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The Art of Arctic Negotiation
Finding balance and identifying ‘who’s at the table’ is critical to development
By Isaac Stone Simonelli

rashing oil prices and banking investment policies that exclude many Arctic projects are changing the short-term and long-term landscape for development in the Arctic.

“Our Environmental and Social Risk Management framework and policies are a critical part of our due diligence requirements in sensitive industries such as oil and gas, mining, and consumer finance, and they help us identify, evaluate, and manage the environmental and social risks associated with our lending and investments,” Wells Fargo announced in a statement. “Wells Fargo does not directly finance oil and gas projects in the Arctic region, including the Arctic National Wildlife Refuge (ANWR)—part of a larger 2018 risk-based decision to forego participation in any project-specific transaction in the region.”

Wells Fargo’s decision comes in the wake of JPMorgan Chase and Goldman Sachs joining international institutes, such as Barclays and the Royal Bank of Scotland, refusing to fund exploration in the region.

Goldman Sachs made it clear that it would “decline any financing transaction that directly supports new upstream Arctic oil exploration or development.”

The Arctic Battleground
The Arctic has become a battleground between those pushing for the development of resource extraction projects and those fighting for environmental conservation, explains NANA Natural Resource Vice President Lance Miller.

“Whether it’s a picture of a polar bear or mountains in the Brooks Range, the Arctic can elicit images of those last untouched places. Even though people may never even want to go there themselves, [they’d] like to know that it’s possible. And I think it’s been the feedback from society but also media,” Miller says. “Also, climate change impacts are seen more drastically in the Arctic… it’s a poster child for climate change.”

However, Miller points out that oil field and mineral resource development are driven by global consumer demand for the resources. If there wasn’t a consumer and societal demand then such costly projects would not be economically viable, he says.

“Profitability is key in these kinds of circumstances. At the end of the day, if oil prices are high enough and oil prospects are attractive enough, I’m sure that Alaska will find investment,” Mouhcine Guettabi, an economist with UAA’s Institute of Social and Economic Research, told Arctic Today in May. “If prospects become uneconomic, then that becomes a much bigger problem.”

Many Arctic stakeholders are searching for a balance between environmental conservation efforts and the economic boost that projects provide to Arctic communities.

Voice of the Arctic Iñupiat President Sayers Tuzroyluk says that striking a balance when looking toward the development of ANWR and NPR-A is vital.

“Responsible Arctic development provides job opportunities for communities and a revenue base for local municipal governments that allows them to deliver basic services, such as education, to their communities,” Tuzroyluk says. “Today, having a home and providing for a family while continuing subsistence practices requires participation in the cash economy. Both jobs and municipal revenue provide the resources to practice subsistence more safely.”

A Seat at the Table
Whether it’s an issue of ivory bans restricting materials for Native artists, whaling quotas impacting Native subsistence communities, or oil and gas opportunities in the region—affected Native groups deserve a seat at the table, Tuzroyluk says.

“Indigenous people are the original stewards, and leadership still comes from Gwich’in and Iñupiaq people who stand to be most impacted by decisions made about the Arctic,” Northern Alaska Environmental Center Program Director Lisa Baraff says. “Organizations like the Gwich’in Steering Committee, which was formed in 1988 to protect the birthing grounds of the Porcupine caribou herd from mounting threats by oil and gas, remains an international leader. Organizations like Sovereign Iñupiat for a Living Arctic formed to ensure that Iñupiat voices are not left out of decision making processes. What this looks like is a strong coalition of Native and non-Native voices working for a vibrant, healthy Arctic.”

Environmentalists and developers have a long history of speaking for Native groups in the Arctic, with environmentalists vowing to protect traditional lifestyles and developers vowing to provide much-needed economic opportunities. Baraff makes it clear that Native voices should not only be heard in the discussion about Arctic development but should be dominant.

In 2016, Tuzroyluk responded to a letter from more than 350 scientists sent to then-President Barack Obama urging him to “protect vital habitats in the Arctic Ocean” stating that “no new oil and gas leasing or exploration should be allowed in the Chukchi or Beaufort Seas” in the name of protecting Native groups.

“As protectors of our land and waters, we understand more than anyone the need for balance.

“Our Iñupiat culture and traditional lifestyles cannot be sustained without careful management of our natural resources, so it’s important that we take a measured approach to any development—onshore and offshore,” Tuzroyluk wrote. “At the same time, we cannot be expected to survive without a stable, fully-functional economy, and the region is heavily-reliant on revenues from oil and gas development.”

