Russia Uses Extortion in the Arctic as Red Tape Prevents America From Drilling in Alaska

 

Russian President Vladimir Putin is launching an aggressive campaign to control more of the Arctic's oil-rich territories in response to plummeting oil prices. With a nation for whom oil represents 20% of its GDP, control of the Arctic would allow for pivotal economic advantages that would come at the detriment of the American oil market.

In November, Russian outlets reported the Kremlin was seeking to establish a ministry for Arctic development. The Kremlin denied the reports, but Putin nonetheless discussed a need for a “flexible, fast-working structure” for Arctic policy. With the Russian ruble dropping, Russia needs to respond to its economic woes swiftly. To that end, the Russian government is now arguing the “underwater Lomonosov and Mendeleyev ridges demonstrate that Russia’s continental shelf extends far beyond its current 320-kilometer waters [199 miles].” This adds 1.2 million square kilometers (463,322 miles) to Russia and access to 5 billion oil and gas reserves.

The startling declaration is in line with past Putin administration disregard for international conventions. The Russian government does not follow environmental regulations or allow green groups to delay a potential process to feed the economy. This allows it to act faster than the United States regarding oil development. 

This week, Putin told the world “Russia was ready to pounce on Arctic oil and gas development and shipping.” Russia did exactly that, unplugging an oil reserve richer than the Gulf of Mexico.

Legal and government delays prevented the American government to respond with any urgency to this development. Environmental groups brought the issue to court, while Congress will not touch the Law of the Sea Treaty. As America delays, Russia continues to build its military presence in the Arctic, which will only cause more problems for America. 

In 2013, Russia sent the missile cruiser Peter the Great with “10 warships and four nuclear-powered ice breakers to the New Siberian Islands.” These icebreakers are the largest in the world, which includes the 50 Years to Victory, the most powerful nuclear icebreaker. Quark Expeditions claims the ship can “go where other ships cannot.” In addition to its current inventory, Russia is currently developing another nuclear-powered icebreaker ship. 

America, meanwhile, owns only one icebreaker with the capability to cut through the thick Arctic ice.

Russia also built ten search and rescue stations and sixteen deepwater ports. The country plans to build thirteen airfields and bases along with ten air-defense radar stations, which “permit the use of larger and more modern bombers.” New York University Professor Mark Galeotti points out that by 2025, Russia will patrol the Arctic waters “by a squadron of next-generation stealthy PAK DA bombers, but even now cruise missile-armed Tu-95MS and Tu-160 bombers can cover the polar region.” Galeotti said the use of bombers allows Russia to cut off access to the Arctic:

This is all very impressive, but it begs the question of just what these forces are meant to do. Bombers cannot dig for oil, infantry cannot collect taxes from passing Chinese container ships.

But they can board and occupy oil rigs, seize cargo ships and threaten any forces that seek to challenge Moscow's right to do this. After all, it may be impossible to "occupy" the Arctic, but Russia is developing assets that could deny it to anyone else.

Why place military assets-- which have no ability to harvest natural resources-- in an area humans do not live? Galeotti says it is a form of extortion:

This is, after all, simply an extension of its policies elsewhere, from Ukraine to Syria or Iraq: Cause the West problems, then offer to resolve those problems, in return for an appropriate "consideration." This may look like an ingenious approach for a country without the political authority, economic muscle or allies to be able to get what it wants. But there is also another word for it: extortion.

The United States' oil reserves on its own soil-- namely, Alaska-- can prevent the Russian ploy to monopolize the Arctic from harming the American economy, were anyone to tap them.

The Trans-Alaska Pipeline System (TAPS) keeps the West coast safe from Russia by providing the West with 14% of domestic oil. However, it needs more oil to stay active. If it shuts down, the West coast refineries will turn to Russia for oil, since no oil pipelines in America and Canada reach the coast. TAPS shut down in 2011, which forced the refineries to purchase oil from Russia and Oman. The area imported 105,000 barrels a day from Russia and 96,000 barrels of Oman crude during October 2010 when the pipeline was functioning.

TAPS needs a constant flow of oil to stay in operation because low amounts to no oil in the pipeline produce hazards. The main hazard is water, which can collect in low-lying spots of a pipeline without a constant flow.

“The primary factor that affects internal corrosion in transmission pipelines is flow rate,” said Trevor Place with Enbridge Pipelines. “Transmission/refinery-ready crude oils (including dilbit) contain very little corrosion-causing water or sediment, but internal corrosion can occur if the flow conditions in the pipeline allow these materials to accumulate and persist on the pipe floor for extended periods of time. No crude oil grades have yet been proven to be more corrosive than others, but there are measurable variations in certain corrosion-related properties of crude oil.”

In an article for Roll Call on November 12, Mead Treadwell, lieutenant governor of Alaska, said people in Alaska are ready to tackle the oil and gas reserves. The reserves amount to 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Currently, lawsuits and red tape have delayed all drilling in northern Alaska. Treadwell offered three easy steps to get the job started:

First, for economic security and national security, Obama and the new Congress should make sure the U.S. goes forward with Arctic offshore exploration in the summer of 2015. This is an opportunity for Republicans and Democrats to push aside partisan differences and focus on an issue that provides an economic opportunity for the United States as well as ensures that the United States remains a global leader in energy exploration.

Second, the U.S. seeks to implement new Arctic regulations that will determine how we develop energy resources for years to come. Regulators would be wise to resist being prescriptive, and instead incent companies operating in the Arctic to innovate and incorporate the safest technologies possible. The Chukchi Sea is the prize, believed to hold the world’s largest untapped oil and gas resources. Companies have invested hundreds of millions of dollars in emergency planning and technologies. The science shows that we can drill in the Arctic safely.

Third, a major U.S. Arctic oil discovery will enable two other decisions to catch up with Russia. Safety measures necessary for oil production will demand new icebreakers, and infrastructure including a new Arctic port in Northwest Alaska. The value of offshore real estate should force a Senate discussion of what we want, and don’t want, in law of the sea. Believe me, we do want our share of Arctic offshore territory.

The Subcommittee on Europe, Eurasia, and Emerging Threats scheduled a hearing on Thursday about America’s opportunities in the Arctic. Admiral Robert Papp, Jr., the US Special Representative for the Arctic, will be the witness for the committee. 

Russia Uses Extortion in the Arctic as Red Tape Prevents America From Drilling in Alaska
Sun, 07 Dec 2014 14:49:03 GMT