"In Search of Arctic Energy" Publication Launch

Please join the Canada Institute, the Kennan Institute, and the European Studies Program for the publication launch of "In Search of Arctic Energy." This event will discuss the findings of the new paper and delve into the implications that Arctic energy exploration will have for the region and the globe's energy economy.

The Canada Institute’s “In Search of Arctic Energy” publication launch on January 29th, 2014 discussed the findings of the publication and the impact of future exploration on international relations and the world’s supply of oil.

Introduction

Jan Kalicki introduced the event by discussing the geopolitical implications of developing Arctic resources. He noted that there has been a drastic change in energy production since 2005. Kalicki argued that the distinction between producer and consumer has been blurred. Furthermore, Kalicki explained that climate change has made the Arctic increasingly accessible for energy exploration, thus making the Arctic more attractive for investment.

Panel 1

• Jim Slutz, moderator, President, Global Energy Strategies, LLC
• Mikkal Herberg, Senior Lecturer, International and Asian Energy, University of California, San Diego

Jim Slutz moderated the first panel. Slutz began by outlining the commonalities in Arctic policy in the United States, Canada, and Norway. He noted that they all have boundary disputes in the Arctic that need to be resolved and emphasized that “all have very strongly identified the need to advance science and the understanding of the Arctic as well as advancing the technology to work in a whole variety of areas in the Arctic”. Slutz also underlined the shared belief of the importance of environmental stewardship and working in conjunction with native peoples to develop the Arctic.

Mikkal Herberg spoke primarily on Russia’s stake in the Arctic and how it would impact its geopolitical standing. With aging oil fields, Russia has turned to the Arctic to maintain its supply of oil.  Herberg discussed the growth in the relationship between Russia and Asia, noting that “Broadly you can think about the relationship between Russia and Asia in terms of the Arctic as largely complementary.” He observed that Japan imports 100% of its energy and China imports 60% of its oil, but Asian countries are reliant almost entirely on Middle Eastern oil. As a result, Asian countries are very interested in Arctic energy and have received observer status on the arctic council as they seek to diversify their energy sources.  

Panel Two

• Rebecca Ranich, moderator, former Director, Federal Energy & Resources Management, Deloitte Consulting
• Joel Darmstadter, Senior Fellow, Resources for the Future
• Kip Knudson, Director of State-Federal Relations, State of Alaska

Rebecca Ranich framed the debate about Arctic energy by posing the following question:  what is the most efficient way to satisfy global demand for energy? She pointed out that investment economics is impacted by changing business models. Therefore, Arctic investment is highly dependent on changes in the U.S. energy sector. Ranich also highlighted the challenges of working in the Arctic, namely “the significantly underdeveloped and undeveloped infrastructure and seasonal weather challenges which contribute to what we all have come to understand are the much higher development costs for any infrastructure asset.”

Kip Knudson discussed Alaska’s history as an energy producer and potential projects that would increase oil production in the state. Knudson pointed out the benefits of oil production in Alaska: 90% of state revenues come from oil, and the energy sector makes up one third of the state economy and is a significant provider of jobs. An advocate for the expansion of oil projects in Alaska, he concluded that “there is no reason we should be buying foreign oil when American oil, made by America citizens, is available.”

Joel Darmstadter discussed the social costs of Arctic exploration. He explained: “when we are talking about the Arctic we are talking about undiscovered, discoverable energy resources, oil and gas resources, which would only add if they materialized to this carbon burden that is foreseen in these projections.” He concluded that it is reasonable to ask whether or not Arctic exploration should go forward, given the environmental costs. He believes that there is a need for a carbon tax or a cap and trade model to account for the negative externalities involved in fossil fuel production.