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Balancing Conservation and Development in a Changing Arctic


08/26/2012


By David J. Hayes, Deputy Secretary, U.S. Department of the Interior
Presented at the Arctic Imperative Summit, Gridwood, Alaska

Good morning. Thank you for the introduction.

I am delighted to be here this morning to talk about how the Department of the Interior can – and must – balance our dual missions of conservation and development here in Alaska.

But first, if I may, I would like to thank the sponsor of this wonderful conference, Alice Rogoff, for all that she is doing to bring attention to the Alaskan Arctic. And I would also like to acknowledge her husband, David Rubinstein, for a special connection that he has with our Department of the Interior.

As you may have noted from recent press coverage, it was a year ago that an unexpected earthquake hit Washington. Most of the city was ok – we are generally good in rolling with the punches – but the Washington monument was not. Built on fill material, it was rocking and rolling and several large cracks formed in some of its granite blocks and a cascade of mortar fell inside the monument. It had to be closed and was facing a big repair bill – an unfunded mandate.

It was then that David Rubinstein came forward and, as a citizen of our city of Washington DC and an admirer of our National Mall and the Washington Monument, made the remarkable offer to contribute $7 and a half million dollars of his personal funds to get the Monument repaired. We accepted it!

I was fortunate enough to celebrate his donation, along with Jon Jarvis, the Director of the National Park Service, a couple of months ago. Thank you again for your generosity, and your patriotism, David.

Now for Alaska and the Department of the Interior.

As you know, the United States Congress has placed an enormous responsibility and trust in our Department when it comes to Alaska. Through the Bureau of Land Management, the National Park Service, and the U.S. Fish & Wildlife Service, we manage more than 200 million acres of Alaska – more than half the landmass of the entire State. In addition to these land management responsibilities, Congress has charged the Interior Department with permitting responsibilities for oil and gas and renewable energy resources in Alaska’s offshore waters. Through our Bureau of Indian Affairs, and with the help of the Fish & Wildlife Service, we also have a special responsibility to promote the federal government’s relationship with Alaska natives, including honoring their cultural heritage and helping to implement their subsistence rights. And, finally, the world-class scientists in our United States Geological Survey, working with scientists in our other bureaus, and with scientists at the University of Alaska and others, are working every day to monitor and better understand seismic and volcanic hazards in this state, to assess Alaska’s energy resources, to evaluate the health of polar bear, walrus, caribou and other wildlife populations, and to analyze the impact that the changing climate in Alaska is having on everything from coastal erosion to permafrost loss to increased fire risk.

If this weren’t enough, the President last year asked our Department to take on additional responsibilities in Alaska. Last July, the President issued an Executive Order that created the Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska, and he asked me to Chair the group. As an Administration, we had recognized that because of the way that Congress has divvied up various permitting responsibilities among different agencies – from the Department of the Interior, to NOAA, to EPA, to the Corps of Engineers, the Coast Guard and others – businesses seeking permits had to go from window to window, from Department to Department. Even within the Interior Department, there were several different stops for businesses: the Fish & Wildlife Service, the BLM, and our offshore agencies – the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement (which together formed the former Minerals Management Service).

In addition to not being coordinated across the federal agencies, there was no coordinated reach-out occurring on important permitting issues to the State of Alaska, municipalities, native Alaskans, conservation groups and other stakeholders. Federal officials were tripping over each other as they scheduled inconveniently-located meetings to get input from local citizens.

No previous Administration had ever taken on the task of facilitating coordination. Through the President’s action, and operation of the new Alaska Interagency Working Group, we have. And we believe that these reforms are providing clearer access to decision-makers for all stakeholders with an interest in proposed development activity, and more certainty for companies that want to do business in Alaska and the Arctic.

By way of example, when ConocoPhillips was facing delays due to a failure by the Corps of Engineers, EPA and the Fish & Wildlife Service to reach an agreement with the company on appropriate permitting conditions for its new oil play in the National Petroleum Reserve at CD-5, our Alaska Interagency Working Group got involved and we helped bring the agencies together and solve the issue.

We are now turning our attention to an application that ExxonMobil has pending for its Point Thomson project. Proof that we are making a difference came when the Alaskan delegation raised concerns last week to Secretary Salazar -- and not the Army Corps of Engineers -- that the Corps was delaying a permit needed by ExxonMobil.

The reality is that we knew about the issue and had already reached out to decision-makers at the Corps and the other agencies with equities in the project and made certain that all of them shared a common understanding of the importance of the issue and the need to provide timely decisions. Our Alaska Interagency Working Group doesn’t tell agencies how they should make decisions under the authority that Congress gave to them. But we do expect the agencies to communicate with each other and to respect reasonable timelines.

