Remarks to Center for Oceans Law and Policy Conference on the Arctic and Law of the Sea Treaty

*** As Prepared for Delivery ***

"Thank you. Good afternoon. It is my pleasure to address you today at the 34th annual Center for Oceans Law and Policy conference. I have to commend the Center for putting together a very impressive conference.

"As all of us in this room are aware, the United States IS an Arctic nation because of Alaska. And I am very privileged to be the Senior Senator for America's Arctic State. But, what does it mean to be an Arctic nation? I believe that the Federal Government is just waking up to this reality and we are trying to define exactly what that distinction means. In my view, being an Arctic nation means that the United States, by virtue of our land and waters, has a fundamental interest in the region and a responsibility and obligation to protect those interests.

"I speak to you at a time of great change for the Arctic. That pace of change demands that greater attention be focused on the region. The implications of the dynamic changing Arctic for the residents and important international security, economic, environmental, and political interests, depend on it.

"Interest in the Arctic, by both the general public, the media and Arctic and non-Arctic nations, continues to grow. The attention is primarily due to the impacts of climate change and subsequent loss of seasonal sea ice, and interest in shipping lanes, energy and natural resources.

"Until recently, the resources of the Arctic were deemed to be too difficult and expensive to develop. But with increasing access and high energy and mineral prices, the Arctic's wealth is now being increasingly discovered, explored, and developed. This includes conventional oil and natural gas but also methane hydrates and other less conventional forms. Offshore Alaska we are estimating 15 billion barrels of oil in a concentrated area of the Chukchi Sea and 8 billion barrels in the Beaufort Sea, and I am hopeful that exploratory wells will prove up this summer.

"The United States Geological Survey tells us that the region has possibly up to 30 percent of the world's undiscovered gas and 13 percent of its oil. We also think it holds huge amounts of other minerals - like coal, nickel, copper, tungsten, lead, zinc, gold, silver, diamonds, manganese, chromium and titanium. But there's a natural, sometimes reflexive tendency to question how in the world it can ever be safe or even economical to drill and produce in such harsh, misunderstood, and distant environments. But it's happening, and the technology and engineering behind some of the existing and proposed activities is fascinating.

"We already know that Russia is turning its eye to the Arctic's vast energy reserves as they are building the first offshore oil rig that can withstand temperatures as low as minus 50 degrees Celsius and heavy pack ice. As their oil production is in decline, they are also reducing taxes and bureaucratic hurdles in order to encourage new oil development in the Arctic. They are also planning for a near wholesale replacement of their icebreaker fleet in order to better operate in the polar region. By the same token, an energy company from England is now readying to seriously explore for oil and natural gas for the first time off the coast of Greenland.

"The spill in the Gulf of Mexico has shown that there will always be risks and impacts associated with producing energy. We must take every appropriate step to minimize the risks into the future. But we also need to be rational in our response to the Deepwater Horizon tragedy. We don't yet know exactly what failed. Until we do, we should be careful and not pass reactionary legislation that hasn't been fully thought through. We must learn the lessons from the Gulf accident, but we are still collecting information. Once we have a full understanding of the cause of the accident, it will guide us in our decision making on drafting new regulations and improving our safety procedures.

"The Deepwater Horizon incident may have made us more reticent to drill in the deep offshore, but it did nothing to reduce our need for oil and gas and it did nothing to change the value of those resources in what is still a growing global economy. Even as we take steps to reduce our dependence on fossil fuels, we're going to continue to need oil and gas for decades to come.

"I believe that we will rise from this tragedy not only as Americans, but that the world will learn and grow stronger in terms of understanding the values and risks of energy production.

"Alaska's offshore oil and natural gas resources are vital to the nation's strategic economic and energy security, and I remain committed to responsible exploration and production in the Beaufort and Chukchi seas. Since the Deepwater Horizon tragedy has been unfolding, we have demanded and achieved even greater protections surrounding those exploratory activities. There are differences between the deepwater Gulf activity and the Arctic- specifically, the relative shallow water depths and pressures in that area. In addition, the Shell permits have had more regulatory environment and judicial scrutiny than any other exploration permit in recent history. All eyes are on us in Alaska, and we need to be given the chance to prove we can explore safely.

