The Geopolitics of the Arctic

Scott Borgerson and Paula Dobriansky discuss the economic, environmental, and security implications of a changing Arctic region and its significance for the United States.

FRANK SESNO: I'd like to welcome you to the Council on Foreign Relations meeting. I'd also like to welcome CFR corporate members from around the nation and from around the world who are participating in this conversation today via teleconference. Now, the requisite requests regarding cell phones and other dangerous devices, could I ask you to turn them off -- not just on stun, but completely off -- because otherwise they have a tendency to interfere with the sound system that we're using here for you to hear us and for those from around the world to hear us. As a reminder, this meeting is on the record, so what you say can and may be used against you -- or in favor of you, as the case may be.

Before we begin with today's program, the Council is also pleased to announce an upcoming meeting on Monday, December 19th, on the American Agenda for U.N. Reform. For more information on that and all upcoming events, please refer to the insert in the back of today's program. Now, we will converse here for about a half an hour and then I will turn to the audience for questions, and I know there are plenty of them, so I look forward to a genuine dialogue.

As you know, our speakers today are both incredibly knowledgeable on the subject of the Arctic, what is taking place there and what is at stake there. Scott Borgerson is co-founder and managing director of CargoMetrics. He's a senior fellow, Institute for Global Maritime Studies.

Paula Dobriansky most of you know very well. She's now senior vice president and global head of government and regulatory affairs at Thomson Reuters. She's also a former undersecretary for democracy and global affairs at the U.S. Department of State and has been to both poles. (Chuckles.)

So welcome to you all.

Scott, let me get this started with you. You've written a lot on this subject, and some of this is really very serious stuff that you've written. You said -- this is from a piece you wrote a couple years ago, "The region is in the midst of transforming from a frozen, sleepy, backwater into a potential epicenter of world affairs." It's the Gold Rush. It's the arms race, potentially. It's about sustainable development and whether it's going to be a free-for-all.

Here's what you wrote: "The Arctic is the fastest-warming region on Earth and continues to melt at a breathtaking rate. The next few years will be critical in determining whether the region's long-term future will be one of international harmony and the rule of law or a Hobbesian free-for-all." Wrote that two and a half years ago. How are we doing?

SCOTT BORGERSON: Well, first, climate change is why we're here, and so we have to acknowledge the fact that the Arctic is changing. It is warming. What is consistent with that piece several years ago is that the Arctic remains warming at twice the rate of lower latitudes. The sea ice continues to retreat at an exponential rate.

A few statistics, before I sort of lay out the scorecard, as I see it. The polar ice cap is half its overall thickness from what it was just 30 years ago, and the sea ice is retreating much, much faster than the climate models had predicted. And over the past five years, including the last two, they are the minimum sea ice retreat on record since we started tracking that. The shipping lanes are open in summer longer than they have before. In fact, this past summer it was open one month longer than it was in 2010, and that's a fact.

So people who live there -- I know we have people from Arctic countries here, and their embassies. When you talk to in particular indigenous communities who live there, the Arctic is warming, it's changing, the ice is melting, et cetera. And so that's a -- that's a catalyst for change.

I administered a course in why it's happening, and there is a heated science debate about that. But in this context I think we should just accept that it is happening, and I think that's not up for debate. So if it's happening, then what are the consequences? And that piece started to lay out that the Arctic had gone through various transformations in the minds of policymakers throughout international relations, from British exploration to a focal point of the Cold War, to forgotten, I think, largely at the end of the Cold War, to a few years ago, I think, people were awakening to this region that -- w

When you're in Washington and you're looking at a Mercator projection, you forget Alaska is -- Governor Palin reminded us in the presidential campaign a few years, you could see Russia from there.

SESNO: From her front porch, I think it was.

BORGERSON: And that's a -- and that's a worldview that a lot of policymakers in Washington, I think, forget.

So I was trying to say that, at the time, that with that change for American policymakers in Washington, they need to reawaken with a polar worldview, and that the Arctic was at a sensitive point in its trajectory -- that it could be, one, a future based on cooperation and stable regimes, et cetera, but that requires proactive work. Or if it doesn't, that it could go in a different direction.

And I think the story's not over, but on balance the scorecard is we're leaning towards sort of that cooperation future we all hope for.

SESNO: Ah, sort of -- OK. A hopeful, optimistic note.

Paula, your sense of this? Hobbesian free-for-all? Rule of law?

DOBRIANSKY: No, I actually -- maybe I'll disappoint you. I think I come out in the ledger, I would say, the way that Scott does, and let me say why. First of all, it's worth noting -- and I'm going to take this from a slightly different direction -- it's worth noting that from the U.S. government standpoint, in 1994 there was a comprehensive policy statement about the importance of the Arctic and our strategic interests in it. At the end of the Bush administration, there was actually in January of 2009 a national security presidential directive that was signed which attached a great deal of importance as well to the Arctic for the United States and our security, national security interests.

It's worth noting that before that there was a meeting, by the way, also in Greenland, and in which a number of Arctic nations came to it and in which there was a discussion also in the issuance of the Ilulissat Declaration -- which, by the way, did call for cooperation and collaboration. So I will point to the fact that there have been documents, if you will, and frameworks not only from officially the U.S. standpoint, but also more collectively the region standpoint, in trying to work cooperatively, collaboratively.

Let me add one other element into the mix -- which as a former undersecretary, of which I was part of -- and that's the Arctic Council. The Arctic Council, which strives to do what Scott underscored in its context, in its limited context. And I say limited because it's not a body that has -- it's not legally binding. But it does bring countries together in undertaking, the Arctic nations together, in pursuing collaborative approaches -- and particularly collaborative approaches in areas that matter.

