IN THE RACE FOR ARCTIC ENERGY THE OBAMA ADMINISTRATION DITHERS BUT NOT PUTIN

The Wall Street Journal on August 25, 2015, published a commentary by Gary Roughead on US and Russian Arctic energy policy. Excerpts below:

Russia is taking the lead in Arctic offshore oil production. Russia began producing offshore oil at the Prirazlomnaya field in the Pechora Sea in 2014, and last year it delivered roughly 2.2 million barrels. Gazprom Neft expects to more than double oil production this year from the country’s only offshore Arctic oil project.

China isn’t far behind. Between 2009 and 2013, Chinese companies—mainly the big three, China National Petroleum Corp., Sinopec and China National Offshore Oil Corp. (Cnooc)—were the largest buyers of international oil assets. Several of these acquisitions were made with the Arctic in mind, such as Canada’s Nexen and Russia’s Yamal LNG. Early last year, Cnooc obtained an exploration license for Iceland’s Dreki region in the Norwegian Sea. The company is also expected to be involved in Norway’s 2016 licensing round in the Barents Sea.

Russian and Chinese activity goes beyond a scramble for resources. Russia has added a 6,000-soldier permanent military force, including radar and sensing networks, in the Arctic’s northwest Murmansk region. Russia recently submitted a large extended continental-shelf claim for the Arctic, which, if accepted, will give Russia rights to seabed resources beyond its 200 nautical-mile exclusive economic zone. China’s maritime activity in the region has increased, and it is making significant investments in Arctic research, infrastructure and natural-resource development. Although not an Arctic nation, China sees the value in building modern icebreakers to support its activity in the polar regions—north and south.

The dominant posture Russia and China are assuming with regard to Arctic oil and gas stands in contrast to the U.S. After holding a record-breaking lease sale in the Chukchi Sea in 2007, (and collecting billions of dollars for federal coffers), the federal government has failed consistently to demonstrate it has the political will and agency know-how to allow Arctic offshore oil-exploration to move forward.

Alaskan energy production from the outer continental shelf can come online in 10 to 15 years, when experts predict shale-oil production in the lower 48 states will plateau and crude-oil production in the Gulf of Mexico will begin to decline.

But the dithering must end soon. According to a recent report by the National Petroleum Council (NPC) and a diverse group of government regulators, nongovernmental organizations, environmentalists, industry leaders and Alaska Native representatives, the federal government needs to facilitate exploration in the offshore Alaskan Arctic now. Failure to act immediately risks a renewed reliance on imported oil and jeopardizes America’s global competitiveness, leadership and influence in the Arctic.

The U.S. recently assumed a two-year term as chairman of the Arctic Council, the world’s primary intergovernmental forum on the region. The council focuses on a broad range of issues but not on defense and security. The U.S. can use its chairmanship to take a leadership position on shipping, resources and fisheries standards and practices. It can also set the stage for constructive regional engagement and cooperative investment to enhance overall maritime domain awareness in the Arctic, including joint search-and-rescue and environmental responses.

The U.S. should also use its leadership role to ensure responsible energy exploration and production in the region…

Mr. Roughead, a retired U.S. Navy admiral and former chief of naval operations (2007-11), is a visiting fellow at Stanford University’s Hoover Institution.

Comment: Mr. Roughead in his article concluded that:

we will cede this critical strategic region to others with grave economic, security and environmental implications for generations to come.

It should be noted in relation to the Russian threat in the Arctic that Putin has added a 6,000 permanent military force to the Murmansk region close to northern Scandinavia. Finland has a fairly good defense in the Arctic while Swedish forces are weak. Other influential Arctic nations such as Canada, Norway and Denmark would benefit from a strong US leadership in the Arctic Council.

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