Drilling in Arctic Refuge to close deficit? Let’s be real.

The White House's Budget for 2018 proposes to open Area 1002 in the Alaska National Wildlife Refuge to oil and gas lease sales beginning in 2022/2023.

The White House’s Budget for 2018 proposes to open Area 1002 in the Alaska National Wildlife Refuge to oil and gas lease sales beginning in 2022/2023.

The White House’s budget will be delivered to Congress today. Called “A New Foundation for American Greatness,” the 62-page document proposes the coastal plain of the Arctic National Wildlife Refuge (ANWR) to drilling. Selling leases in Area 1002, as it’s known, would begin in 2022/2023, providing $900 million in revenue, which would help close the federal deficit. The budget estimates drawing in another $900 million from a second leasing round in 2026/2027. In total, the Trump budget proclaims in an associated document, called “Major Savings and Reforms,” that opening ANWR to drilling would reduce the federal deficit by $1.8 billion.

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The “Major Savings and Reforms” to be made by drilling in ANWR.

The White House proposes to share revenues “equally with the State of Alaska.” The $900 million or so that would come in the next ten years, however, will just be a drop in the bucket for a state that has faced year after year of severe budget deficits since the price of oil crashed in 2014. This year, the budget deficit was estimated to be $2.92 billion. If faced with a worst-case scenario where an approximately $3 billion budget deficit becomes the norm for the next ten years, $900 million looks like an even paltrier amount in comparison. Revenues and royalties could be generated once commercial drilling began in ANWR, but that would take years. In the meantime, Alaska could have been striving to develop alternative industries like wind and tidal energy rather than banking on potential profits from opening up an ecologically sensitive area to drilling.

Obama and Trump’s budgets compared

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A comparison of Obama’s 2017 budget with Trump’s 2018 budget reveals that the former mentions climate change 36 times, while the latter only mentions it once.

As the potential opening of ANWR indicates, the replacement of Barack Obama with Donald Trump in the White House has caused federal priorities in the Arctic to shift dramatically. Comparing Obama’s final budget, for fiscal year 2017, with Trump’s 2018 budget further illustrates those contrasts.

The Obama budget highlighted topics like “Coastal Resilience,” explaining, “The Budget also provides the Denali Commission—an independent Federal agency created to facilitate technical assistance and economic development in Alaska—with $19 million, including $5 million to coordinate Federal, State, and tribal assistance to communities to develop and implement solutions to address the impacts of climate change.” The Obama budget also sought to invest $100 million across a number of additional agencies to deal with climate change while allocating $150 million for a Coast Guard icebreaker in the Arctic to tackle related problems.

Issues like improving American Indian and Alaska Native access to healthcare were also prioritized under the Obama budget. One line-item for 2017 estimated that standardizing the definition of who qualifies as American Indian and Alaska Native under the Affordable Care Act would increase the budget deficit by $520 million over the next decade. While the previous White House was spending money to try to improve healthcare for vulnerable and historically disadvantaged populations, the current White House wants to “save money” by cutting billions of dollars in funding to the Medicaid healthcare program for low-income individuals and food stamps.

Climate change or “other change”?

Another stark contrast is that the Obama 2017 budget mentioned climate change 36 times. The Trump budget mentions it zero times.

That should come as no surprise seeing that Secretary of State Rex Tillerson hardly dared utter the phrase while speaking at the Arctic Council Ministerial Meeting in Fairbanks earlier this month. Reading stiffly from a set of prepared remarks, Tillerson said, “And finally, the Council has strengthened resilience at the national and local levels in the face of environmental and other change.” When the nation’s top diplomat won’t even call a spade a spade, the prospects for agreement between the U.S. with the other Arctic Council member states, let alone the rest of the climate-concerned international community, are dim.

(For fun, you can compare Tillerson’s stilted six-minute remarks in Fairbanks with former Secretary of State John Kerry’s 23-minute off-the-cuff speech at Iqaluit two years prior:)

Fly me to the moon: Prudhoe Bay from above

Deadhorse, Alaska

Deadhorse, Alaska. Photo: Mia Bennett

Prudhoe Bay, Alaska. The place where polar bears butt heads with the petroleum industry – literally. “If a bear’s spotted, work’s usually called off for the day,” a man in Barrow, 200 miles to the west, told me. Oil workers try to scare away the bear – sometimes a polar bear, sometimes a grizzly – and condition it so that it doesn’t come back in search of food.