Climate change, it issued a very significant report in the '90s looking at climate change, particularly in the Arctic. It also produced a health report looking at the ramifications of the melting ice and its impact on communities in the north and what this has done for health, related to those communities. And it goes on from there. So I come out in the same direction. I think that -- I think that there is a competition in this mix, but I think that there's a real desire by countries to try to work out collaboratively how to sort through that competition.

SESNO: Well, I want to get to the competition and to the Arctic Council and a few other things, but let's establish the stakes for just a minute here, going into this conversation. Because you both -- you're both very aware of this, as is much of the audience. I mean, we're talking about navigation, access, resources, environmental concerns. I'd like you to prioritize those as you see them and any other concerns you may see so that we really are establishing what we're talking about here and what the stakes are for the region and for the world.

BORGERSON: Well, there's economic stakes and there are geostrategic stakes. Actually, my current interests now are in the economic stakes and how to develop those sustainably. But let me give kind of a quick sort of shopping list that I think --

Oil and gas: There's a USGS survey that's widely quoted. These are unproven reserves. Twenty-two percent of the world's remaining oil and gas is up there. It's mostly gas and oil, but it's a lot. The shipping routes, the -- passages over the -- North America and Eurasia, but also potentially a polar route right across the middle. Control of those, access, those sealanes. You have read -- (inaudible) -- this is not a new story.

Some of the largest mineral reserves are in the Arctic. The largest nickel mine is in the Arctic. The largest zinc mine is in the Arctic. The Arctic is believed to hold much of world's iron. Precious metals, rare-earth elements which currently China has a monopoly on, but actually there are huge reserves believed to be in Alaska and other parts of the Arctic.

Renewable resources like geothermal, wind, tidal. Not so much solar in the winter, but Iceland has built a nice aluminum smelting business on its geothermal capabilities. Satellite downlink stations, telecom. Facebook and Google are building data centers in Norway and Finland, given the access to energy and the cool temperatures, et cetera.

So the Arctic is -- I think of the Arctic really as the world's final emerging market. And so like an emerging market, it has a lot of economic opportunity in natural resources, but shipping lanes and other things as well.

SESNO: Paula, how do you prioritize these issues?

PAULA DOBRIANSKY: Well, I'm going to -- actually, I brought it with me because the description of the presidential directive -- and let me add that also, fast-forward in this administration, you alsohave the QDR from the Pentagon and also the QDDR -- (chuckles) -- from the State Department, both of which have highlighted this area, the High North, as being of strategic interest and strategic importance.

But the areas identified in the presidential directive were natural resources -- oil, natural gas, methane, hydrates, minerals and living marine species -- energy security, missile defense and early warning capabilities, deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence and maritime security operations. Those were the categories defined.

SESNO: So you defined the categories and the stakes. You both struck a fairly optimistic note and you've talked about the Arctic Council. But then where do you put into this picture declarations from the Russians about building up their northern fleet, potentially setting up an Arctic command, proclamations from the Canadians -- who I believe are here with us today -- about having carriers in the region and the -- you know, the very assertive claims on the region that the Canadians have stated, where the United States is a player -- I mean, this is not an area that is absent competition, to include military competition. Where is that going?

BORGERSON: Russia is about to submit its claim over the Arctic Extended Continental Shelf, which is following the Law of the Sea Convention, but they planted a flag with much fanfare there. The Chinese are building icebreakers faster than we are.

SESNO: Because the Berinese (ph) is an Arctic nation, I think, last time I checked on my globe.

BORGERSON: Exactly. Don't forget the United States still has 36 F-22s stationed at an Air Force base in Alaska. Rhetoric in Ottawa is -- I mean, talking with my Canadian friends, it's mostly for politics, but Prime Minister Harper has been assertive about making statements about defending Canadian sovereignty. We disagree with the Canadians on the status of the Northwest Passage, and so on. And then Russia, Norway and Denmark are reorienting their security policies to make protecting their Arctic interests to be a priority.

SESNO: Well, what do you make of this? Where is -- you know, we talk about the cooperation, but we're also talking about a certain militarization.

BORGERSON: Well, there you go. That's about -- that's the scorecard, both sides of it. I think Paula ran through some of the things that are on the cooperative side of the scorecard. I think those outweigh those other issues.

We're stationing each other on icebreakers to do that science. We're mostly friendly and -- there was a recent search-and-rescue agreement that came out of the Arctic Council. Although we've not signed the -- joined the Law of the Sea Convention, if there's anything I can say today -- I don't know if --If anybody here, by the way, is not for the Law of the Sea Convention, raise your hand so we can publicly flog you. (Laughter.)

SESNO: You're bringing a whole new taste to the Council on Foreign Relations.

BORGERSON: Tell your senator that you're going to not vote for them and not give them money if they don't advance the Convention next year. It's an embarrassment that we've not joined this treaty.

But by and large, we follow it. Other countries follow it, et cetera. So the point is -- and I'd love to get going on Law of the Sea, if you want to go back there. But overall, we're definitely tilting, I think, towards more cooperation.

But if you view the world as sort of states-act-in-their-self- interest, and sort of -- et cetera, et cetera, one can make a case, based on the things you raised and some other things, that maybe Russian intentions aren't as pure as we might think of them to be, or maybe as building up this sort of naval and arms -- armed capability, while it looks to be protecting sovereignty, et cetera, et cetera, rearming the Arctic could be dangerous.

SESNO: You're not concerned -- you're not concerned about that Russian flag that was planted?

BORGERSON: No.

DOBRIANSKY: In my opening remarks I mentioned that competition is afoot, but I also -- I lean on the side -- maybe I'm an optimist -- that most countries, when it comes down to it, they will strive to resolve disputes. But I wouldn't minimize the fact that there is competition afoot.