"The exploration activity in the Arctic, combined with declining summer sea ice, has positive implications for energy security across borders, because LNG and oil tankers will in some cases be able to have alternatives to their current, more dangerous and clogged routes through South-East Asian straits and the Gulf of Aden and of course the Suez Canal. So non-Arctic nations are going to benefit in this way, but importantly they can also benefit through the funding element of these huge projects. The exploration, the production, and certainly the construction necessary to develop Arctic resources is going to require all types of financing not just for the sheer scale and remoteness of the projects, but for the levels of technology needed to bring them online in a way that's safe for workers, safe for the environment, and as insulated from risk as possible.

"Recently I had the experience of visiting a 4-D seismic room in New Orleans - where the images acquired through 3-D are basically animated to give a sense of shifting oil and gas reservoirs so that geologists can study trends and get a much more telling picture of the resource potential. It's almost surgical compared to the basic exploratory drilling which occurred in the last century - and it gives me confidence that a well can be targeted and explored with limited impacts to surrounding areas.

"This is just one example of the ways in which technology is able to provide a reassuring answer to questions about whether the world is ready for increased energy development in the Arctic. Another great example - and specifically an Arctic example - is the Liberty project in Alaska. Some of you may already be familiar with this extended reach drill rig which Parker drilling helped develop for BP to access an oilfield directionally 8 miles away. It's not quite there yet, but I'm hoping, and I'm betting, on good news from Alaska's North Slope on just how far we can continue to reach both literally and figuratively.

"And this brings me to a point - technology is advancing because oil and natural gas are still the most economically valuable energy sources in the world. The term "easy oil" is being slowly redefined as these technologies develop, and I have to predict that we will see a measured but certain expansion into Arctic lands and waters. This is significant because the first peoples of the Arctic have, I believe, a right to benefit by all of their resources, not just energy but the fisheries and marine mammals on which they depend for their nutrition and livelihoods. And I am encouraged by what I am seeing to be an increasing level of engagement, rather than opposition, from these constituencies. 30 years ago in Alaska, we were able to establish production from America's largest single oilfield at Prudhoe Bay by involving our Native peoples in almost every aspect of this new and substantial change to their land and lifestyle. There was engagement - sometimes contentious and sometimes very difficult - on the legislative level, on the administrative level, on the operational level, and on the personal level. The ultimate result has benefitted all Alaskans and our national energy security in ways beyond any of our predictions at the time.

"It isn't just Arctic energy that is drawing increased activity into the region. The impacts of an ice diminished Arctic are already affecting marine shipping. We recently saw two German vessels complete a commercial transit from Asia to Europe through the Arctic Ocean north of Russia. Two multipurpose heavy lift carriers transited through the North East-Passage or Northern Sea Route during August and September of last year. The route is now open for a short time in late summer and cuts about 4,000 nautical miles from the 11,000 miles long traditional journey through the Suez Canal and the Gulf of Aden.

"We now have reports that a Russian shipping firm has announced that it will use one of its ice strengthened arctic tankers to carry oil from the Kara Sea across the Northern Sea Route to Japan this year. This would be a proof of concept that could also apply to LNG tankers based on the same dual-acting icebreaker-tanker design used for the oil tankers.

"While the Arctic Marine Shipping assessment predicts it will be decades before these routes are open for many months of the year, I think we must consider that this is only the beginning and if it proves to be economical, it will happen.

"We know that there are national security and sovereign interests for all the Arctic coastal states in the region. The United States Navy has a new roadmap for the Arctic and they are studying the feasibility of a deepwater port in the far north. In support of their efforts, I introduced legislation that directs the Department of Defense and the Department of Homeland Security to study the feasibility, location and resource needs for an Arctic deep water port. This study will determine whether it is in the strategic interest of the United States, as I believe it is, to build a port and where it might be located. A deep water port would not only serve our military and Coast Guard needs, but as we develop our offshore oil and gas reserves and see more shipping, tourism and vessel traffic in the Arctic, a deep water port could provide valuable support for these activities as well.