And, of course, the Alaska Interagency Working Group that I chair has been providing on-going attention over the past year to Shell’s requests for approvals to undertake exploratory drilling this summer in the Chukchi and Beaufort Seas. Rather than have our Bureau of Ocean Energy Management approve an Exploration Plan and our Bureau of Safety and Environmental Enforcement approve a Spill Response Plan only to have another agency with equities in the activity – like the Coast Guard, or EPA, or NOAA, for example – enter the picture later with questions, comments or concerns about some aspect of those plans, or to have another agency issue a late-breaking permitting decision of its own that renders the other agencies’ work moot -- as has been the pattern in the past -- all of the agencies sat at the table working together through these approval processes and addressed their own permitting requirements on a parallel schedule. We also provided a forum for input by municipalities, native Alaskans and other key stakeholders, and we made a number of adjustments based on their concerns, including requiring drilling in the Beaufort to accommodate the Beaufort whale hunt.

As a result of the coordination and outreach effort, Shell has known for many months what is expected of it, and it has moved forward with that understanding. We continue to engage with Shell as part of an ongoing dialogue regarding their potential drilling activities in Alaska yet this summer. Any approved activities that occur in the Chukchi or Beaufort Seas will be held to the highest safety, environmental protection, and emergency response standards.

Before I leave the Alaska Interagency Working Group, let me also mention that the Working Group is pursuing an aggressive renewable energy agenda and is working to facilitate the development of wind, biomass, and hydropower across Alaska, with a special focus on delivering affordable, reliable energy to remote villages located off the electricity grid. In particular, our Working Group is collaborating with the State of Alaska, industry, Alaska renewable energy experts, and native community representatives to develop practical and, to the extent possible, replicable small-scale wind-diesel energy technologies for villages off the grid in Alaska. The potential upside here is enormous, both for the Native Alaska villages and for the promise that such systems might hold for other isolated villages around the world.

Let me share a couple of additional examples of how we balance conservation and development interests at the Department of the Interior.

Focusing again on the development of offshore oil and gas resources, the President took action a couple of years ago to cancel a proposed offshore oil lease sale in Bristol Bay. He went further and issued a Presidential memorandum that took Bristol Bay off the table for oil and gas development until at least 2018. The President decided, with the Secretary’s full support, that the enormous, multi-billion dollar fishery in Bristol Bay should not be imperiled by oil and gas development there. Simply put, we think that there are some areas where leasing should not occur. The Arctic National Wildlife Refuge falls into that category as well.

More typically, accommodations can be made to avoid a stark choice between development and conservation interests. This was our approach when putting together the next 5 year plan for offshore oil and gas development in Alaska, which we released just a couple of months ago. For example, our new plan notes that given the robust inventory of already-leased tracts in the Beaufort and Chukchi Seas, and the need to learn more about the nature of the resources and the potential risks of offshore development, any potential lease sales in the Arctic should occur later in the 5 year period – when more data and experience will be available to make sound decisions. And rather than take the shot-gun approach of inviting industry to bid for any lease tracts anywhere in the Arctic, inviting litigation around sensitive environmental and subsistence areas, the new plan will provide more clarity and certainty to industry by developing more tailored lease offerings that avoid particularly sensitive natural or cultural resources that are identified by
local Alaskans, scientists, and industry.

The Secretary played out the same balanced approach for onshore oil and gas development in Alaska’s National Petroleum Reserve, in an announcement that he made earlier this month regarding his preferred alternative for how to manage the 22.5 million acre NPR-A. The proposed path forward will help harness the oil and gas potential of the NPR-A while also protecting wildlife and subsistence rights of Alaska Natives.

More specifically, after engaging in unprecedented outreach to local communities, industry, and other stakeholders, and reviewing more than 400,000 comments, BLM has developed a proposal under which the large majority of oil and gas reserves in the NPR-A will be available for leasing, but some sensitive areas will be off-limits to leasing – such as some key subsistence hunting areas and the unique migratory bird stronghold in the Teshekpuk Lake area -- one of the largest Arctic lakes in the world and summer home for hundreds of thousands of waterfowl. The proposed plan also makes it clear that if pipelines are needed, they will not be precluded by the plan, but instead will undergo customary project-specific reviews.

The bottom line is that companies will have added certainty once the new plan goes final about where and how development can move forward in the NPR-A. The annual lease sales in the NPR-A that the President has called for, and that BLM has been holding, will continue – but now with a more certain result that they are not likely to be protested, given the comprehensive planning exercise that BLM has undertaken – for the first time ever -- for the entire 22.5 million acre NPR-A.