“Indigenous people are the original stewards, and leadership still comes from Gwich’in and Iñupiaq people who stand to be most impacted by decisions made about the Arctic.”
Lisa Baraff, Program Director, Northern Alaska Environmental Center
NANA, which received 2.2 million acres as part of the Alaska Native Claims Settlement Act, relies on revenue and opportunities provided through its partnership with Teck in the development and operation of the Red Dog Mine in the Northwest Arctic Borough.

“Subsistence is prioritized as the highest and best use of our lands, and any development in the Arctic is done with an eye specifically towards protecting those resources. These lands also present an opportunity for responsible development that can benefit shareholders through dividends and jobs, as well as provide revenue for local municipal governments to deliver basic infrastructure that may not otherwise be feasible,” NANA Vice President of Lands Liz Cravalho says.

“The economic impacts of Red Dog are significant. Since operation began in 1989, the Red Dog Mine has paid $517 million to the state of Alaska in Alaska mining license taxes and state corporate income taxes. Additionally, it has paid AIDEA nearly $600 million in toll fees, and through royalties to NANA, NANA has paid out $1.4 billion to other ANCs from the 70 percent sharing of the resource revenues,” Cravalho says. “NANA and Teck, through the Red Dog Mine, have two agreements with the Northwest Arctic Borough. These agreements are the basis for the payment in lieu of taxes and the village improvement fund. Based on the current agreements, Red Dog Mine will pay a total of $18 million to $26 million to the borough annually.”

“Profitability is key in these kinds of circumstances. At the end of the day, if oil prices are high enough and oil prospects are attractive enough, I’m sure that Alaska will find investment.”
Mouhcine Guettabi, Economist, ISER
About 90 percent of the borough’s revenue comes from the Red Dog Mine.

“Throughout the Arctic, developers working with communities that include local indigenous populations need to consider the sustainability of the project alongside the economic viability of the project,” Cravalho says. “The AEC [Arctic Economic Council] highlighted five pillars for responsible resource development that a project and communities must consider, including human capital; built infrastructure to support the project; regulatory and permitting requirements; access to data and data sharing; and the overall economic viability of the project.”

The AEC’s Mineral Development in the Arctic report states that responsible resource development in the Arctic encompasses a comprehensive plan “to create sustainable economic benefits—consistent with the aspirations of the local Indigenous peoples—and to provide economic growth and long-term prosperity while protecting the environment.”

However, Baraff points out that even the language used in talking about development in the Arctic is loaded.

“Frankly, this term ‘responsible development’ has always bothered me. It is used by industry and politicians as a catch-all phrase to sugar coat development. It is not uncommon for project proponents to say, ‘Isn’t it better to have this large scale development in Alaska where we have stringent regulations rather than in some foreign country that does not?’ while lobbying for and supporting rollbacks to the very laws and regulations and agencies responsible for the touted environmental checks and balances,” Baraff says.

Power of the Public
Nonetheless, public feedback has had a significant impact on ConocoPhillips’ plans to develop its massive oil discovery on Alaska’s western North Slope.

ConocoPhillips abandoned plans to build a temporary island as a staging area as it moved infrastructure to the Willow site, located in the NPR-A, in response to public feedback.

“We wanted to take those concerns seriously and took the opportunity to try and find a way to get the support of the community for a different option to bring these modules to the North Slope,” Connor Dunn, ConocoPhillp’s development manager for the Willow project, told Alaska Public Media.

ConocoPhillips’ change in strategy to rely more heavily on ice roads to move infrastructure led the BLM to push back its final decision on the project.

“This is very indicative of how public comments can help shape best decisions,” Lesli Ellis-Wouters, a spokeswoman with BLM in Alaska, told Alaska Public Media.

However, Kuukpik Corporation President Joe Nukapigak made a request to extend the comment period on April 27 in a letter addressed to Willow Project Manager Racheal Jones and Steve Moore of the Army Corps of Engineers.

“Climate change impacts are seen more drastically in the Arctic … it’s a poster child for climate change.”
Lance Miller, Vice President of Natural Resources NANA
“Kuukpik NVN, the City, and Nuiqsut residents have spent nearly the entire public comment period responding to and dealing with a… threat to the community. It is simply not reasonable to ask the people of Nuiqsut to focus on oil and gas permitting when they have spent every single day of the comment period literally fearing for their lives and those of their families and friends,” Nukapigak wrote.