And by the way, you know, you mentioned Russia. When I was looking back at materials in preparation for today's discussion I was very struck by the fact that you actually -- you do have a good number of disputes. And by the way, the disputes, they might be we have disputes with Canada. There are other countries that have had disputes with Russia. There are multiple disputes, and in different sectors out there.

But I think what it comes down to is also you do have heightened interest and engagement. It strikes me that, let's take on the continent of Europe, the E.U. has prioritized and put this as an important issue commercially before itself. NATO has also done so as well -- in fact, one of the papers a Council member, Bruce Weinrod, wrote a paper on, you know, trans-Atlantic security issues in the High North. And it documents a number of the kind of discussions that are ongoing right now within NATO. The U.S. Navy has put forward a five- year plan looking at, you know, assets in the -- in the High North.There is competition going on, but your fundamental question is do both of us think that there are instruments out there, and there are also political pressures that are out there that will hopefully drive these various conflicts into channels where they are moderated and mediated, rather than breaking out into some full-fledged conflict and brawl.

SESNO: Or competition.

DOBRIANSKY: Or competition. Competition is a little bit more challenging in the economic sense.

SESNO: I'm talking about from the military --

(Cross talk.)

DOBRIANSKY: But military -- in the military context, I think, again, the fact that all of these issues are being spotlighted now, I think there's a strong desire to try to put them in a framework where it doesn't go out of hand.

BORGERSON: If I may, let me add two quick points to that. From a Russian or a Canadian perspective, we actually reshuffled our combatant commands to give NORHTCOM operational authority there, A. And B, while climate change is a bad story for small island nations (with low ?) sea level, Russia is a big winner with climate change, and Greenland might be the first nation born from climate change. And those are real changes.

DOBRIANSKY: By the way, Frank -- forgive me -- Scott had said something earlier I didn't want to let pass, because I thought it was important. He mentioned about how countries are -- and you mentioned Russia, you know the submission of its claim. There is a process, a unit for, actually, through the Law of the Sea for the submission of --

SESNO: I wanted to ask about Law of the Sea --

DOBRIANSKY: And I will also agree --

SESNO: That's what I was -- (inaudible) -- will you join the flogging?

DOBRIANSKY: Yes. I didn't raise my hand -- I don't know -- but then I'd be publicly flogged here. (Laughs.) But no, I really think that we should be moving forward on Law of the Sea. The last administration, the Bush administration, put it before our Congress. There was agreement. This administration, to my knowledge, has --

SESNO: How would that help? How would that resolve these issues further for --

DOBRIANSKY: Well, first, I'd start with the fact that the United States would have a formal seat at the table. I mean, in any kind of negotiation or process, I think everyone in this audience knows it's better not to be on the side, but it's better to be at the table and formally and directly part of the process.

Secondly, it's what Scott said earlier, which is as you go forward and you identify your zone -- you know, the EEZ -- EEZ zone, you know, your territorial claims, there's a process to do it by which. And in this case, the Law of the Sea provides that.

SESNO: What will it take for this country, this Congress, any Congress, to do this? We are very reluctant.

DOBRIANSKY: Well, I have to say I'm truly baffled as to why this has not gone through. I really am. Because you have support from the Department of Defense; you've got support from the Department of State; you have support from the executive branch. And as I said, this was with the last administration, that is with this administration. So I really -- I'm a bit baffled as to what the core arguments are as to why this hasn't moved forward.

SESNO: Scott?

BORGERSON: This might be the one issue that environmentalists, industrialists, oil companies, military brass, Republicans -- most Republicans, Democrats, all agree on. We can't seem to get anybody on the Hill to agree on anything, but they agree on this. And I think this would be a big win to show bipartisanship if the Senate could exercise its constitutional authority under Article I and actually give advice and consent on a treaty.

SESNO: Well, those are the big ifs, unfortunately.

BORGERSON: Not to forget, not just the Arctic, but our entire naval doctrine is based, predicated upon the concept of freedom of navigation. And that is enshrined in this convention which, by the way, we wrote and got the international community to change on our accord, to amend, after we wouldn't --

(Cross talk.)

SESNO: Well, this issue is the poster child for gridlock in this town. I mean, this is -- this is -- this is, you know, casualty number one.

Paula, you mentioned the Arctic Council. Let me ask you about the Arctic Council for a minute, because that's what we're dealing with right now. That is the mechanism. You're very familiar with it, for obvious reasons.

Are the governance regimes in place adequate, do you believe? Is the Arctic Council doing enough? Can it do enough, absent the treaty?

DOBRIANSKY: Well, this might surprise all of you because of my first pointing out that there isn't a binding element to it, but in an ironic way, actually, from having attended quite a few Arctic Council meetings during my tenure as undersecretary, I was in Iceland, I was in Finland and I was in Russia.

And for all of these I have to say I thought the value of the Council is the fact, in an ironic way, that it wasn't binding, because actually there were two unique aspects to it.

Countries came, first of all, by free will and because of the importance to which they attach to the issue, number one. Secondly, it's the only body that I'm aware of where you have government officials seated at the table with also representatives of nongovernmental organizations, and there is an active discussion afoot about what are the priorities. In other words, you had various indigenous representatives also at the table, either critiquing what was going on or challenging or putting forward initiatives.

Thirdly, I think there have been some significant initiatives undertaken by the Arctic Council. First was the Climate Change Assessment Report, which was very -- it took a number of years, and which was sponsored by the U.S. government. It was the U.S. government that put monies into that report. Then there was the area that the U.S. government put forth, which was in the health area. I mention this because there are important areas that impact communities, their livelihoods, their futures. So this was another area highlighted.

