Remarks by the Secretary and Deputy Secretary at Norway Arctic Roundtable

TRONDHEIM, NORWAY - As part of the Obama administration's “all of the above” energy strategy, Secretary of the Interior Ken Salazar and Deputy Secretary David J. Hayes today delivered remarks at the Norway Arctic Roundtable in Trondheim, Norway. These discussions and meetings are part of the Obama administration's commitment to expanding safe and responsible production of our domestic resources while ensuring the strongest possible safety and environmental oversight of offshore oil and gas activities on the U.S. Outer Continental Shelf.

Secretary Salazar and Deputy Secretary Hayes's remarks from the Norway Arctic Roundtable, as prepared for delivery, are below:

Remarks by Secretary Salazar at the Norway Arctic Roundtable
June 26, 2012 – Trondheim, Norway
As Prepared for Delivery

Good morning to my counterparts, industry representatives and other dignitaries here today.

A special thank you to Ola Borten Moe, Norway's minister of petroleum and energy and his staff, for welcoming us all to your great country and for organizing two days of focused discussions about safe and responsible oil and gas development in the oceans of the world.

All of us are here today because we have a shared interest in the Arctic. We share its waters. We confront shared challenges in its frontiers. And we have a shared stake in a sustainable future.

The challenges we see in the Arctic bring together a number of overlapping conversations. It's impossible to talk about energy development and resource management without talking about the need to preserve fragile environments, the need to develop infrastructure, or the need to protect Native communities and their way of life.

For U.S. policy-makers, these issues coalesce in Alaska, which includes America's Arctic.

The Department of the Interior has significant equities in Alaska. We manage more than half of all land in Alaska, including Denali National Park and the Alaska National Wildlife Refuge. We also oversee all of Alaska's Outer Continental Shelf, including the Beaufort and Chukchi Seas in the Arctic.

As Secretary of the Interior – responsible for the stewardship of America's natural resources and energy supplies – I can tell you that President Obama and his administration take very seriously the complexities and unique conditions in the Arctic. It is a frontier. It is a place where development can only safely expand if we also expand our understanding through science and experience.

That is why the Arctic, we believe, demands its own approach. We have to listen to each other as global partners and we must listen to local communities. We have to invest in science and share information. We have to cooperate in our planning. And we must always put caution and safety first.

Nowhere are caution and safety more important than in energy exploration and development.

In the U.S. Arctic, the Beaufort and Chukchi Seas hold large estimated undiscovered oil and gas resources.

These resources, if developed safely, can be important components in the ‘all of the above' energy strategy that President Obama is implementing to expand U.S. energy production.

But if we are to access these resources, we have to take a careful, step-by-step approach that is grounded in science and that protects subsistence uses, wildlife, local communities, and the broader ecosystem.

And while we must do everything possible to proceed safely and responsibly, we must, of course, be ready to respond in the event of an incident.

Many of you know that we are currently in the final stages of a rigorous review of Shell's proposal to drill exploratory wells in the Beaufort and Chukchi Seas this summer.

If Shell meets our standards and passes our inspections, its exploration activities will be conducted under the closest oversight and most rigorous safety standards ever implemented.

In particular, all operators must now meet new drilling safety standards requirements for the equipment, systems, and infrastructure necessary for spill response in the Arctic. We implemented these standards in the aftermath of the Deepwater Horizon disaster two years ago as part of the most aggressive and comprehensive reforms to offshore oil and gas regulation in U.S. history.

Operators must also comply with strong new oversight from the Bureau of Safety and Environmental Enforcement, an agency we established last year to focus solely on safety and environmental protection. If Shell activities in the Arctic proceed this summer, BSEE will have an inspector on-site 24 hours a day. They are also required to have a full suite of response capabilities in the area, including a capping stack and containment systems.

These near-term exploratory activities would be limited in scale—and for good reason: we want to be certain that any activity is well within planning, safety and response capabilities that are deployed.

We also believe that this type of careful exploration in the Arctic can help develop critical science and information to guide future leasing and development decisions. This is, in fact, an important principle of the Administration's offshore energy strategy over the next five years.

Later this week, I will announce our final proposed Five Year Outer Continental Shelf Oil and Gas Leasing Program, which outlines our plan for safely and responsibly expanding energy development, including in the Arctic.

Like the Gulf of Mexico lease sale we held last week, which made nearly 39 million acres available and brought in over $1.7 billion U.S. dollars in bonus bids, this five-year program will show that we can move confidently – with comprehensive safety standards in place – to continue to grow our energy economy at home while protecting the environment and human health.

In this plan, we will make available vast areas in the most resource-rich parts of the U.S. outer continental shelf for oil and gas leasing. This includes frontier areas of the Alaskan Arctic.

Our plan schedules two potential lease sales in the Arctic – one in the Chukchi planning area in 2016, and one in the Beaufort planning area in 2017.

Our goal is to maximize the availability of oil and gas resources in those areas that we are making available for leasing, while minimizing potential conflicts with environmentally sensitive areas and the native Alaskan communities that rely on the ocean for subsistence use.

To achieve this, we are taking a different approach – a more strategic approach – than the past. Specifically, we intend to gather information from industry, Native Alaskan communities, the scientific community, and the public to identify specific high-resource, low-conflict areas that are best suited for exploration and development.

This strategy, which is similar to how we now conduct onshore oil and gas lease sales and offshore wind energy planning, will allow us to design potential lease sales in the Arctic in a way that best balances factors like resource potential, subsistence use, and environmental considerations. Specifically, this analysis will help us to design the specific features of Arctic sales – like the size and location of the sale area and the terms and conditions that ensure that any leases are developed responsibly. This will enhance certainty for industry and reduce conflict, litigation, and delays.