While we believe that we are making good, common-sense decisions on all of these Arctic development issues, based on the best science available and input from the State, municipalities, native Alaskans and other stakeholders, our Alaska Interagency Working Group’s coordination activities have uncovered nagging concerns about whether all of us who are interested in the Arctic have the information and tools needed to make sound, longer-term investment decisions in the Arctic.

For one thing, I have been struck by the fact that although there is an enormous amount of scientific research underway in the Arctic, there is a lot we can do to improve the lines of communication between the scientific community and decision-makers who are anxious to get solid scientific input on key questions that are before them. That’s when I invited your former Lieutenant Governor and the Chair of the Arctic Research Commission, Fran Ulmer, to work with me to bring the science community together with decision-makers and discuss how scientific information -- including Traditional Knowledge -- might be made more readily available to decision-makers, to companies, and to the general public about sensitive and changing resources in the Arctic.

Our Alaska Interagency Working Group also has been encountering the “silo-ing” of important decisions by different federal, state and local agencies. Major scientific work has been going into agency-specific planning and project reviews, but no one – either at the federal, state or local level -- has been looking across the board at future development trends and potential resource or cultural restraints – so as to enable decision-making that goes much beyond one-off projects.

Interestingly, the international Arctic community has been concerned about this same phenomenon. At the last meeting of the eight nation Arctic Council in Nuuk, Denmark, which was attended by Secretaries Clinton and Salazar, Senator Murkowski, Lt. Governor Mead Treadwell and me, among others, the Arctic Council formed a technical work group to discuss how best to address both of these problems and engage in longer term planning efforts across the Arctic.

Given the shortcomings that our Alaska Working Group has identified, and mindful that the Arctic Council is looking at similar issues, our Alaska Interagency Working Group recently was asked to prepare a report to the President by the end of this year that addresses and proposes a way forward on the two key issues that I have identified here:

(1) Providing more and better access for all decision makers – whether they are state, federal or local – to a centralized hub or portal for scientific information -- including Traditional Knowledge -- to help inform decision-makers and the public. The initiative must and will build upon existing data collections, such as the North Slope Science Initiative’s Data Catalogue, Arctic ERMA, regional observing systems, private industry and the University of Alaska’s Geographic Information Network of Alaska, and it will complement and coordinate with existing interagency efforts like the Alaska Data integration Group and the Interagency Arctic Research Policy Committee, which is developing a five-year plan for Arctic research in FY 2013-2017;

(2) Taking jurisdictional lines off the Arctic map and identifying future development scenarios and potential constraints so when decisions that the federal government makes – and, we hope, that the State and others make, they are made with an eye to the future, and in a context that takes into account infrastructure and human capital needs associated with a broader sweep of potential development – and not solely on a project-by-project basis. The idea is to work closely with the State of Alaska, Alaska Natives, local communities and the many agencies and stakeholders that have been focusing on specific projects or regions and develop an Integrated Arctic Management framework which pulls together Arctic-wide information that is relevant to future decision-making, including: (1) ecologically and culturally important areas, natural resources and processes, and key drivers of environmental changes in the Arctic – regardless of which agency’s territory they are found in; (2) trends – like climate change – that may affect these resources over time; and (3) commercial, societal, and governmental trends that could lead to future infrastructure related needs in the Arctic. This means going beyond the energy sector and working with industry, the State, boroughs, Native corporations, tribes and others to anticipate and discuss potential future scenarios associated with shipping, tourism, fishing, and the military. 

We are gearing up for this important exercise and will need all of your help and collaboration in pulling it off. The report that our Alaska Interagency Working Group will inform the development of the Arctic Strategy that Secretary Clinton has committed our Administration to develop in response to requests by the Alaska delegation, and which will be the subject of Deputy Secretary Tom Nides’ speech tomorrow evening. Never before has there been an effort to pull together the scientific information into a single portal for access by all. And we must take the first steps – together – in developing a long-range Integrated Arctic Management strategy that looks clearly toward the future, anticipating development that we think may occur, and enabling local, state and federal decision makers to have a bigger picture in mind when they are presented with requests for permits.

In that regard, I look forward to working with folks like Fran Ulmer, Commissioner Dan Sullivan, Mayor Brower, and many others governmental, tribal, industry and NGO leaders in this room in the months ahead. We’ll be reaching out. Although this is a report to the President that I will be responsible for delivering to him in my capacity as Chair of the Alaska Interagency Working Group, this is an exercise that must be run here out of Alaska, with strong staffing and clear deliverables. We will look forward to working with all of you on this important project. Stay tuned, and please help us make the most of this opportunity.

Thank you.