The Obama administration is pursuing an aggressive oil and gas agenda for the Arctic that officials expect to be brought to a fever pitch when the U.S. assumes leadership of the influential Arctic Council at the end of the month.
“The U.S. will be a leader in the Arctic. We know there are other countries that are actively exploring up there,” but the administration wants to have “a very strong presence” as the U.S. prepares to take over the council’s leadership, Janice Schneider, the Department of Interior’s deputy for land and minerals management, said at an industry event in Washington Tuesday.
“We will be taking over the leadership of the Arctic Council [this] month. We will have a very strong presence and we want to make sure … that what we are doing up there is safe and responsible and is consistent with public trust,” she told the Natural Gas Roundtable, a forum sponsored by the natural gas industry. The Arctic Council is made up of the eight countries that border the Arctic Circle, including energy rival Russia.
The Arctic has become an increasingly important focal point for nations seeking to exploit its strategic significance and opportunities for trade and commerce. Driving its importance is that Arctic sea ice is receding, making the area more accessible to shipping as well as energy production.
The Arctic Council functions to ensure nations address the impact of these activities in a way that preserves the region. It also has working groups that focus on oil spill prevention and climate change adaptation strategies.
Many countries like China have joined the council as observers because of the Arctic’s strategic significance, as well as its proximity to natural resources such as oil and natural gas.
Although Schneider acknowledges there is much opposition to drilling in the Arctic, she says the Obama administration is committed to making sure that proposals for offshore exploration and drilling can move forward.
“We are getting a lot … [of] opposition to drilling in the Arctic, but we are committed to making sure that work does move forward and it’s done in as responsible a way as it can be,” Schneider said.
Underscoring the administration’s commitment was the department’s Tuesday decision on lease sales to major oil producer Shell to begin exploratory drilling in the Chukchi Sea near Alaska. The department’s environmental review of the lease sale had been contested and held up for several years by suits filed by environmental groups. Schneider signed off on the decision.
Still, skeptics think the administration’s agenda — which features first-of-a-kind arctic drilling rules and a major five-year plan for offshore leasing — could be top-heavy.
“The question I have is, can the U.S. effectively pull this off?” said David Hayes, former deputy secretary and chief operating officer at the Interior Department, commenting on the array of administration regulations and rules meant to balance safety and environment concerns with energy development.
Hayes spoke Wednesday at an event hosted by the economic research group Resources for the Future in Washington, where he shared the stage with the Interior Department, industry groups and Arctic stakeholders.
He said the White House is pursuing an agenda that wants to bring “all the decision makers,” including indigenous peoples, to the table, to “be involved in what they want for the future of the Arctic.”
This includes identifying “the best spot for future oil production.” He cited a number of administration rules and directives supporting that approach, including the National Arctic Strategy. He said the White House also wants to establish a task force soon.
In addition, the Interior Department is pursuing extensive rules for the Arctic. The proposed rules are so extensive that the industry is pressing the department to extend the review period that ends April 27.
The American Petroleum Institute, the U.S. Chamber of Commerce’s Institute for 21st Century Energy and the National Ocean Industries Association requested March 6 that the Bureau of Safety and Environmental Enforcement extend the comment period given the complexity and extent of the regulations.
In addition, the review period for the department’s major five-year plan for offshore drilling ended earlier this week, which Shell said limited the time it could spend in evaluating the more technical oil and gas exploration rules for the Arctic. Shell asked for an extension soon after the regulations were proposed in February.
An industry official suggests all the activity is being coordinated by the administration in line with the U.S. taking the helm of the Arctic Council. The power transfer will take place during the group’s ministerial meeting April 24-25. The U.S. chairmanship will last until 2017. Other council members include Russia, Canada, Denmark, Finland, Sweden, Norway and Iceland.
In 2013, China, India, Italy, Japan, Singapore and South Korea joined the council as observer nations.
An American Petroleum Institute spokesman said the oil and gas industry will keep pressure up for the U.S. to expand drilling in the Arctic during the country’s chairmanship.
“The safe and responsible development of oil and natural gas in the Arctic is critical to our economy and national security,” said the spokesman. “Failure to develop these resources would put America’s global energy leadership at risk at a time when Russia and other Arctic nations are forging ahead.”
The technology needed to drill in the Arctic is “advanced and available” and most of the U.S. Arctic is developable because the water is shallow, according to a report by an industry advisory group to the Department of Energy. The group sent its drilling recommendations to Energy Secretary Ernest Moniz last week.
Jan Mares, who served on the department’s petroleum advisory board, said the recommendations were requested by Moniz to assist him on energy issues in the Arctic.
