What the USA will bring to its chairmanship of the Arctic Council

Summing up the Canada’s chairmanship of the Arctic Council

In 2013-2015 the Arctic Council (AC) was chaired by Canada1. Much has been done to expand and revitalize the organization. The Permanent Secretariat of the Arctic Council was established, all the issues necessary for its operation (personnel, finances and management) were agreed. A further expansion of the AC activities occurred and a wide range of actions, including some issues related to mining revealed. The AC concluded the second in its history international agreement on the prevention of oil spills, and the measures against the possible consequences. An agreement was signed on the establishment of a new meeting platform — the Arctic Economic Council. A decision was made on a collective fund aimed at co-financing environmental projects. Expanding of the number of the AC observer countries on the basis of pre-developed criteria for the admission of new members as permanent observers has also contributed to changes. The second report on the human dimension of the Arctic policy has become very important for the development of socio-economic policy in the Arctic region and for protecting the interests of indigenous people. In general, the interaction of the Arctic states has been developed constructively.

However, in connection with the Canada’s AC chairmanship, the comments of the Russian Foreign Ministry issued on April 27, 2015 noted the Canada’s attempts to involve issues not related to the Arctic in the activities of the AC, to politicize the debate and make it dependent on issues that do not contribute to the cause. Such a tendency was especially evident before and at the meeting in Iqaluit. However, Canada’s approach got no support from the Arctic states and indigenous organizations of the North, which noted the inadmissibility of a confrontational agenda in the AC’s work.

Iqaluit Declaration 2015

In 2015 the AC Chairmanship has passed to the USA2. In the Northern Canada in Iqaluit on the 24th of April 2015 the AC ministers’ meeting took place. Russian delegation was headed by the Minister of natural resources and ecology of the Russian Federation S.E. Donskoy. Minister of foreign affairs S.V. Lavrov didn’t attend the meeting due to the complicated international relations caused by the crisis in Ukraine. It should be noted that all the previous meetings were attended by him and he was one of the most active participants. At the meeting in 2015 Iqaluit declaration was signed and it summarized Canada’s AC Chairmanship3.

Iqaluit Declaration reaffirms the commitment of the Arctic states to peace, stability and cooperation in the Arctic and it consists of steps planned for the further development of international cooperation. A number of political documents within the intergovernmental framework was adopted aimed at collaboration in preventing the pollution of marine areas in the Arctic caused by the oil and gas activities and shipping. The plan contains a list of measures to prevent pollution caused by the oil and gas activities in the Arctic, as well as a list of measures to prevent pollution of the Arctic marine environment caused by the maritime industry. The plan also provides the exchange of information among its members on regulations, policies and practices related to the prevention of pollution of the Arctic marine environment. Participants intend to assess risks and environmental impact of oil and gas activities and shipping that may lead to contamination of the Arctic marine environment by oil. At the meeting a AC framework document on reduction of black carbon and methane emissions was adopted, as well as the Strategic Plan for the Arctic seas 2015—2025.

The Iqaluit session left the issue of EU observer status undecided, despite the fact that in the fall of 2014 Canada withdrew its objections which had been the main obstacle for a positive decision two years ago. No doubts, in terms of the EU sanctions against Russia, Moscow had not been set out to open the doors for the EU and its participation in the Arctic Council. Nevertheless, it was an elegant decision made — all applications, not just the application of the EU, for the status of observers were postponed to the next session of the Council to be held two years later in the United States.

The USA chairmanship of the Arctic Council begins (2015—2017)

After the Ministerial meeting the chairmanship was passed to the USA that came out with the slogan “United Arctic: common challenges, opportunities and responsibility”. Areas of the AC work we also defined for the USA chairmanship (2015—2017) 4.

Now the U.S. Secretary of State John Kerry is a Chair for the Arctic Council. The US officials responsible for the Arctic issues: admiral Robert J. Papp, Jr. — the US Special Representative for the Arctic (was assigned in June 2014, former Head of the US Coast Guard), Fran Ulmer — Special Advisor to the U.S. Secretary of State on Arctic Science and Policy.

