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Arctic Energy Center Weekly Roundup 8/12/16-8/19/16

This Week on AEC, In the News, Weekly Voices


August 12- August 19, 2016

This Week on AEC


In the News

BOEM director hears support for OCS drilling in Alaska. Alaska Journal of Commerce. U.S. Bureau of Ocean Energy Management Director Abby Hopper got an earful in Alaska last week. Hopper met with Gov. Bill Walker, the state’s congressional delegation and representatives of Arctic communities — all urging that Arctic offshore lease sales be included in the next five-year Outer Continental Shelf leasing schedule. In her meetings last week Hopper said she was struck by strong support for offshore sales from Arctic Inupiat Offshore, a consortium of Alaska Native corporations in Arctic coastal communities. “They told me that responsible oil and gas development is important in maintaining their traditional way of life,” she said, which requires, these days, economic activity and cash-paying jobs. “Oil and gas development has brought many benefits to their communities including water and sewer, roads and other infrastructure,” Hopper said she was told, although the reference was to onshore, not offshore, industry activity. Hopper also met separately with Arctic Slope Regional Corp., the Native regional corporation for the North Slope. In her meetings with the state’s two U.S. Sens. Lisa Murkowski and Dan Sullivan, Hopper got a similar message.


Keep Alaska sales in 5-year OCS plan, Murkowski urges BOEM director. Oil & Gas Journal. US Sen. Lisa Murkowski, (R-Alas.), strongly urged US Bureau of Ocean Energy Management Director Abigail Ross Hopper to preserve all three oil and gas lease sales proposed for Alaska when BOEM finalizes its 2017-22 US Outer Continental Shelf program. The senator’s request came during an Aug. 12 face-to-face meeting in downtown Anchorage, as Hopper neared the end of a week-long Alaska tour. “I stressed to Director Hopper that Alaska must be allowed to develop its resources, especially in the Arctic,” Murkowski said. “Offshore development is one of the best ways we can create jobs, generate revenues for our state treasury, refill our Trans-Alaska Pipeline, and protect our nation’s long-term energy security.” She said, “From our vast resource potential, to our long history of safe production, to overwhelming support from Alaskans, this administration has every reason to make the right decision and keep our lease sales in the offshore program.” Murkowski chairs the Energy and Natural Resources Committee.


Federal offshore oil-lease chief visits Arctic Ocean, says development can be safe. Alaska Dispatch News. A visit to two Alaska offshore oil fields and meetings with industry and state representatives has affirmed to the head of the federal offshore leasing agency that oil can be produced safely in federal waters of the U.S. Arctic Ocean. But how the five-day trip might inform Abigail Ross Hopper's recommendation about another big topic — whether the proposed Bureau of Ocean Energy Management lease sales should be held in the U.S. Arctic Ocean in 2020 and 2022 — Hopper wasn't saying. Hopper said she'll make that recommendation to Interior Secretary Sally Jewell, who will make the final call. Alaska officials seeking more oil production to help recharge dwindling state savings and the trans-Alaska oil pipeline fear Jewell will strike the lease sale from the final draft of the offshore drilling plan for 2017 to 2022, something many expect to be released by the end of the year. Such a move would further delay industry's hopes of tapping into the potentially oil-rich outer continental shelf. Hopper's visit did not involve any meetings with conservation groups. On the agenda Friday was a private meeting with Sen. Lisa Murkowski, R-Alaska, who has repeatedly pressed for the Arctic offshore lease sales to remain in the final plan. In May, Murkowski criticized Hopper for favoring drilling opponents following a statement on Hopper's Twitter account for which she has apologized.