“The Supplemental DEIS and permit application were released when Nuiqsut’s need to focus on a swift community response was at its peak. People have been completely focused on protecting their health and that of their families and friends ever since. Though the SEIS was released on March 19, we don’t believe anyone in Nuiqsut has had an opportunity to focus on it until the last week or two at best.

“In short, the comment periods have not served their legal or practical purposes of giving people time to review the documents and provide feedback. Although a few people attended the ‘virtual public meetings’ (for what they were worth) and some may have had some time to review the documents themselves, we are not aware of any meaningful discussion within the community on the Supplemental DEIS or the 404 application.”

Despite the request, the public comment period for the alternative plan of heavier reliance on ice roads to move infrastructure in the Willow area ended on May 4, Baraff notes.

“Responsible Arctic development provides job opportunities for communities and a revenue base for local municipal governments that allows them to deliver basic services, such as education, to their communities… Today, having a home and providing for a family while continuing subsistence practices requires participation in the cash economy. Both jobs and municipal revenue provide the resources to practice subsistence more safely.”
Sayers Tuzroyluk, President
Voice of the Arctic Iñupiat
The alternative plan was in response to concerns about the possible impacts the temporary island might have on fishing and other subsistence activities.

“All wildlife resources are important (whales, seals, walrus, caribou, ducks, geese, and fish) as a food source and [to] our culture. They define us as Iñupiat,” Tuzroyluk says.

Value and Values
Baraff points out that there is also intrinsic value to wildlife in the region beyond being resources.

“Following ‘wildlife’ with ‘resources’ implies that wildlife is needed by someone or something to function effectively. Of course, there are elements to that from a human perspective and, for many, it takes ascribing value to justify protection,” Baraff says.

“There is inherent value in wildlife existing—and one could dive into ecological theories and the importance of healthy, unfragmented ecosystems to expound on that. Numerous mammals like caribou, polar bears, musk oxen, wolves, and others all call Arctic Alaska home (along with many that may not be considered as charismatic, like lemmings), as well as hundreds of species of migratory birds who travel from every corner of the planet to nest and breed in the Arctic in the summer months. Marine life (bowhead whales, beluga whales, and ice seals) health is also closely tied to what happens on land, as well as in nearshore waters. Many of these animals provide for the food security and cultural practice of Alaska Native peoples and hold deep spiritual and cultural meaning for many Native and non-Native people.”

Interactions between the industry and marine mammals, such as bowhead whales, are regulated by the Marine Mammal Protection Act through what are called “takes.” Alaska Oil and Gas Association (AOGA) President and CEO Kara Moriarty explains that she is currently working with Alaska Fish and Game on the next incidental take regulation petition on behalf of the entire oil and gas industry. The current one is set to expire mid-2021.

“A take is defined as anything that would change the normal activity of a marine mammal,” Moriarty says. “So for example, you are a truck driving down the road and you see a polar bear coming. And the polar bear sees you and turns and goes the other way. That is considered a take.”

The petition is based on the amount of anticipated industrial activity and modeling to estimate the number of takes during the five-year period, Moriarty explains.

“That’s what we do as AOGA. Collectively, we get the data. We work with the industry. We work with the agency. We put the petition together. I mean, that’s just one example of what we do,” Moriarty explains with regard to the association’s role in assisting in the responsible development of Alaska resources.

There are many organizations representing Arctic stakeholders, with the two high-level bodies being the Arctic Council and the US Arctic Research Commission.

“Two non-governmental entities that are important to consider are the AEC, which produced a paper on responsible mineral development in the Arctic, and the Inuit Circumpolar Council (ICC). The AEC comprises businesses from the circumpolar Arctic and works to promote development that happens with Arctic values,” Cravalho says.

“Inuit people are circumpolar, and ICC is an avenue for our communities to prioritize important issues including economic development and responsible development. ICC has shared the importance of ensuring development happens in ways that do not threaten Inuit food security but also promotes that responsible development can and should be led by Inuit communities.”

Cravalho also points to individual Arctic communities as stakeholders leading the charge for Arctic stewardship.

“Access to the Arctic is a challenge, and local communities are right there, experiencing the daily challenges and opportunities of the Arctic. Residents in the Arctic have the most to lose and are specifically invested in understanding and finding unique solutions to ensure good stewardship that protects the environment and a way of life that exists in the far North,” Cravalho says.