Picture 1. Team for US chairmanship 2015—2017 of the Arctic Council: John Kerry, Robert J. Papp, Jr., Fran Ulmer

The US Arctic team also includes ambassador David Balton — Chair of the Senior Arctic Officials, Julia Gourley — U.S. Senior Arctic Official and others5.

The US chairmanship program represents three key areas:

• a)     Improving economics and living standards for northern communities;

• b)     Arctic Ocean Safety, Security & Stewardship;

• c)     Addressing the Impacts of Climate⁶.

The USA are focused on the target group work on Arctic marine cooperation (TFAMC), telecommunications (TFTIA) and science (SCTF). The way the work of these groups is going to be done is unknown as well as the preferences of Americans related to that.

The USA did not pay enough attention to the Arctic

The analysis shows that the United States acknowledged that the country paid not enough attention to the Arctic and was left behind Russia, Norway, and Canada and even behind some of the AC observer states. The fact that Barack Obama was the first US president visited the Arctic Circle area and met its residents, is a case in point.

A special place in the American debates is devoted to the development of domestic icebreaking fleet. Currently, the US has three icebreakers capable of operating in the Arctic; two of them are in use. In addition, according to environmentalists, the existing icebreakers cannot quickly and effectively help to deal with the possible accidents caused by the oil industry in the Arctic Ocean. The US president made the decision to construct one heavier icebreaker, worth up to 1 billion dollars, and put it into operation two years earlier than it had been planned. “It is important to be ready — whether it is about the reasons of national security or commercial reasons — to ensure that we will have a lot more opportunities than it is now,” — said the president of the United States on the 3rd of September 2015 7.

At the same time Russia has six nuclear icebreakers, four of them are in operation — "Yamal", "50 Let Pobedy", "Taimyr", "Vaigach" and two are in reserve, on a planned repair. Russian shipyards are now actively building atomic icebreakers “Arktika”, “Siberia” and “Ural”. According to General Director of “Atomflot” V. Ruksha, construction of one icebreaker costs an average of 40 billion rubles.

The US officials also noted that Alaska needed a deep-water port in the west of the state, a reconstruction of the airport in Barrow, on the north coast, and the appropriate infrastructure to respond to the oil spill in the Chukchi Sea and the Beaufort Sea. Several experts draw their attention to the need to update the maps of those areas in order to develop new ship routes and to resume the exploration of the Arctic shelf.

For many years the US politicians speak about the importance of strengthening the interest of citizens to polar affairs, their greater awareness of the “Arctic status” of the USA. It is primarily about the signing the UN Convention on the Law of the Sea (1982). Non-participation of the US harms its image and creates inconsistency of the US and its AC partner’s position and the potential for changes in the state's position on Arctic issues. It should be noted that the UNCLOS was signed by more than 140 countries. Moreover, the US Arctic coast is small. It is mainly northern Alaska and is considerably smaller than that of another contender for the possession of the rights to the Arctic wealth — Canada. Therefore, the position of the United States in a dispute over Alaska with the other Nordic countries is not that strong [2]. However, the analysis shows signing the UNCLOS through the Senate procedures will be done only by an American president with a strong majority vote in Congress.

