Russia Suspends Arctic Licenses, U.S. Debate Continues


By MarEx 2016-09-12 19:17:35

The Russian government has declared a moratorium on the allocation of offshore licenses in the Arctic, just as a call comes to strengthen U.S. plans in the region.

"In light of macroeconomic instability, the government has declared a moratorium on the allocation of new offshore license areas in the Arctic," said Russia’s Natural Resources Minister Sergei Donskoi Donskoi last week at a meeting between President Vladimir Putin and government members.

The moratorium is expected to allow mining companies to focus on the implementation of their prior commitments and would optimally redistribute funds towards exploration projects.

Environmental group WWF-Russia has issued a statement saying it has long advocated for such a moratorium, collecting over 80 thousand signatures from supporters. The 10-year moratorium, says WWF, will allow Russia to redirect financial support for risky offshore Arctic development to less environmentally hazardous projects on land. 

"Russia’s decision comes at a time when our own government is poised to make important decisions about the future of the U.S. Arctic. The Obama administration can and must similarly show leadership in safeguarding our Arctic waters from the risky prospect of drilling," says Margaret Williams, managing director, WWF-US Arctic program.

U.S. Under Pressure

The news from Russia comes as a coalition of groups unveil a new broadcast, print and digital advertising campaign calling on the Obama administration to keep intact the Arctic leasing areas currently contained in the Interior Department’s draft proposed plan.  

The draft program, revealed in March, allows for the possibility of lease sales to be held for federally controlled tracts in the Beaufort (2020) and Chukchi (2022) seas. But activist groups continue to wage an aggressive campaign to have those areas removed from the final schedule.

The Arctic Coalition, a group of 20 organizations representing Alaskan Native communities, labor unions, higher education programs, industry and others, is launching the new campaign in direct response to activists’ efforts, using the platform to articulate the essential role that oil and gas development plays in the Arctic and the importance of ensuring that it is included in the final leasing program.

The six-figure television buy will run for one week in the Washington D.C. media market starting on September 12 and could be extended from there.

Jeff Eshelman, Senior Vice President for Operations and Public Affairs at the Independent Petroleum Association of America and a member of the Coalition, said, “Earlier this month the Wilderness Society became the latest to argue that industry’s ‘exit’ from the Arctic is proof that including the region in the offshore leasing program would be costly and unnecessary.

“Quite aside from the skewed logic of arguing that companies will never again be interested in developing the Arctic based on today’s commodity price, the idea that we’re not interested in the Arctic simply isn’t true. Today industry retains over 40 offshore leases in the Arctic and continues to invest millions of dollars into research into oil spill response and preparedness and other areas. This campaign is further proof that industry is fully committed to responsible offshore development in the region.”

Kara Moriarty, President and CEO of the Alaska Oil and Gas Association, echoed Eshelman’s comments. “The breadth of Alaskan organizations that have come together, 16 in total, demonstrates the importance of this issue to our state. Despite repeated claims to the contrary by environmental groups, Alaskans overwhelmingly support oil and gas development in the Arctic offshore.

“Without the lease sale option, there is simply no prospect of future investment in the infrastructure which we need. I can’t stress this enough; taking lease sales off the table now sends a clear message that the federal government is hanging a ‘closed for business’ sign on our state, at a time when we are already facing huge budgetary challenges. The Administration must think about what impact this will have on Alaska.”

Eshelman continued, “The oil and gas industry’s impact on the economy of the Alaska is well known. What is less well understood is the crucial role it plays in supporting homeland security in the Arctic, so this is a theme that the adverts really emphasize. As the comments by Secretary Cohen, General Ralston and others make clear, private sector enterprise, specifically oil and gas development, is a critical pre-requisite to our national defense. We really shouldn’t be needlessly throwing it away, especially at a time of increasing international tension in the region.”

The imperative of America’s presence in and commitment to the Arctic has grown in prominence in recent weeks. In addition to the comments submitted to the Department of the Interior by former Defense Secretary William Cohen and others, a second group of foreign policy experts, led by a former National Security Advisor to President Barack Obama, General James L. Jones, issued a statement in July arguing that the United States “has not built the presence required to maintain regional security and stability” and “is at risk of being eclipsed by other Arctic states for access and influence.”

Earlier in the summer, the Chairman of the House Permanent Select Committee on Intelligence, Rep. Devin Nunes (R-Calif.), introduced a resolution that highlighted similar challenges and called on the Department of the Interior to include the Arctic leases in the leasing program as a means of enhancing America’s national security.  

And last month, the current Vice Chairman of the Joint Chiefs of Staff, General Paul J. Selva, raised his own concerns, saying “The fact that we don’t have the capacity in any material way to have a surface presence in the Arctic is something that we ought to address.”