Thirdly (sic), let me (pick out ?) is naturally, with the melting ice, one of the key areas was what happens to these communities. In the United States, one of the issues, of course, for Alaska is the issue of the North Slope. So our Department of Interior, not the State Department in this case, would come to these gatherings and would be engaged in a number of the discussions relative to the future of communities in the area of the North Slope.

I think it's focused on areas that other areas, you know, weren't -- should I say areas that impacted livelihood, impacted communities in the north, not so much the issues that we're discussing in terms of commerce or in terms of military. It's been more in terms of focusing on with the melting ice, how does this impact our respective countries and our communities. At least when I was participating. Right now Sweden is the new chair, and I'm sure they will modify and update their agendas accordingly.

SESNO: But fundamentally, though, what I'm hearing is you believe the Arctic Council is more than a good start and is focused, and is active. The governance regimes are adequate, do you believe?

DOBRIANSKY: Well, again, in terms of --

SESNO: Absent the Law of the Sea, it's --

DOBRIANSKY: Correct. You took the words out of my mouth, because I was going to say I don't think it can supplant the Law of the Sea. I think the Law of the Sea is the instrument which would have, I think, most significant architectural ramifications here.

SESNO: Scott, you mentioned earlier sustainable development, and this is really interesting, because this is going to be a gigantic international global test, right? And there are some incredible ironies going on here.

So this is the area that's feeling the effects of climate change most dramatically, yet it's also the area that holds nearly a quarter of the -- you know, undiscovered hydrocarbon reserves on the planet that we will use hydrocarbons to get to, extract, and then keep the hydrocarbon regime going so that we can continue on our merry way. Right?

So if more activity means more pollution and more risks could mean more disaster, who cleans it up? Where's the cooperation there? Who's accountable and under what regime?

BORGERSON: Well, let me tell you how I think about sustainable development in the Arctic. Thinking about the Arctic as an emerging market conjures up ideas of other emerging markets in history -- in Latin America or China or Asia -- where sometimes I think development came at the expense of the environment, but not just the environment. It's important for us to recognize -- and I think Paula mentioned -- the people who actually live there. And in particular, the indigenous communities who are --

SESNO: And toxic waste --

(Cross talk).

BORGERSON: -- are active in the Arctic Council but have a lot to contribute and are partners in all of this. So I think, actually, this -- and it's not just oil and gas. There's a lot of other things to do there besides oil and gas. But this presents a really exciting opportunity to redefine how emerging markets are developed.

So you can have -- take more risk but have higher return and do it in a new model where environmental sustainability, so things are cleaned up -- and Shell is working hard to make its case that it can do that on its project off the North Slope -- but whatever the development is. That you can do it with an environmental ethos that's baked into it, that's part of the process and that is in the interests of local communities. And who is it for us in Washington to tell people in Alaska what they can and can't do with their state, in some way? They live there. If they want to develop their state, shouldn't they be right -- free to do that?

SESNO: Well --

DOBRIANSKY: Frank, you mentioned -- you mentioned the issue of waste. I should mention the Arctic Council has had discussions, as I said. I don't know the current -- we have representatives here in the audience who are from the Department, State Department, and could better address these issues, meaning in the last several years, in terms of what's on the table. But the issue of waste and how to deal with waste.

In particular, Russia has been looked at specifically and in terms of waste and the concern by many of the communities that have actually raised this in these Arctic Council discussions.

SESNO: I want to stay on this for just a minute, because we have seen painfully over the last short period of time the risks and the potential spills and fallout from virtually any type of energy that we've got, right? that we access, whether it's the deep waters of the Gulf or what we've -- what we experienced in Japan recently to -- I mean, on and on it goes.

If, God forbid, that were to happen in the Arctic, where is the regime, where is the accountability? How does that get nailed down in this process? Now, you're talking a lot about sustainable development; there also needs, you know, baked into that is sustainable accountability.

BORGERSON: Well, for starters, Deepwater Horizon was in a very different environment --

(Cross talk.)

SESNO: I understand that, but everybody was saying about Deepwater Horizon, can't happen. I went out there, all right? The president, you know, was hugging the thing. Everybody thought that couldn't happen. It does happen. There is risk.

BORGERSON: Do you think there is a chance for arrogance for those in Washington to tell people in Alaska what they can and can't do --

SESNO: Totally there's a chance, and arrogance and complacency and the whole bit. The question is what is the regime in this rapidly changing part of the world? Where is the accountability in this rapidly changing part of the world that we are going to do --

(Cross talk.)

BORGERSON: Well, for Alaska, there's all the normal permitting and regulatory that exists anywhere else. So the Department of Interior, the Coast Guard, it's still a state of the United States of America, subject to all the laws and regulations that exist elsewhere. The federal government as -- plays an active and important role there.

SESNO: We're also talking about in the uncharted territories and the unclaimed areas as well, right?

BORGERSON: Not really. From a maritime perspective, those are beyond 200 nautical miles and the reality is they're not being developed and, I think, likely won't for the foreseeable future, because they're so far out. There's still ice there, still a hazardous environment, and so in my opinion, that's really a nonissue.

SESNO: OK. I want to ask one other area of both of you and then we'll turn to the audience for your questions, please, and that is -- (audio break) -- this country's posture. I know a number of people are concerned, for example, with the icebreakers, the fleet that we've got, or don't have, compared to the others, our preparedness and America's engagement in this area. Where are you both on that?

Paula?

DOBRIANSKY: I'm going to jump first because Scott's written a lot about this and I -- (laughs) --

SESNO: Pre-empt him.

DOBRIANSKY: Pre-emptive -- my pre-emptive jump.

I've just described really what I think before the decision, presidential directive, the recent QDDRs. I think that the U.S. government has highlighted very significantly the importance of this area. But where we come up short I do think is in terms of that being matched by the kinds of resources.