How the USA intend to use their chairmanship of the AC

In the context of many unresolved issues, the US intends to use their chairmanship to solve their own Arctic problems. The USA intends to search for consensus between Alaska and the federal government. The Arctic has been a zone of interests of the State of Alaska. However, this state has only one seat in the House of Representatives and enjoys a little influence on the policy of the federal authorities. In addition, more than 80% of the land in Alaska is under the federal administration. This leads to conflicts between the state and the federal government (for example, the conflict caused by the oil drilling in the Arctic National Park «Arctic National Wildlife Refuge»). In 2015 US President Barack Obama recommended to extend the Arctic National Park and add 12 million acres [3]. Thus, some of the territories of the nature reserve, recognized as the areas not possible to be a subject to the development of mineral resources, have been classified as potentially oil-rich areas along the US coast of the Arctic Ocean. Senators from Alaska opposed the decision, since, in their view, it undermines the prospects for economic development of the state. Obama's proposal exacerbated the gap in the views of residents of Alaska and the federal government's policy in the region. The Commission of the State of Alaska for the Arctic policy expressed a concern that the US government was not paying enough attention to representatives of the State in determining the priorities of the Arctic Council chairmanship. In particular, the Com- mission considered that in the chairmanship program little attention was paid to mining and creation of new jobs. The Commission also stressed that it did not support the allocation of additional areas with potential mineral reserves in the “wildlife” category, because it believes that people of Alaska should have access to these areas. Thus, the Commission would have preferred, and the majority of Alaska citizens, in the opinion of its members, would have agreed to it. They saw the AC chairmanship as a way to promotion the economic development, rather than issues of climate change and environmental protection [3].

In our view, the United States will be actively engaged in solving the economic problems of the Arctic when near their shores the volume of maritime traffic will gradually increase and the cost of oil on the shelf will decrease or when they feel the dependence on imported oil, which may jeopardize the competitiveness and influence of the country at the global level. The media expressed the view that in the context of international challenges the United States faced in recent years (a conflict in Syria, Iran's nuclear program or promotion of an "Islamic state", crisis in Ukraine and etc.), the Arctic is clearly losing due to the low level of conflicts [3].

As the first months of the US chairmanship show, the US gives priority to climate issues. On the 1st of September 2015 President Obama was speaking at an international conference on cooperation in the Arctic held in Anchorage (Alaska): “I have come here today as the leader of the world's largest economy and the second largest country-air pollutant to state that the United States recognize their role in creating the problem and our responsibility for its solution-set”8. Catastrophically changing climate leads to disasters and loss of settlements. It is planned to reduce harmful air emissions by a third by 2030, despite the planned increase in production and would consumption. “The United States, of course, an Arctic nation. This year we are chairing the Arctic Council. We yearn to continue cooperation with all Arctic nations. Facing the problems, you should know that we cannot solve them alone, we can only solve them together”, — said Barack Obama9.

Picture 2. B. Obama’s speech. URL:

He recalled the need for signing of the “Agreement on reduction of harmful emissions into the atmosphere” at a conference in Paris in December 2015, where each country should submit a plan of action to overcome the environmental crisis, to take measures to reduce the negative impact in the Arctic.

Prognosis assessment of cooperation between the USA and Russia in the Arctic

Solving the Arctic issues the USA hope for cooperation with Russia, despite the complicated international relations. The US Special Representative for the Arctic admiral Papp speaks a lot about that and asks Finland to be a mediator in relation to Russian.

The USA understands inability to reach all the tasks and held all the planned meeting using just the efforts of the AC members and especially Russia. Without the cooperation with Russia it seems to be difficult to provide the implementation of air and maritime search and rescue agreements in the Arctic (2011)10 and the cooperation aimed at response to oil pollution at the Arctic sea (2013)11. Without the participation of Russia large-scale projects in the Arctic will be, at least,

• ¹⁰    Soglashenie o sotrudnichestve v aviacionnom i morskom poiske i spasanii v Arktike (2011). URL: http:// lib-rary.arcticportal.org/1474/3/Arctic_SAR_Agreement_RUS_FINAL_for_signataure_21-Apr-2011.pdf (Accessed: 04 November 2015)

• ¹¹    Soglashenie o sotrudnichestve v sfere gotovnosti i reagirovaniya na zagryazneniya morya neftyu v Arktike (2013).

inferior. Moreover, in order to promote complex issues, such as environmental protection and climate change, the Arctic should remain stable and peaceful region. The AC activity shows that to solve the problem of the introduction of new long-term priorities there is a need for consensus, which would be difficult to achieve in an atmosphere of distrust and tension.

Under these conditions, in our opinion, before taking a step towards the United States, Russia should consider and assess the hard sanctions the US impose against our country.

