Admiral Robert J. Papp, Jr. U.S. Special Representative for the Arctic Presentation to the National Ocean Industries Association April 22, 2016

History and Mandate of the Council The Ottawa Declaration (1996) formally established the Arctic Council as a high level intergovernmental forum to promote cooperation, coordination and interaction among the Arctic States, with the involvement of the Arctic indigenous communities and other Arctic inhabitants on common Arctic issues. Particular emphasis on sustainable development and environmental protection in the Arctic; military security issues are specifically excluded from the Council’s mandate.

Arctic Council Structure: U.S. Chairmanship

U.S. Chairmanship Team Overarching Goals Chair of the Arctic Council: Secretary of State John F. Kerry U.S. Special Representative for the Arctic: Admiral Robert J. Papp Special Advisor on Arctic Science and Policy: Fran Ulmer Chair of the Senior Arctic Officials: Ambassador David Balton U.S. Senior Arctic Official: Julia L. Gourley Overarching Goals Continue strengthening the Arctic Council as an intergovernmental forum Introduce new long-term priorities into the Arctic Council Raise Arctic and climate change awareness domestically and across the world

International Arctic Priorities Balanced thematic pillars of the Arctic Council during the US Chairmanship 2015-17: Arctic Ocean Safety, Security, and Stewardship Improving Economic and Living Conditions Addressing Impacts of Climate Change Arctic as a region of stability, peace and international cooperation Arctic climate change impacts locally and globally Note that the two-year U.S. Chairmanship of the Arctic Council, the preeminent forum in which the Arctic States discuss Arctic issues, prioritizes “Arctic Ocean safety, security, and stewardship,” a topic of particular interest for NOIA.

Change in the Arctic: Rapid Warming

Because of Arctic warming and shrinking ice extent and thickness levels in the Arctic Ocean, industry is looking to the Arctic as a source of new shipping routes, potentially shortening transit time between Europe and Asia. These new transit routes are also appealing to the tourism industry, particularly cruise lines. In summer 2016, for example, the Crystal Serenity will become the largest cruise liner to transit the Northwest passage, ferrying up to 1,715 total persons on board (1,080 passengers and 635 crew) on a 32-day expedition from Anchorage to New York. New shipping routes can also mean new markets for offshore energy industries.

U.S. Offshore Energy Interests in the Arctic

The Arctic is likely a rich source of fossil fuels Our Arctic energy policy is to promote environmentally responsible development of all energy resources – expanding oil and gas production, as well as developing new renewable energy resources – with an emphasis on both regulatory cooperation among Arctic nations and sustainable resource development. Likewise, our aim is to work with stakeholders, industry, and other Arctic states to explore the energy resource base, develop and implement best practices, and share experiences to enable the environmentally responsible energy production. Facts on offshore oil extraction: * More than 70% of the mean undiscovered oil resources is estimated to occur in five provinces: Arctic Alaska, Amerasia Basin, East Greenland Rift Basins, East Barents Basin, and West Greenland–East Canada. While traditional fossil fuel extraction continues throughout the Arctic, it is often more costly than extraction in other regions and riskier. USGS Map demonstrating current and prospective areas for oil and gas production

Break even range for Arctic oil development: $35 - $100 Average: $78 U.S. Beaufort (BP – Liberty) - $109 Chuckchi - $30 - $80 (probably much higher) Norway North Sea - $40 Norwegian Sea - $100 West Barents - $70 - $80 East Barents - $110 Barents (ENI) - $103 - $151 Russia East Barents (Russia) - $85 Can be as high as $120 Sources: EIA, Rystad Energy Arctic oil and gas resources: Scientific estimates of technically recoverable conventional oil and gas resources north of the Arctic Circle total approximately 13 percent of the world’s undiscovered oil and 30 percent of the world’s undiscovered gas deposits, as well as vast quantities of mineral resources, including rare earth elements, iron ore, and nickel. With the rapid disappearance of sea ice, these resources are becoming more available for development throughout the region. The United States sees the hydrocarbon resources of the American Arctic as an important facet of our long-term energy security. Challenge: The estimated cost of oil development varies significantly by region– and in many regions is prohibitively expensive and risky. Bottom line: An ambitious and balanced approached to Arctic energy issues will require both traditional and renewable energy sources.

Arctic Offshore Regulators’ Forum Launched in 2015 Current Chair: United States Goal: the exchange of information, best practices, and relevant experiences of regulatory efforts related to developing petroleum resources in the Arctic. The Arctic Offshore Regulators’ Forum is comprised of technical and operational offshore petroleum safety regulators whose members are dedicated to the common cause of improving offshore safety outcomes in the Arctic. The United States was instrumental in launching the initiative and serves as its current chair. (In May 2017, leadership of the Forum will shift to Finland.) Facts: The Forum held its inaugural meeting in May 2015, when it adopted its terms of reference. The group will meet again April 28-29, 2016, in Washington, D.C. The Forum is independent from the Arctic Council, though it periodically provides updates to the body.

U.S. Arctic Council Chairmanship Priority: Arctic Ocean Safety, Security and Stewardship Marine Oil Spill Response September 2015 Marine Oil Spill Pollution Agreement Workshop Officially entered into force in March 2016 2016 tabletop exercise Implementing the 2013 Marine Oil Spill Response Agreement: September 15-17, 2015, the United States hosted representatives from the Arctic States at the Coast Guard headquarters for a workshop focused on lessons learned from previous simulations and to begin preparations for a spill-response simulation during the U.S. Chairmanship. The agreement officially entered into force in March 2016. A U.S.-led table top simulation of a marine oil spill will occur later this year.

Addressing Communications Gaps in the Arctic

Arctic Council Task Force on Telecommunications Infrastructure in the Arctic The Arctic Council has initiated a circumpolar telecommunications assessment of the infrastructure necessary to support ever-increasing human activity throughout the Arctic region. The Council-- with advice from industry, end users and local experts– are coordinating a circumpolar assessment of telecommunications infrastructure of existing coverage and will seek to identify unmet communication needs for increased regional connectivity, human services, scientific observations, navigation ,and emergency response support. The Task Force aims to deliver a completed assessment of existing communications infrastructure, user needs and gaps in capabilities along with examples of successful public-private partnerships. Key point: * Building telecommunications infrastructure across the Arctic is critical for addressing the growing communication needs and demands of Arctic residents, supporting navigation, offshore development activities, search and rescue operations, and environmental and humanitarian emergencies.

Efforts to Enhance Emergency- Response Capabilities & Preparedness in the Arctic

U.S. Arctic Council Chairmanship Priority: Arctic Ocean Safety, Security and Stewardship Search & Rescue October 2015 “Arctic Zephyr” SAR tabletop exercise The “Arctic Chinook” live SAR exercise will occur in August 2016 off the Northern shores of Alaska. The two-year U.S. Chairmanship of the Arctic Council also prioritizes emergency-response preparedness. Under the theme of “Arctic Ocean safety, security, and stewardship,” the United States is facilitating multinational simulations of search and rescue and marine oil spill emergencies. Implementing the 2011 SAR Agreement: In October 2015, the United States facilitated the “Arctic Zephyr” tabletop exercise, a demonstration that brought together representatives from the Arctic States to simulate an Arctic SAR emergency. We are also planning a live SAR exercise, to occur following the Crystal Serenity cruise this summer through the Beaufort Sea. We plan to encourage each State, when it Chairs the Arctic Council, to commit to holding a SAREX during its Chairmanship. 

Thank You