On my recent trip to Alaska, I didn’t have the chance to stop in bear-battled Prudhoe or nearby Deadhorse, which houses the airport, lodging, and store for the oil workers. Deadhorse is also the end of the Dalton Highway, which starts north of Fairbanks some 400-odd miles to the south. I did, however, get to fly in and out of Prudhoe Bay airport, which in winter appears to miraculously emerge out of the white tundra.

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Ascending out of Anchorage over the Talkeetna Mountains.

Flying from Anchorage, our airplane soared over the Talkeetna Mountains and the Alaska Range. I dozed off soon after the snow-capped peaks transitioned into the relatively flat white plains of the Yukon-Tanana Uplands. When I woke up an hour later, the packed Alaska Airlines flight was descending into Deadhorse, laden with cargo for the winter construction season. The seats that would normally take up the front half of the airplane are replaced with a cargo hold on the airline’s 737-400 Combi planes. Winter is the big construction season in Prudhoe Bay because it’s the only time of year when the ground is solid and snow-covered. This permits driving on the tundra without permanently damaging it.

Deadhorse/Prudhoe Bay Airport, Alaska.

Sitting on the tarmac of the moon. Deadhorse/Prudhoe Bay Airport. Photo: Mia Bennett

I looked at the view from my window seat and felt like we were descending onto another planet. It was a clear day and the sun bounced off the spindly network of chrome-colored pipes that criss-cross the North Slope. Straight, unwavering pipelines cut across meandering frozen rivers. All of the infrastructure out here is built on manmade gravel pads, for nothing can sit directly on top of the shifting permafrost, which thaws and refreezes every year. In this part of the world, gravel is almost more valuable than oil. The tiny rocks we take for granted down south are in short supply up north. No construction or excavation can happen without gravel.

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Straight pipelines intersect with meandering rivers in Prudhoe Bay in winter. Photo: Mia Bennett

The gray gravel pads are all but invisible in winter, however, and instead, the hundreds of miles of pipelines seem to stretch magically across the landscape. It is beautiful in its own way. Human ingenuity (or idiocy, depending on your point of view) has transformed an area that was once primarily used for local subsistence by the Inupiat people into a export-oriented resource frontier by dredging up the ancient seabed underlying the North Slope.

Prudhoe Bay is North America’s largest oil field. The extent of this industrial moonscape blew me away. It measures some 213,543 acres, or approximately 15 by 40 miles. That’s more than double the size of New York City and still significantly larger than Los Angeles. We flew over the oil field for a good long while before the platforms and pipelines faded into the west. Out here in mid-winter, it was impossible to tell where the tundra turned into the ocean, for both were frozen solid.

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Taking off again from Prudhoe Bay airport, headed east towards Barrow.

“In space we read time,” reflects German historian Karl Schlögel. Above Prudhoe Bay, I felt as if I was witnessing modernity in all its silver-plated excesses. The sight was all the more jarring having come from Anchorage, where I had wandered down the old main street and read about the bustling heydey of a past boom centered around the construction of the Alaska Railway. Faded murals and maps of the “Last Frontier” were the chief reminders of this wealthy era in the city’s history. Up in Prudhoe, what will this extreme edge of the rush for Alaska’s resources look like when the oil runs dry? Abandoned pipelines and platforms might then no longer epitomize a future-forward modernity, but rather a rusty past.

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The main drag in Anchorage, where curio shops have replaced saloons and even a Japanese restaurant that bustled during the construction of the Alaska Railway.

Tillerson’s hearing: Would U.S.-Russia partnership worsen Arctic climate?

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A protester disrupts ExxonMobil CEO Rex Tillerson’s Senate confirmation hearing for Secretary of State.

At today’s Senate confirmation hearing for President-elect Donald Trump’s nominee for Secretary of State, Rex Tillerson, expected topics like Russia, nuclear weapons, and Mexico came up. Climate change did, too, but the Arctic received short shrift. In searching the transcript of the lengthy proceedings, I found that the region was only mentioned twice: once by a protester and once by the oilman himself.

Yet even though it was little mentioned, the Arctic possesses a broader connection to the global issues that were discussed at the hearing, particularly the possibility of improved relations between the U.S. and Russia if Tillerson, a recipient of the Russian Order of Friendship is confirmed as Secretary of State. If the U.S. and Russia partner together in developing Russia’s offshore reserves, this could exacerbate global warming and the melting of the Arctic – a point that a protester made loudly clear above the calm and calculated voices of the senators in the room.