Performance versus prescription in new US Arctic rules: Fuel for Thought. Platts S&P Global. In its new rules for oil and gas drilling in the Arctic, the US has taken the biggest step yet toward a performance-based system that sets clear standards, but allows industry flexibility in how to meet them. That’s a big difference from most US offshore regulation, which is prescriptive in nature, specifying in almost minute detail how operators must comply and leaving little room for deviation. It’s an important development, both in the evolution of offshore safety since the devastating 2010 Deepwater Horizon disaster, and in how regulators approach an industry that is using more complex technology to tackle increasingly dangerous frontier environments. Performance-based rules require a regulator staffed with sophisticated engineers who can evaluate new technologies to be sure they meet or exceed the safety standards. In this system, much of the heavy lifting is done upfront, before the well is ever spud, whereas the more traditional prescriptive system relies more heavily on inspectors checking for compliance after the fact. It costs lots of money to attract that sort of talent. Congress has given BSEE the authority to pay salaries that exceed normal government limits. But retaining that talent is always a challenge.


Weekly Voices

Environmental organizations bring a self-serving interest to Arctic Alaska. (Op-ed by Wainwright Mayor John Hopson Jr.) The Hill. It is disappointing that the longevity of my people and the success of our region are secondary to the preservation of our wildlife and pristine Arctic environment. The Iñupiat have been stewards of our region for thousands of years and understand that a healthy ecosystem and a sustained North Slope economy are both necessary for our continued survival. We are capable of managing activities in our region and environmental groups should not usurp our voice for their own agendas. We are intelligent, adaptive and resourceful people with the capacity and right to engage in all policy decisions affecting our well-being. I ask that policy makers fully integrate Iñupiat values and priorities into their agendas. I further ask that, in an attempt to protect our region, special interest groups not jeopardize our existence by eliminating our economy for the sake of theirs. I refuse to allow outside environmental groups to throw away our region’s economic potential or for the Iñupiat people themselves to become the endangered species. Cultural preservation and economic sustainability are not mutually exclusive, but instead require balanced policy. It is my hope that in the future the Iñupiat people will no longer be utilized for anyone’s agenda. It’s time that we stand up to outside interest groups and fight for what’s right for our people, our culture and our communities.


Zukunft: U.S. needs more icebreakers to keep watch in Arctic. (Op-ed by Adm. Paul F. Zukunft - Commandant of the U.S. Coast Guard) .Alaska Dispatch News.  It was great to be back in Alaska last week to recognize Coast Guard men and women who have performed acts of heroism in The Last Frontier. A Coast Guard presence in Alaska is a natural complement to the enterprising and adventurous spirit of Alaskans. As we celebrate the Coast Guard's 226th anniversary, it is fitting to reflect that the Coast Guard has been present in Alaska from its start.  In 1867, when we purchased the territory, it was the Revenue Cutter Lincoln that carried the U.S. delegation to Sitka for the transfer-of-power ceremony. We were here then and we need to be here now. Yet, the Coast Guard's heavy icebreaker inventory – our entire national capability – is left to just a single operational vessel, Coast Guard Cutter Polar Star. This year, the ship turned 40. Polar Star is the only ship in service with the power and icebreaking capability required for assured year-round access to both the Arctic and Antarctic regions. In more certain terms, the U.S. is one engineering casualty away from being unable to protect national interests, preserve our sovereignty and respond in the polar regions.


The harsh reality of Russia's influence on Alaska's offshore exploration. (Op-ed by Guy Caruso – former U.S. Energy Information administrator) Washington Examiner. Thanks to technological advancements, like Russia's creation of the world's largest icebreaker Arktika, oil and natural gas reserves beneath the Arctic waters are easier to access than ever before. As a result, the Arctic now has countries racing to emerge as leaders in the world's newest Great Game. But as major powers struggle not only against each other, red tape, legal hurdles and other challenges back home are causing the United States to lag behind in unlocking the Arctic's riches. In a recent move, Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management Director Abigail Ross Hopper announced a new approach to oil and gas leasing for offshore areas. The proposal, which until recently accepted comments from the public, includes one possible sale each in the Alaskan Chukchi Sea, Beaufort Sea and Cook Inlet planning areas and, unfortunately, it also includes the possibility of no new leasing off of Alaska's shores altogether — to the detriment of U.S. energy security. Not only would this possibility be harmful to Alaska's economy, but it could harm U.S. downfall energy security as other countries, like Russia and China, stake their claim in the Arctic.


© 2016, AEC All Rights Reserved. 


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