"The Coast Guard has also embarked on a high latitude study to determine what assets and infrastructure they need to be prepared for an ice diminished Arctic Ocean. With increased maritime activity in the Arctic and such a shortage of infrastructure, it is vital we determine what the needs are and actively work to provide resources to protect the Arctic residents and environment.

"I believe we are at a very critical time in the Arctic right now. There seem to be two paths that we can go down in regards to international relations- one is a path of competition and conflict, and the other is one of cooperation and diplomacy. I believe the decision on which path we ultimately take will require dynamic leadership.

"One of the first areas that we need leadership is in the United States and the Senate ratification of the Convention for the Law of the Sea Treaty.

"I believe it is crucial for the United States to be a party to this Treaty and be a player in the process, rather than an outsider hoping our interests are not damaged. Accession to the Convention would give current and future administrations both enhanced credibility and leverage in calling upon other nations to meet Convention responsibilities. Given the support for the Treaty by Arctic nations and the drive to develop natural resources, the Treaty will also provide the environmental framework to develop these resources while minimizing environmental impacts.

"The United States in the only Arctic State that is not a party to the Law of the Sea convention, having first submitted the treaty to the U.S. Senate for approval in 1994 but not yet acceded to it. Canada and Denmark joined the treaty in 2003 and 2004 respectively.

"There are some who do not see the point in joining the rest of the world in ratifying the treaty. They say that the U.S. already enjoys the benefits of the Treaty even though we are not a member. That by not becoming a party to the Treaty, we can pick and choose which sections we abide by, while not subjecting our actions to international review. I respectfully disagree.

"The United States MUST ratify the treaty but we remain at a stalemate: the White House looks to the Senate to lead and the Senate waits for stronger support from the Administration. In part, the Senate calendar is to blame. It is anticipated that should the majority leader move the Treaty to the Senate floor, it would consume at least a week of floor time. And considering that there are less than 40 legislative days before the August recess, it is highly uncertain that such time will be carved out unless it becomes a priority for this Administration. Given the President's focus on advancing the START Treaty, I see even less of an opportunity to schedule the Law of the Sea Treaty this year. I wouldn't say it is impossible, but certainly would say it's unlikely. Unfortunately, failure to ratify continues to keep the United States at a disadvantage internationally and outside the process, without a seat at the table.

"Until the U.S. accedes to the treaty it cannot submit its data regarding the extent of its extended continental shelf to the Commission on the Limits of the Continental Shelf, established under the Treaty. Without a Commission recommendation regarding such data, the legal foundation for ECS limits is much less certain than if the U.S. were a party to the Treaty.

"According to the U.S. Arctic Research Commission, if the United States were to become a party to the Treaty, we could lay claim to an area in the Arctic of about 450,000 square kilometers-or approximately the size of California.

"While the United States has not ratified the Treaty, we continue to map our extended continental shelf and have been working cooperatively with Canada the last two summers on extended continental shelf data collection in the Arctic and are scheduled to work again in the summer of 2010. The US Icebreaker Healy completed the second summer of joint mapping with the Canadian icebreaker Louis St. Laurent. Though each ship has their own equipment in order to accomplish the mission, combining their efforts provides better data and they can cover more area together.

"Canada is expected to make its submission to the Commission in December 2013, so as to meet its deadline under UNCLOS, the U.S., as I have previously stated, will not be able to submit its claim. Not until we ratify the Law of the Sea Convention.

"I am pleased that ever so slowly, the United States seems to be waking up to the fact that we are, indeed, an Arctic nation. I am confident that with the leadership of members of Congress, the Administration and from the Arctic community at large, we can continue to highlight the strategic importance of the Arctic for the United States. Thank you."

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