Now, Scott has had a drumbeat about, for example, the icebreakers and just, you know, the number of icebreakers -- one -- that we have in this -- in this case. I think that he has made a very valid argument on this. I think that that's something we should be looking at, not only the issue of the icebreakers -- and I'll let you make that case, because you've written so much on it -- but actually just in terms of the resources that we'd be vesting in this.

It clearly is of strategic importance for all the areas we've identified. We've identified it and codified that in documents, not only the U.S. government, but also collectively. So we should be attaching, I think, more significant resources in areas that are really going to matter to us. And the icebreaker certainly is one of the areas.

SESNO: Scott, what's your scorecard on this?

BORGERSON: We are a reluctant Arctic nation, and we don't put our money where our mouth is. We have a geriatric, atrophying icebreaker fleet. China is building more icebreakers than what the United States has. There is no money appropriated for icebreakers. To my knowledge, there is no money going to be appropriated any time soon -- there's lots of discussion about it. If we do, it'll take a decade to build one. I think the price tag right now is over a billion dollars. There's a law called the Jones Act you're perhaps familiar with which means it's going to be built here where it's more expensive than it could be elsewhere. We're in a -- we're in a spot.

I don't personally think you can outsource sovereignty, which is going to essentially be, I think, the position we're in where we have to lease ships from others, not just the Arctic, but resupply McMurdo, which we've essentially been doing for the last few years. And it's an untenable position for the United States to say it's an Arctic nation, say it wants to provide leadership there, but not invest in assets like icebreakers.

Now, it shouldn't be forgotten that we have a very capable submarine fleet. We have very capable aircraft that can operate there. But icebreakers, it's not a pretty picture. And there's shore infrastructure required as well. Ports, roads, et cetera. If you've been to the North Slope in Alaska or anywhere in the Arctic, it's a -- it's a huge area and there's not much infrastructure, and that requires investment. The Russians seem to be making investment, by the way, and seizing upon that. We are not.

SESNO: Paula, last word and then we'll go to --

DOBRIANSKY: Another interesting aspect, and you mentioned earlier, you asked about China. There are a number of countries that have had a keen interest in the Arctic. China, India, South Korea, Japan, all of these countries in different ways have been keenly interested in what's happening in the Arctic.

I believe we have some Norwegian diplomats here in the -- in the audience. I had the privilege of going to Svalbard, which is the northernmost human settlement in the Arctic. And the reason why I mention it -- which is owned by -- it's part of Norway. The reason why I mention it is because what struck me in going up there is the fact that you do have a number of permanent centers by a number of countries, including China and India, Russia, that are there physically and they're conducting research.

We do our research through NOAA, but we don't -- we, the United States -- doesn't have, per se, you know, a physical center there. There's been a debate on this about, you know, how we will come in and we'll do research. I won't -- I won't engage whether, you know, it's in our interest to have a physical presence or not, but I'm only pointing out the fact that it is of interest to a wide variety of countries to do research , to put monies into it. I just think that we need to prioritize from the U.S. standpoint what -- where we areand where we want to be going, because it is of great strategic importance. We've said it publcly; we're on the record, meaning the U.S. government, last administration, this administration, but we really need to put the resources into it.

SESNO: OK, Scott, I know you want to --

BORGERSON: Just quickly, I don't want the morning to get away without me mentioning ArcticImperative.com. If you don't know it, write that website down and go to it. It's the sort of World Economic Forum Davos for the Arctic. Their first meeting was last year. They're going to do it again this coming summer in Alaska. It's very exciting and -- ArcticImperative.com.

SESNO: Arctic Davos --

BORGERSON: The Arctic Davos.

SESNO: Meet you there. OK.

We're now going to invite the audience to join our discussion with your questions. A couple of requests, if I may. Wait for the microphone to get to you, and when it does, speak into the microphone, not around it, if you would. Would you stand, please, state your name and your affiliation. If you could keep your question brief, we'll have -- ask that the answers be succinct so we can get as much conversation into the -- into the remainder of the session as possible.

I know this gentleman right here. Let's start in the front.

QUESTIONER: Thank you. I'm Edwin Williamson from Sullivan and Cromwell. I want to raise a couple of issues on the Law of the Sea Convention. The -- basically the conservative base is very much against it. Their arguments are essentially that we don't need it, that the navigation rules constitute customary international law, that we have good claims to the Outer Extended Continental Shelf where these resources are. The Law of the Sea Convention in any way recognizes the ability of countries, through bilateral negotiations, to settle boundary disputes independently of the Law of the Sea Convention. And then they argue that if we did that with Canada, we would not then have to pay the royalty to the International Seabed Authority.

The argument basically comes down to why submit to an international regime. The negatives, as they point out, I won't get into whether or not those are valid arguments that they make, but they're out there.

And the argument is basically why should we be doing that to go after extremely high-hanging fruit when we don't even permit the exploitation of low-hanging fruit in the U.S. with offshore and onshore, such as ANWR.

So basically my question is whether or not the proponents of ratification, particularly the environmentalists, would support a ratification that was conditioned on a reform of the U.S. domestic energy policy and essentially lifted all of the, I think, rather nonsensical bans that we have on the exploitation of much-easier- accessible resources?

SESNO: Thank you.

Paula?

DOBRIANSKY: Oh, I was going to point to Scott, because Scott chaired a whole CFR forum, a working group on this.

SESNO: I'll let you both go on that. Whoever wants to go first --

DOBRIANSKY: But I haven't been as close to that piece. Like I said, with the Council, he chaired literally a -- and Tom Pickering, I believe, was part of your effort on this whole issue of the Law of the Sea, and then you also had a lot of individuals who, you know, were representing the environmental community.

