Alaska’s neighbors ready to pounce

on Arctic development opportunities

By Lt. Governor Mead Treadwell

Russia’s leaders called an Arctic neighborhood meeting in September to make one thing clear: they see opportunities posed by global demand for Arctic resources, receding sea ice, and the North’s strategic location.

They’re ready to pounce.

Prime Minister Vladimir Putin, chair of the Russian Geographical Society, summoned a bevy of Arctic hands to Arkhangelsk to tell us this:

• Russia intends to make the Northern Sea Route, which passes Alaska’s front door, as important to global shipping and commerce as the Suez Canal. Major tanker loads of oil products, gas condensate and mineral ores have come our way already.
• Russia, heavily dependent on oil and gas exports, intends to sell in Asia as well as Europe. Shipments through the Bering Sea facilitate that. Their new partnership with ExxonMobil to develop Russia’s Arctic shelf resources may bring them hundreds of billions of investment dollars.
• Russia wants a greater share of polar air routes. To get cargo flights to stop, they’re upgrading airports, weather forecasting, and telecommunications.

Never has a Russian leader been more determined or prepared to actually accomplish these goals. Putin’s country is behind him. Major sources of capital, foreign and Russian, were in the room. The ministries of resources, environment, transportation, regional governments, and emergency situations, as well as Russia’s Arctic Ambassador, were there to speak to specifics. So were indigenous leaders and Russian governors, including Alaska’s closest regional neighbor, Roman Kopin, Governor of Chukotka.

Russia, already kingpin of the world’s icebreaker fleet, plans nine new ships by 2020. They will discount tariffs on icebreaker escort so shippers find the Northern Sea Route, with distance savings up to 40 percent, more competitive. And under Law of the Sea, Russia’s claim to new extended continental shelf resources could give Russia greater control of Arctic shipping.

Alaska’s Arctic agenda also focuses on access, development of resources onshore and off, safety in shipping and drilling, and getting new icebreakers to protect us and our shores. We respect the timeless use of this region by our First Alaskans, and will protect the wildlife resources we all enjoy and many depend on. We’re still waiting for Senate approval of Law of the Sea so America can make its own Arctic claim.

While the Russians are awake to the opportunities of the Arctic, we’re still trying to wake up Washington. And sitting there, listening to Russian leaders, I saw we’ve got a tougher time than our counterparts in the Russian Arctic, where the nation – and the national government – understands the opportunities and the risks.

To counter the risks, Alaska officials will push to implement the Arctic Search and Rescue agreement signed by Secretary of State Hillary Clinton at May’s Arctic Council Ministerial. Alaska National Guard assets, with helicopters and rescue teams deployed by the North Slope Borough, support the underequipped and undercapitalized Coast Guard in keeping the safety mission we’ve promised the world in the American Arctic.

And Alaska’s top oil spill expert joins October negotiations toward a second binding Arctic Council agreement on oil spill response cooperation.

Governor Sean Parnell continues pushing to keep Alaska competitive. We’re asking Washington for legal access to Arctic oil lands. We’re committed to improving physical access with roads to resources, an Arctic port study with the Corps of Engineers, and improvements to Alaska’s permitting system, and working with our legislature for a tax regime that attracts investors, rather than sends them away.

Finally, we’re keeping an eye on the competition, just as they are on us. Before Putin spoke Thursday, Russia’s Academy of Sciences Vice President Dr. Nikolai Laverov showed slides detailing Alaska’s Prudhoe Bay production decline curve, our struggles to build a pipeline for North Slope natural gas, and our challenges with Washington to move ahead on offshore drilling. Russia lagged behind Alaska previously in Arctic production, he said, but it has no plans to do so in the future.

In our Arctic neighborhood, we compete and we cooperate. After hearing Putin and his team raise the ante, it’s clear we have work to do on both.

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