On the 16th of July 2014 United States imposed economic sanctions against Russia in connection with the events in Ukraine. The sanctions list, along with the largest Russian defense enterprises, includes energy companies “Rosneft”, "Novatek" and the Association of Suppliers for Oil and Gas Industry “Sozvezdie”12. On the 6th of August 2014 Bureau of Industry and Security, responsible for export control, United States Department of Commerce added United Shipbuilding Corporation to sanctions lists and established rules for the export, re-export and transfer of drilling rigs, spare parts, software, pumps, drilling pipes and other equipment intended directly or indirectly for the exploration and production of deepwater oil and gas (over 500 feet), the Arctic shelf, shale projects with potential for mining13. On the 12th of September 2014 the United States tightened the export regulations for Russian gas projects. Different US sanctions export lists included Russian energy company “Rosneft”, “Novatek”, “Transneft”, “Gazprom”, “Gazprom Neft”, “Lukoil” and “Surgutneftegas”14.

The EU joined the US sanctions immediately; closed European markets for Russian companies included in sanctions lists and refused to give credits, cheaper than the ones in Russia. European sanctions were also aimed at stopping “the services necessary for the deep-water exploration and production of oil in the Arctic and the shale oil, including drilling services and testing, as well as geophysical research”. The list of equipment, required prior approval, included 30 kinds of products for the oil and gas industry [4].

URL: (Accessed: 04 November 2015)

In 2015, all sorts of US sanctions have been extended, expanded and affected not only the majority of Russian oil companies, but also the gas sector of the Russian economy, including de-

posits on the continental shelf of Russia. On the 8th of July 2015 the US Bureau of Industry and Security has identified the sanctions against some Russian energy projects15. The sanctions lists were replenished by the Uzhno Kirinskoye oil and gas field on the shelf of the Okhotsk Sea, a part of the “Sakhalin-3” project. Under the impact of the sanctions was the gas sector, “Gazprom” — a buyer of equipment for the Uzhno Kirinskoye field. Targeted sanctions against the Uzhno Kirinskoye field damaged the cooperation between “Gazprom” and “Shell” that announced its possible entry in the “Sakhalin-3” project in August (four offshore blocks in the Sea of Okhotsk — Kirinskiy,

Veninsky, Aiyashskiy and Vostochno-Odoptinskiy). Sanctions against the Uzhno Kirinskoye field made the ambitious project of “Gazprom” to increase the project “Sakhalin-2” by 5 million tons of LNG plant problematic16.

The US and EU sanctions undoubtedly limit the timing of projects, hydrocarbon exploration and production on the Arctic shelf of Russia, pose threats and risks for Russian companies. At the same time the Russian economy opened new opportunities for import substitution. The famous scientist, academician Laverov N.P. rightly believes that “sanctions on supplies and technologies for deep-water drilling, introduced by Western countries are not critical for the development of the Russian Arctic shelf” [5]. The Kara Sea, its shelf zone is at depths not exceeding 150—200 meters, so we should explore the small depth first. When we get to the greater depths, we’ll have our own supplies, own technology and consistent development. Therefore Laverov N.P. underlines that no urgent need for deep-water drilling is existing now. The oil and gas reserves we have are enough for us to move forward. “I am a supporter of a balanced approach, and I hope that we will not be rushed while deciding of the most complicated problems of the Arctic development”, — he said [5].

Conclusion

Despite the existing issues, it was important to ensure that the Arctic remained peaceful and stable region free from global conflicts’ impact during the USA AC chairmanship.

At the same time, one needs a clear understanding of the current situation and its complexity, while analyzing the economic and environmental problems in the Arctic region. The geopolitical situation develops in such a way that we should not expect the USA sanctions cancellation soon. Moreover, the Russian authorities should be prepared to the new sanctions, which may change the situation in the domestic oil and gas industry and affect other sectors of the Russian economy. It is important to take advantage of the moment, to create our own competitive technologies and to reduce dependence on other countries in the future development of the resources in the Arctic.