I guess I would just say this broadly. You know, you raise a number of issues where there seemingly could be some conflicts. But I'd start with the broad point I made before, moving the legal dimension aside, just on the first part of your question, and then I'll come to the second.

The first part of your question, in terms of the Law of the Sea, I think one of the strongest arguments is that, as I said, we are not at the table. And I know that there were many in the Reagan administration, the Reagan administration was not supporting this. There were many who actually like John Norton more, who as a lawyer, came around and has a very different argument to make.

The second part of your question is meshing up, you know, from the environmental perspective, the positions being taken and how does that mesh up with some of the other exploration issues. All I could say on that is I just think that there needs to be a dialogue. There needs to be literally a recognition that we're going to be confronted with some core energy-related issues, and there isn't one single track. You have to look at -- I'm a proponent of a diversified track, a diversified energy portfolio for the United States. And I think that kind of dialogue is going to have to really take place here.

SESNO: Scott, what -- and Paula, you can jump back into this, but Scott, what about this notion of a tradeoff or an accommodation so that it's a package deal?

BORGERSON: We don't need it. We should just join the treaty. I'd point you to a study I had, with Ambassador Pickering, the pleasure to write, called "The National Interest and Law of the Sea" that the Council published, which lays out in detail all the legal arguments against and the counterarguments for.

And I'd say it's not accurate to say it's a conservatives-are- against-it. I know a lot of conservatives who are for it -- Bush 41, Bush 43. And who are we to tell the chief of Naval Operations and the chairman of the Joint Chiefs of Staff and the leaders of American industry and business, not exactly known to be bleeding-heart environmentalists on the left on these sorts of issues, that they're wrong in supporting this convention? So it's bipartisan. It's wide -- it's the extreme right that don't support this treaty.

SESNO: I'd like -- we need to move it around, so -- I'm sure you engage after the session. Let's move to the -- this woman right here, and then we'll move farther in the back and on the other side.

QUESTIONER: Hi. Sydney Johnson from SNR Denton. Nice to hear all of you today.

I've been to the North Slope 38 times, actually, to mile zero, the pipeline. So most of my career has been in energy. I'd like your thoughts on do you go after the icebreakers first or signing the Law of the Sea treaty first. Because, as the ice pack recedes, you've got a tremendous amount more traffic that's going to be moving through the Arctic. To me, personally, to see what happened in the Gulf, it will completely shut down any possibilities of ANWR or other exploration up there if we have an accident with a Russian ship or whatnot.

But from a statement and a position of what could you get first, Law of the Sea or icebreakers? Which would you all -- what way would you go and what would your strategy be? (Laughter.) I know that's a hard question, but I'm trying to --

BORGERSON: I wouldn't want to take a bet on that, on which happens first. There's no reason why both can't happen in parallel, for starters. Even if Congress were to appropriate the money tomorrow, it's going to take a decade to build these vessels, and I certainly hope the Law of the Sea Convention passes the Senate before then. So we should be doing both.

DOBRIANSKY: My answer was going to be the same, that I really think we should be working towards both and getting it done.

SESNO: All right. And I saw a hand in the back. Did I see a hand in the back? Maybe not? All right, we'll go to this gentleman and then come over to the side of the room.

QUESTIONER: Steve (Raugh ?) at Department of Defense. Scott, I think you wrote that the biggest shift in shipping lanes since the opening of the Suez Canal will happen once we have year-round transit ability through the Arctic Ocean. I think with that big change comes a change in our interests, a change in our priorities.

And with the Pentagon facing huge budget cuts and saying that we're pivoting to Asia, we're not going to cut funding for our security forces in Asia to not allow Chinese dominance in the Taiwan Strait, South China Sea, Indian Ocean, what kind of things do we need to do to then shift and pivot towards the Arctic, if the majority of global shipping from Europe to Northeast Asia and to the West Coast is transiting there now? And what kind of basing capabilities, ships, doctrine, strategy, do we need to have to make that change?

In other words, do we need to make choices now or can we do it all in the future?

BORGERSON: I'll start by saying we should join the Law of the Sea Convention -- (laughter) -- which might be a surprise to everybody in the room. I look at the Bering -- my training, I'm a sailor and a historian by training, and I look at the Bering Straits like the Malacca Straits. Malaysia kicked Singapore out because it was viewed to be nonstrategic and, of course, now it's the largest seaport in the world and I think just passed the billion-tonnage mark in 2011, a new record for the amount of shipping that's gone past there.

And the Arctic is nowhere near sort of that level now, but the metrics are -- shipping is really -- (inaudible) -- taking off there. Shipping in the Arctic is a very complex issue. I won't do it justice in this sort of time, but let me just say quickly I think it's going to happen over the Northern Sea Route or the Northeast Pass, which is over Eurasia, not the Northwest Passage through the Canadian Archipelago, for a number of reasons, one of which is how the ice is melting.

Two, it's not going to be container traffic; it's going to likely be dry and wet bulk. And this past summer, a SUEZ-MAX tanker, the largest tanker ever to transit the Northern Sea Route did, carrying 120,000 tons -- I think it was gas condensate -- from Murmansk to Asia. So it's not a future-sort of science fiction. It's happening now. And there -- it was -- I think it was 8X tonnage this year that went over the Northern Sea Route than the previous U.S., and the Russians are predicting a 20X increase in that in the future. And theRussians are blaming the infrastructure. I think they're -- if they haven't yet, they're coming out with a new essentially policy and regime for transiting through Russian waters, et cetera. So it's happening.

So what can the United States do about it? I think we need a base up there. Kodiak is, I think, about the closest we can get, and that's too far, if you know your Alaskan geography.