You can call this approach “targeted leasing.” It means that we are aggregating what we know and identifying areas best suited for exploration and development, based on the latest information.

For example, a 25 mile buffer along the coast of the Chukchi Sea has long been excluded from leasing because it is so important for Native subsistence use. We will continue to maintain that buffer in our next plan.

In this next five-year plan, we have determined that an additional area north of Barrow – one that has not historically attracted industry interest and that has very high subsistence value to Native Alaskan communities – will not be considered for future leasing for the same reason.

Leasing has tended to focus in areas elsewhere in the Chukchi with higher estimated resource potential, so this area fits our strategy of offering areas with the greatest resources.

Overall, this Arctic strategy represents a shift from the ‘one-size-fits-all' approach of the past to a recognition of that science, planning, and the voices of local communities can guide us on a smarter, more strategic, and more effective path.

I look forward to the opportunity to share our experiences with you today, and to hear from all of you about your experiences in the Arctic frontier.

With that, I will turn it over to Deputy Secretary David J. Hayes for his remarks.

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Remarks by Deputy Secretary Hayes at the Norway Arctic Roundtable
June 26, 2012 – Trondheim, Norway
As Prepared for Delivery

As the Secretary mentioned, our shared responsibility for the Arctic brings us together today. This is an exceptional forum to share our experiences.

A critical regional tool, of course, is the Arctic Council, under the auspices of which our nations are working to craft a formal agreement to strengthen cooperation on oil pollution response. With increased shipping and natural resource development activities projected for the Arctic in the coming decades, this is a priority effort. The United States is proud to be part of the Council's newly created Oil Pollution Response Task Force – a task force that has strong support from around the region.

Another important event is tomorrow's meeting convened by our Norwegian hosts: the second Ministerial Forum on Offshore Energy Safety. This is a Forum Secretary Salazar established last year in Washington, D.C., and we have been heartened by Norway's commitment to continued minister-level dialogue about safety issues. While the Forum is of global scope, its themes are especially relevant to the Arctic.

Good science must underpin development. We need to continue expanding what we know about the Arctic and its unique ecosystems and cultural resources, marine environments, sea currents, ice migration and weather patterns.

In the United States, we are taking a number of steps toward that goal. We have a dedicated team of scientists who are working and coordinating across agencies and organizations to build our understanding of the environment, resources, geology and culture of the Arctic.

We are also looking ahead and thinking strategically about future science needs. The Congressionally-chartered Arctic Research Commission is working to coordinate the research that 15 different federal agencies are sponsoring on Arctic matters. And our Interagency Arctic Research Policy Committee is putting together, as we speak, a new plan for addressing science needs in the Arctic, as a complement to its huge commitment to on-going Antarctic research.

These are in addition to a number of collaborative international initiatives to improve scientific information about the Arctic that the United States is involved in.

Continuing to build our body of scientific knowledge about the polar regions is paramount – but it is only the first step. Equally important is to ensure that there is a strong, meaningful link between polar science and the decisions facing policymakers in the Arctic and Antarctic.

This is one of the charges that President Obama gave to the Interagency Working Group on Energy and Permitting in Alaska, which he created last summer in order to facilitate coordinated, science-based domestic energy development and permitting in Alaska. As Chair of the group, I coordinate the efforts of decision makers across the federal government when it comes to developing both conventional and renewable energy resources in Alaska. In my capacity as chair, I also am partnering with Fran Ulmer to advance this mission by promoting the dialogue between federal policy makers and the scientific community on how to optimize the availability of relevant scientific information for decision-makers.

We held three Science and Decision-making workshops with members of the federal government, state, local, and tribal government representatives and members of industry, academia, and non-governmental organizations.

One of the key themes that emerged from our first Science and Decision-making workshop is the need to adopt an integrated, holistic approach to resource management in the Arctic. The Arctic's ice shelf and coastal, terrestrial and marine ecosystems are changing too fast for sector-by-sector, project-by-project, or issue-by-issue management. Getting it right in the Arctic calls for a fully integrated approach if we expect to protect natural resources and subsistence values while continuing commercial activities.

This echoes a theme that Secretary Salazar and I heard in Nuuk last summer, where the Arctic Council agreed to take a serious look at how the many resources – including energy resources – of the Arctic can be managed sustainably, without compromising the resilience of important ecological and cultural systems.

The Arctic Council's ecosystem-based management (or EBM) approach holds a great deal of promise as a means to operate in the region with less risk and greater foresight. The EBM Experts Group just had a very successful meeting in Sweden this spring and is continuing to foster greater cooperation and develop a body of best practices for adaptive management in a rapidly changing environment.

This effort has also helped to inform an important domestic initiative in the United States focused on "Integrated Arctic Management." We have established a government-wide task force to use the best available scientific and traditional knowledge about the Arctic to identify key indicators of change and recommend actions that will help ensure the long-term health and resilience of the environment while still achieving sustainable commercial activities. Near-term deliverables will include an assessment of environmentally and culturally sensitive areas and the development of plausible future scenarios to guide planning in the Arctic region.

The rapid changes underway in the Arctic underscore the urgency of effective and far-sighted policies to ensure the health and welfare of the native communities.

It is important to consider and to support the collection and sharing of traditional knowledge, often the best available information. This information should help inform any decisions we make in this region, including decisions about energy development, in order to protect Alaska native communities.

Integrated Arctic Management, as mentioned, is a means to ensure that these critical needs are incorporated into management and planning.

That concludes our portion of the program this morning – thank you very much.

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