Government, Industry and Regulators Agree: “The Arctic Will Be Developed”

October 7, 2015 in Blog

On Tuesday, a panel of energy experts ranging from congressmen to industry advisors came together to discuss the challenges and prospects of Alaskan energy at the K&L Gates’ Arctic Development Event in Washington D.C.

Keynote speaker Senator Dan Sullivan (R-AK) kicked off the event with a clear message that environmentalists have nothing to cheer about regarding Shell’s recent announcement to temporarily halt activity in the Chukchi. With seven years, seven billion dollars spent and only one exploration well in 100 feet of water, the American people should be extremely concerned about the “out-of-whack” administrative regulatory delays for issuing permits and the serious threat this poses to the political and economic security of this country saying:

“The Arctic is going to be developed…It’ll be developed by countries with the highest protection standards like the US or Norway or those who don’t care like China and Russia.”

But the outcome is the same: The Arctic will be developed.

All six of the featured panelists echoed the Senator’s opening remarks in an overwhelming consensus for Arctic development. In his written summary, Senior Policy Advisor at the American Petroleum Institute Richard Ranger stated that the potential for development is no longer a prospect for the future:

“A long history of successful operations in Arctic conditions, characterized by continuing advances shows that most of US Arctic offshore conventional oil and gas potential can be developed using existing field proven technology.”

Representative Bob Herron (D-38, Bethel, AK) also called for a dynamic approach as Shell’s decision is “temporary” and he believes that the “opportunity will return.” He focused on “what Alaska can do to attract investors” in the interim, whether it be facilitating the development of exports in the Bering Strait or facilitating private and public investment for emergency infrastructure.

When asked by the moderator if the potential risks with maritime insurance and Shell’s recent activity were cause for concern about the broader industry, Senior Managing Director of PT Capital Francisco Sanchez replied,

“By 2035 the demand for energy is expected to grow 40% worldwide…I don’t have a crystal ball, but oil and gas won’t stay that low forever.”

Darrell Conner, government affairs counselor at K&L Gates, shared the same optimism, also calling Shell’s announcement “temporary” and expressed confidence that natural resources, new shipping routes, tourism and large scale fishing will ensure that development “will happen.”

The question of Arctic development is no longer a question of if, but rather when and how long it will take to bring online America’s great energy resource.