So if there was search-and-rescue or an oil spill or a collision or et cetera, to be a responsible stakeholder -- to be a sovereign nation, much less the world's superpower -- we should be able to at least field a team in the Arctic for these increasing shipping lanes.

There are a lot of other stuff sort of tied to that, but -- and which, just saying again, we should join the U.N. Convention on Law of the Sea, because it lays out all the rules as it relates to international shipping, et cetera, and it's the legal foundation under which not just Arctic shipping happens, but shipping around the planet happens.

SESNO: This side of the room I saw some hands. Yes, ma'am?

QUESTIONER: Hi. Sherri Goodman. Thank you, Paula, Scott and Frank. A very good discussion.

So we've talked about the challenges and the need for a greater focus and U.S. presence in the Arctic and we all know -- we know that the U.S. military has made this high priority of the Navy and the Coast Guard. But it's -- in some ways it's all somebody else's problem to fully solve, because the funding for icebreakers isn't there either in the Navy or the Coast Guard budget. The Law of the Sea, Congress hasn't passed.

How do we get a full whole-of-government, comprehensive approach, as we know from what's happened in the Gulf and your discussions about the increased activity up there, the probability of an incident occurring within the next decade or so is reasonable enough that we've already signed search-and-rescue agreements. But it may be a full regime in order to enable us to have the kind of presence to manage the future?

DOBRIANSKY: Well, I guess I would say that with any issue, when it requires change and particularly a reallocation of resources or a restructuring, I think that there's, one, it's -- that's why I cited the fact that you have, you know, a presidential directive. You have QDDRs. But that has to translate itself into action. So what are the ways of doing that?

Well, there are multiple ways of doing that. One, there has to be a very strong advocacy. Maybe I'm stating the obvious in this,but, you know, Scott mentioned that there is beginning -- I don't know how many times they've met; it's the first time I've heard of it, the Davos, you know, if you will, meeting. (Chuckles.) That kind of spotlighting I think really matters.

Secondly, I also have to dare say that in this I think that, you know, even with exploration and the kind of research that's taking place, if they're in the Arctic, if there is a tragedy, it's usually something like that that then also precipitates, you know, more targeted action.

But I think I would go to advocacy. I don't think that this issue has gotten the kind of high-level prominence and spotlight that it should across the board.

SESNO: Where should that come from, Paula? Where should that come from?

DOBRIANSKY: I think that has to come from all sectors. I think that has to come from the executive branch; I think that has to come from our congressional branch. There are a number of very dedicated members of Congress. I know Senator Murkowski; both of us have worked with her in different capacities on these issues. She's really an ardent supporter of bringing about change and identifying the United States as an Arctic nation and what that entails with our own obligations as an Arctic nation.

I think it also comes from the various regional organizations we've mentioned. Everything from the Arctic Council -- NATO, as I said, and going back to defense, I'm very struck by NATO spotlighting this issue. The E.U. is spotlighting this issue. Much more work has to be done in terms of really raising the level of attention on this and how it's not just only a declaration, but actual action. And then, no less, the Law of the Sea, which you've heard both of us say a number of times.

BORGERSON: One word, Sherri: leadership. We're not leading in the Arctic, and the president needs to get out in front on this issue. I think Secretary of State Clinton deserves immense credit for her personal interest in this issue -- attending the Arctic Council, giving speeches on the issue, sort of et cetera, et cetera. Frankly, our president has been absent.

Prime Minister Harper, speech from the throne, Arctic sovereignty is one of the top few issues. (Audio break) -- Putin attended Russia's big Arctic conference this past year, was the keynote speaker. We've got a lot on our plate right now -- debt, wars, you know, Europe.

SESNO: Jobs.

BORGERSON: Jobs. You know, there's no absence of issues in this town, but we need the president to be in front and offer some personal leadership on this issue. SESNO: How much of, you know, it's -- I'm just following up on that question because it's so interesting. You know, how does an -- how does an item -- how does an issue get on an agenda, get the president's attention? How does it get the stakeholders' attention? How does it get the public's attention? Does this issue even need the public's attention?

You know, you've got this incredible coalition of interests, as you pointed out earlier, that should be coalescing around this. And it's all about energy and resources and environmentalism. It's got all the -- all the mix there. I mean, it's really a -- it's really a curious thing as to why this hasn't broken out.

BORGERSON: Well, as everyone -- that question's only appropriate in this town. Because in other Arctic capitals, it has everybody's attention. Where is --

(Cross talk.)

BORGERSON: -- deal??

SESNO: Yeah, but, see, I don't think the United States of America and this town, if you've been here in July, doesn't think of itself as an Arctic capital. (Laughter.)

BORGERSON: Exactly. Exactly.

SESNO: I mean, I think that's part of the problem.

BORGERSON: People in Oslo, Moscow, Reykjavik, they are -- they are aware of what's happening.

SESNO: Do you think that, you know, the great political debate in this country over whether climate change is happening, you know, all -- does this get in the way with this sort of thing? I mean, because it seems to me that some of the conversations we're having here are mystifying to other countries.

I was talking with, you know, somebody from German industry the other day who's just -- was transferred to this country. He said, you're having these debates about whether these things are happening and -- we don't even bother with these debates. We go right to the -- I mean, how much of that is the problem here?

DOBRIANSKY: Well -- forgive me, I'm going to go back. I still have a footnote on your last question, because you asked the question about how does this issue get to the forefront? I mean all right, during my tenure in government we had an interagency process, and in that interagency process there was a review of the statement that was made in 1994 and, in fact, there was an executive decision that was, look, this is a priority. Let's elevate it.

So you had a 1994 statement advanced to the world, you know, today, meaning at that time, just a couple years back, and culminatingin a presidential decision directive. OK, so to me, the next step is what's the implementation? That's the next phase.

