released later this year. William Cohen, a Republican who served as secretary of defense for Bill Clinton, top-lined a letter with 15 other high-ranking military veterans that urges Interior to consider the "strategic significance" of drilling for oil and gas the Arctic. "Excluding the Arctic from the Program would harm our ability to protect our interests and to promote cooperation in the region," they write.
Alaska News Nightly: Former military leaders fight on the side of lease sales in the Arctic. Alaska Public Media. More than a dozen former military leaders jumped into a fight over offshore drilling in the Arctic yesterday, asking the Department of the Interior to allow lease sales in Alaska’s Arctic.
Group Pushes to Keep Lease Sales in Alaska. (VIDEO) NBC Channel 11. A coalition of groups representing thousands of Alaska workers today sent a letter urging the Obama administration to retain three planned lease sales in Alaska's outer continental shelf in the final version of the next five-year offshore leasing program. The letter says the proposed oil and gas lease sales are critical to the future economic prosperity of Alaska, and to the nation's energy security. Signers of the letter wrote "As an Alaskan coalition that represents tens of thousands of Alaskan jobs, we cannot overstate how critical access and development of the Arctic O-C-S is to the future health of the Alaskan economy and, ultimately, to the well-being of its citizens.
Russia Launches World's Biggest, Most Powerful Icebreaker. NPR. Russia launched the world's biggest, most powerful icebreaker in St. Petersburg on Thursday. The Arktika is 568 feet long and powered by two nuclear reactors. It can break through ice 13 feet thick, NPR's Mary Louise Kelly reports. The ship was finished early, ahead of its planned 2017 launch, according to Sputnik News and the shipyard where the Arktika was built. "She is one of several new icebreakers planned for Russia's growing fleet — a fleet already bigger than all other countries, combined," Mary Louise reports. "Russian interest in the Arctic is rising, as global warming opens up shipping routes and access to mineral resources." In addition to launching new icebreakers, Russia is building new bases in the Arctic Circle and modernizing its nuclear submarines.

Weekly Voices

Distinction With A Difference: Arctic Lease Sales Should Go Forward. (Op-ed by Lucas Frances – Arctic Energy Center) Breaking Energy. Arctic oil and gas development will also strengthen American leadership on the world stage both in the short run, by establishing our presence in the region, and in the long run, by ensuring that the country’s energy needs will continue to be met by our own homegrown resources. With oil and gas production in the Lower 48 expected to decline in the coming decades, America risks renewed dependence on other countries for energy unless another major domestic resource – much like those in Arctic waters – is tapped. But if these resources are to be available when they are needed most, they have to be explored now, and companies have to be allowed to bid for that opportunity. The significance of giving industry the option to bid for the opportunity to explore the resource potential in the Arctic goes far beyond the logistics of leases and bids. Indeed, the security of our nation hangs in the balance, and keeping the door open for Arctic offshore oil and gas development will help keep America safe and secure today and for the generations to come.
The Arctic is essential to Interior’s oil and gas program. (Op-ed by Kara Moriatory- AOGA) The Hill. The first step in making Alaska’s offshore energy a reality is to include Arctic OCS lease sales in the next round of the Department of Interior’s Five-Year Plan.  It gives us the option to consider these areas in the future, and to assess the value of these resources when energy needs and economic realities come into play.  Disregarding this flexibility is to ignore the energy realities that make our homes in Alaska and across the country, safe and warm.  Indeed, including the OCS Arctic region in the new leasing Plan lays a strong foundation for America’s energy future.
A way out of Alaska's fiscal hole. (Op-ed by Margo Thorning – American Council for Capital Formation) The Hill. Complete cancellation of the OCS leases in the Arctic region would be a devastating blow to energy resource development — a pillar of Alaska's economy — and would affect any Alaskan in, or connected to, the oil and gas industry. Over one-third of Alaskan jobs are tied to the industry, which supports 110,000 jobs and $6 billion in public and private sector wages (accounting for 89 percent of the state's unrestricted revenue stream). It should be noted that no presidential administration has completely rescinded prior decisions on leasing areas. Alaska is already feeling the pinch of declining oil and gas production. And it's not just affecting those who work in the industry. Neal Fried, an economist with Alaska's Department of Labor, recently told a local television station that the oil sector in Alaska lost around 2,300 jobs — a 20 percent loss — between April 2015 and April 2016. Fried noted, "those oil industry jobs pay [two-and-a-half] times the average. When those jobs are lost, you lose other jobs, whether it's in retail, other services, you name it, those can be felt throughout the economy."
Protecting Alaska's Economic And Energy Future. (Column by Brigham McCown) Forbes. The Department of Interior released the draft proposal for the nation’s OCS Oil and Gas Leasing Program for 2017-2022. The draft was released through the Bureau of Ocean Energy Management (BOEM) in March. Under the proposed plan, the Arctic Program considers three potential lease sales; the Chukchi Sea, Beaufort Sea, and Cook Inlet. Yet, there is concern by some Alaskans the Obama administration may yield to pressure from environmental lobbyists, removing the Arctic leases from the final plan, ultimately hurting the Alaskan economy. These fears are not unfounded, as similar proposed lease sales for the Atlantic were cancelled in 2015. With more than one-third of Alaskan jobs directly tied to the oil industry—roughly 110,000 jobs and $6 billion in public and private sector wages—the benefits of developing OCS resources in this region cannot be ignored. According to a University of Alaska Anchorage study, 54,700 new jobs would result from OCS development. These opportunities particularly impact Alaska’s native groups, who remain dependent on the oil and gas industry.
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