At one point, as Senator Ron Johnson (R-Wisconsin) was pressing Tillerson hard on Russia, a “RejectRexx” protestor interjected and unfurled a banner. The woman yelled, “Why is Tillerson friends with Putin? Because they both want to drill and burn the Arctic. That will ruin the climate and destroy the future for our children and grandchildren. Please don’t put Exxon in charge of the State Department. Protect our children and grandchildren – please don’t put Exxon in charge of the State Department.”

The protester was escorted out of the building, but her observation regarding the shared interests of Putin and ExxonMobil are correct. Both the Russian state and multinational corporation want to exploit the Russian Arctic’s supposedly vast reserves of oil and gas. Sanctions, however, have halted the pursuit of a joint project between ExxonMobil and Russian-state owned oil company Rosneft. This point, a rather sore one for ExxonMobil, came up later in the discussion when chairman of the Senate Foreign Relations Committee, Senator Bob Corker (R-Texas), asked whether ExxonMobil had lobbied against the sanctions.

Tillerson responded:

“I never lobbied against the sanctions. To my knowledge, ExxonMobil never lobbied against the sanctions. ExxonMobil participated in understanding how the sanctions were going to be constructed and was asked and provided information regarding how those might impact American business interests.

The only engagement I had really came after the sanctions were in place. ExxonMobil was in the middle of drilling a well in a very remote part of the Russian Arctic in the Kara Sea, several hundred miles way from any safe harbor. When the sanctions went into place because of the way they were written, they took immediate effect. There was no grace period, there was no grandfathering period. And I engaged immediately with the State Department and with Treasury and OFAC to explain to them that there was significant risk to people and the environment if  – and we were going to comply with the sanctions, fully comply – but that compliance meant immediate evacuation of all these people, which was going to put lives at risk and the environment at risk because this was a wildcat exploration well that was at a very delicate position at the time. [We] provided a lot of technical information to OFAC and the State Department [and I was] thankful that it took about five days for them to understand that.

ExxonMobil stood still while they were evaluating that, and, in the end, did grab a temporary license to allow that work to be completed safely so that we could get all the people then out of the country and get all of the equipment that was subject to sanctions out of the country, including the rig. That was my direct engagement, really dealing with an effect of the sanctions. So the characterization that ExxonMobil lobbied against the sanctions is really not accurate.”

Playing Russian roulette with global climate

ExxonMobil may or may not have specifically lobbied against sanctions. But it’s clearly in the company’s long-term economic interest to drill in Russia and to drill in the Arctic, two activities which would inevitably add to global carbon emissions and exacerbate climate change. Thus, it’s pretty hard to imagine that Tillerson, as Secretary of State, would continue the Obama administration’s legacy of getting big climate agreements signed.

Senator Edward Markey (D-Mass) expressed, “The world expects us to be the leader on climate change. Please give us those assurances, that you will guarantee that the State Department will be the leader as it has been in advancing a climate agenda for our country.”

Tillerson gave no such assurances, as Emily Dreyfuss wrote in an article for WiredHe didn’t even confirm that he believes humans are causing climate change.

He was, however, more forthcoming regarding his hopes for a rehabilitation of relations between the U.S. and Russia. Tillerson felt that Russia is “predictable” in its activities, as they are “very calculating, very strategic in their thinking, and they have developed a plan,” he claimed. “There is scope to define a different relationship that can bring down the temperature around the conflicts we have today,” added the Texan native.

The irony is that if cooling the temperature of the U.S.-Russia relationship leads to a lifting of sanctions and a resumption of joint exploration of Arctic offshore oil, it could raise the planet’s thermostat. This potential chain of events adds another dimension to the Arctic paradox. Generally, this catchphrase describes the fact that as climate change melts the Arctic ice cap and jeopardizes northern ways of life, it opens up more opportunities for economic activities like oil drilling and shipping that will further destabilize the climate.

Now, a new twist to this paradox is that if relations between the U.S. and Russia are improved under a Trump administration with pro-oil Tillerson at the helm of the State Department, this could worsen the outlook for the global climate. A lot of positives could come out of improved relations between these two countries, but playing Russian roulette with the global climate by drilling in the Arctic isn’t one of them.

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Perhaps all that may be left of the frozen landscapes of the Russian Arctic one day will be photographs, like this one on display in Moscow in summer 2015. Photo: Author.