CSIS forum: More cooperation needed to address Arctic challenges

More cooperation not just between government and the oil and gas industry, but with a broad range of residents and businesses inside and outside Alaska, is essential to address pressing infrastructure challenges there, speakers at a Center for Strategic and International Studies forum agreed.

“There’s not as much collaboration as there could be,” said Drue Pearce, a senior environment, natural resources, and government affairs advisor in Crowell & Mooring LLP’s Washington, DC, and Anchorage offices. “The oil and gas industry has its own Arctic spill response research program that government isn’t part of. Why?”

Not just the industry and government are working on spill response issues, she said. “Companies around the world are doing interesting things and should be included,” said Pearce, a former Alaska State Senate president and US Department of the Interior official.

Facilities for such research are being built already at the University of Alaska at Fairbanks, she noted.

DOI—particularly the US Bureau of Safety and Environmental Enforcement—should collaborate more with the industry because the agency already has conducted significant spill prevention and mitigation research independently, suggested Carol Lloyd, an engineering vice-president at ExxonMobil Upstream Research Co.

“We need to do Arctic response tests, but it’s hard to get permits,” she said. Working with Canada also should be considered, said Lloyd, who was a major participant in the preparation of the National Petroleum Council’s recent report on realizing the potential of Arctic oil and gas resources (OGJ Online, Mar. 27, 2015).

Missing infrastructure

Paula Gant, the deputy assistant US Energy secretary for oil and gas who also worked on the NPC report, said Arctic resource development policy decisions will need to be made “with our children in mind.” The extensive natural gas pipeline system that already existed in the Lower 48 states as unconventional gas production blossomed is largely missing from Alaska, along with ports, roads, bridges, and other basic infrastructure, she said.

“Building a natural gas pipeline and ensuring the Trans-Alaska Pipeline System’s future are leading parts of the debate in Alaska,” Gant said. While DOE’s research so far has focused primarily on spill prevention, developing the capacity to effectively respond if a well loses control will be essential, she said.

Many Alaskans participated in the NPC study’s preparation and will be part of the delegation when the US formally assumes the Arctic Council’s chairmanship on Apr. 24, Pearce said. The recently created Arctic Economic Council also will be meeting to consider whether public-private partnerships can help finance infrastructure development and improvement in the US Far North, she said.

Other emerging priorities include creating stable and predictable regulatory frameworks, establishing strong market conditions among Arctic nations, facilitating knowledge and data exchanges between industry and academia, and using traditional indigenous knowledge, stewardship, and small business more extensively, Pearce said.

While logistics and infrastructure pose significant challenges in the Arctic, exploration needs are lower, as shown by Shell Offshore Co.’s plans to bring its own response equipment when it starts drilling its Alaskan offshore leases, Lloyd said.

Pushed into two seasons

“If you look at most oil and gas accidents in Alaska, most have involved transportation, not exploration and production,” said Pearce. Alaska’s offshore drilling season officially is 110 days, but actually is only about 79—one day short of the 80 days it takes to complete and fully test an exploratory well, she said. “BSEE’s proposed regulations would push E&P into two seasons, requiring more transportation and increasing accident risks,” she said.

In introductory remarks, US Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) noted that finding ways to pay for developing the necessary energy infrastructure in Alaska should be a national priority involving multiple agencies across government.

“I have pressed Cabinet officials about where their priorities are, and how they plan to come together to address these challenges,” she said. “We want to ensure benefits flow to the people who live in the Arctic.”

Murkowski said she has introduced legislation that would provide shares of federal revenue from offshore oil and gas production to Alaskans similar to what already exists along the US Gulf Coast. “The people there want a level of development that generates benefits while managing resources to protect subsistence living,” she said. “There are serious accommodations going on already.”

She said she considers it essential to engage more of the country in discussions of ways to address the US Arctic’s potential because it’s a national, and not just a regional, concern. “My primary concern of the Obama administration’s Arctic policy is that it wants to stop resource development,” Murkowski said.

“Those who would do this would have the Inupiat move back into their igloos and collect driftwood from rivers to hear their homes,” she said. “There’s an irony in limiting someone’s economic opportunities supposedly for their own good.”

Contact Nick Snow at nicks@pennwell.com.

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