State of Alaska and Arctic Council Observer State Meeting

This event was convened by the State of Alaska to share Alaska’s interests in the Arctic from a state perspective, and also to hear from the Arctic Council (AC) Observer states about their priorities in the Arctic.  The meeting represented a step toward building relationships between Alaska and Observers.

Nils Andreassen explained that Alaska participates in the AC through the U.S. federal delegation, but independently the state has its own Arctic Policy.  It can be found online here.  The Alaska Arctic Policy was one of the first sub-national policy plans ever developed.  There are four lines of effort in the implementation plan for Alaska’s Arctic Policy, and within those there are action plans.  Alaska has a commitment to improving permitting and regulatory processes.  This is something that Alaskans have a lot of experience in, and do well at a state level, but can look across the Arctic and to Observer states to align these with economic development.

Alaska recognizes that it needs to create a positive investment climate and develop strategic infrastructure, which will depend not only on domestic capital, but also foreign direct investment, public-private-partnerships, and co-investment between multiple partners.  A concept of innovative practices should be deployed, which should include emerging technologies, best practices, and applied research.  Craig Fleener (Office of the Governor of Alaska) commented that where they are looking to move forward and build partnerships is in developing Alaska’s infrastructure.  Limited infrastructure makes it difficult to diversify the economy.

One of the Observer country representatives asked a question about economic diversification.  Currently, Alaska’s economy is heavily concentrated in services and support of extractive industries.  This leaves opportunities for Observer states that are well-capitalized to explore other opportunities in Alaska.  There are a few areas that have promise for investment in western Alaska – there is a graphite mine opportunity that is in need of partnerships.  There are also other opportunities in fish processing statewide.  The low interest rate environment creates capacity issues – more onshore seafood processing is being developed versus offshore floating processing.  There are also smaller-scale project-level opportunities in local communities – small housing projects or research and development projects.

Andreassen added that there is large potential for growth in the renewable energy market in Alaska.  The Alaska Center for Energy and Power at University of Alaska Fairbanks has identified micro-grid expertise as an area in which Alaska has an opportunity to export its expertise.

Fleener made remarks about shipping and the IMO Polar Code.  Alaska sits at the gateway to shipping in the Arctic, but has no major infrastructure to support future port development.  Given the extent of Alaska’s coastline, there is a tremendous opportunity for port development.

The state of Alaska thinks that countries should embrace reciprocal port agreements.  Andreassen noted the key feature of reciprocal port agreements is that vessels would sign up with a vessel tracking service, so it would be possible to see if a vessel is going off course, so the appropriate response can be deployed to assist the ship.  If employed, this would be incredibly helpful; currently ships do not need to sign up unless their destination is a U.S. port.

Drue Pearce (Crowell & Moring) responded to an Observer country representative’s question about the outcomes of the recent United Nations COP21 agreements related to black carbon emissions, and how Alaskans felt about them.  Pearce explained that despite the fact that very little of these emissions are coming from the Arctic, those in the Arctic are being disproportionately affected by climate change.  This is because when the amount emitted is so small, a required percentage reduction in emissions has a larger impact on operations related to black carbon.  Cutting from a low level is more difficult than cutting from a higher level.  If implemented, it would likely lead to a loss of the economic viability of the North Slope Borough in Alaska because they would no longer have a tax base (petroleum development) and therefore no way to continue to provide services to the people in that region.

Alaska has actively been engaged with addressing climate change in its communities for the past decade.  Many communities are well on their way to developing the plan to be where they need to be, but lack the resources to get there.  There are very actionable items in Alaska to be advanced.

Bob McCoy (University of Alaska Fairbanks) stated that one possibility for economic diversification is aerospace technology, as Alaska has two aerospace launch pads.  The aerospace system in Kodiak launches satellites into polar orbits using very low cost approaches.

UAF also has a supercomputer facility on campus.  One thing that has been lacking in the past is high bandwidth (although a number of projects within the state are underway to address this).

Bob McCoy added that UAF has been cooperating with Japan in monitoring the aurora borealis.  They are working on an application for smart phones that would be directed at tourists, assisting them in locating the aurora.  In addition, UAF wants to build an “aurorium” so the aurora can be seen and showcased during the summer.  Another project McCoy expressed interest in developing is a visitor’s center which would show visitors what the High Frequency Active Auroral Research Program (HAARP) facility is about.  UAF recently took ownership of this facility.

Bill Schnabel (UAF) stated that one barrier related to electricity microgrid implementation is battery technology, and where outside expertise could be of potential interest.

Chris Maisch (State of Alaska Division of Forestry) explained that boreal forests can emit large quantities of methane when thawing, while these forests have traditionally been viewed as a carbon sink.

Ms. Kazuko Shiraishi (Japan) stated that the Japanese government released its own Arctic Policy towards the end of last year.  Japan also has a joint research studies center at UAF, the International Arctic Research Center.  She asked if the state of Alaska was interested in supporting that type of international cooperation in research and development.  She also asked about what types of partnerships would be possible with the North Slope Borough.  Fleener responded that research and development is lacking, so it is good to hear that this area is a high priority for Japan.  For instance, Alaska has been working on cold climate housing in Alaska, and is looking for assistance on this topic.

Michael Daumer (Germany) stated that Germany specializes in telecommunications and satellite technology – areas they can work together on.  Daumer also noted that Germany’s Arctic strategy, developed in 2013, emphasizes the need to strike a balance between climate change and developing infrastructure and other types of technology in the Arctic.

Rossella Franchini (Italy) stated that Italy has expertise to offer regarding oil & gas exploration in the Arctic despite the fact that Italy is not an Arctic country.  Italy can help find the proper public-private partnerships for infrastructure projects in the Arctic.  Franchini added that there should be a more inclusive and welcoming environment within the AC.

Diddy Hitchins (United Kingdom) noted an area where there is mutual interest.  The U.K. has always had an interest in the commercial opportunities presented by the Northwest Passage.  Furthermore, in the U.K., there is the Polar Research Center at the University of Cambridge.  The U.K. has made it a rule for every U.K. Consul to visit the Arctic, because the U.K. is very interested in forming partnerships where appropriate and sharing technology.

Philippe Perez (France) stated that this was the first time that he has heard such devoted dialogue and discussion among Observer states.  He said the outcome of COP21 should be seen as positive news for Arctic countries, given that they are being impacted disproportionately by emissions from non-Arctic nations.  Additionally, Perez stated that France’s interest in the Arctic is mainly focused on science.

Juan Luis Munoz de Laborde (Spain) stated that Spain has its polar strategy written, and is set to distribute it soon.

He added that Spain has also been discussing reciprocal port agreements.

Fleener added that the AC mainly focus on large international issues, but doesn’t address issues at the subnational level.  These are two different approaches that are equally important.  For instance, food security is a daily issue for the majority of Arctic communities that is not a focus area of the AC.

An observer state representative asked a question about tourism.  In response, it was noted that the majority of tourism in Alaska takes place in southeast Alaska on cruise ships.  In the actual Arctic portion of the state, there is less tourism because of the lack of infrastructure to support it.