Yes, we have a new administration, but every administration reviews its security decision directives, its presidential directives. It updates it and then it looks at, OK, what are the next steps? In this case, there was real solidarity. So now -- I'm only speaking of the governmental side, but my answer to you on that one is it has to be implemented. And that is the next phase.

SESNO: My question, I guess, just is with the issue of leadership, which both of you say is required here. How much of that is driven or distracted by the static political debate and sort of the anti-science that takes place in much of the public discourse then?

DOBRIANSKY: I don't --

SESNO: You don't think so?

DOBRIANSKY: I have to say that isn't what I see as the issue. It's more what Scott mentioned earlier. Quite candidly, there are competing, very significant issues, like the economy. And I think that that's what is more impacting this.

SESNO: Go back out to other questions. I saw some other hands up on this side of the room a few minutes ago.

DOBRIANSKY: It would be -- may I -- it would be interesting. I know we have individuals here from the different embassies.

SESNO: The Arctic countries, right.

DOBRIANSKY: Yeah. And it'd be interesting to hear some of their thoughts on this issue. I think Canada, Norway. I don't know if Russia's here. You know, there are a number. (Pause.) If they so desire.

SESNO: If they so desire. (Laughter.) Anybody? Question in the back, yes. Are you from one of the Arctic nations? Do you want to contribute on that level, or do you have question of your own?

QUESTIONER: My name is -- (inaudible) -- Vietnamese-Americans. I'm not from any embassy. I just wanted to put in one of my experience of a few months ago. I visit in a conference hosted by -- and Senator Murkowski did talk in length and with a lot of high focus in the Arctic. And a focus in energy and oil. So I think there has been attention, and we are working toward a policy and it's mainly with the Law of the Sea and oil and energy.

And I believe that our president also has attention to energy. Right now, with the focus on jobs and the economy, it's difficult to mention the Arctic and with all the other problems. But I believe there is attention being focused for quite a while now on the Arctic and the development of policy there.

And I also have sit in other conferences regarding energy, development of our -- (inaudible) --nation, of the U.S. between now and the year 2050. So within that focus, I think the Arctic is part of it, is a large part of it.

SESNO: Thank you.

DOBRIANSKY: By the way, Senator Murkowski has put forth legislation, and I know she was at one of your working groups that's sponsored by the Council and in which she had an opportunity to discuss some of the kinds of legislation that's being put forward. But, you know, it hasn't gone anywhere, and I think for the reasons that a number of us, including yourself has just stated. You know, the -- very much the focus on the economy.

Although I would also add that this has an interconnection with economic concerns, certainly, in terms of the livelihood of those up in the region and also opportunities that will flow from what is happening in the Arctic.

BORGERSON: Quick follow-up point. I think Senator Begich deserves some credit. He's also been an articulate advocate on this issue. The Alaska state leadership, bipartisan across the board, appreciate the significance of this. And us in the Lower 48, I think, sometimes forget about this scale in Alaska. If Texas seems big, Alaska's two and a half times the size of Texas. If you go from Adak?? At the end of the Aleutian chain to Barrow, it's like going from Maine to Key West.

We bought Alaska for $7 million. This has an opportunity to be the greatest investment in world history. (Laughter.) Prudhoe Bay made Alaska rich, but it's basically been a petro state. And by the way, you look at other states' finances, they're in tough shape. Alaska, I think it's about 50 (billion dollars) to 60 billion dollars of reserves, between the permanent fund and budget surplus, et cetera. And they haven't even begun to tap how rich that state is.

It needs to be done responsibly, sustainably, in the interests of people who live there. But when we're an economy looking to create jobs and get this country going again, Alaska has a really exciting opportunity to lead our country in this moment in our history.

SESNO: And to really be a metaphor for 21st century development --

BORGERSON: Absolutely.

SESNO: Yes, in the back.

QUESTIONER: Toby Ganier??, hingham. Listening to the discussion on Law of the Sea, I would have one practical suggestion. Perhaps we could get a question on this into the Republican debate on foreign policy. Many of us might not like the answer, but it probably would spur a response and maybe even some leadership on the top level about this.

BORGERSON: Careful what you ask for. You don't want it in the primary; you want it in the general election. (Laughter.) Senator McCain, a former Naval officer, a long-time supporter of the Convention, ran away from it in a primary because primary politics are different that the general election, frankly.

So be careful what you ask for. I think it'd be dangerous, particularly given these debates. (Laughter.) Who knows how that would turn out?

SESNO: Could we do "9-9-9" in the -- (laughter)?

BORGERSON: Right. I would love to see -- whoever the Republican nominee is and President Obama, they have a lot of things to disagree on in this election cycle. One thing I think they could absolutely agree on is this treaty.

SESNO: Well, Paula, you know this, both sides of the equation very well. What do you think the prospects of that, from the - -from this presidential cycle? Are we likely to see a Newt Gingrich or a Mitt Romney embrace the Law of the Sea and some of these other questions in the same way that you'd be likely to see a Barack Obama in another term? What are the political prospects?

DOBRIANSKY: I wouldn't rule out any possibility here in that. I think that naturally they're looking at all the ramifications. And as I just said, I think one of the links, Toby??, is actually this issue of the economy, because the interesting aspect about it is relevant to the Arctic, is that there is -- there are economic opportunities.

So I'll just say I wouldn't rule that out in terms of there really being on both sides, Democrats and of course the Republicans --

SESNO: They're a very large part of the Republican Party, and it's not just the Republicans, by the way, who are concerned about our sovereignty or concerned about these multilateral deals, as the gentleman's question suggested, who are going to say, now, wait a minute. You know, we really don't need this. We've got our shelves --

DOBRIANSKY: But I'd also add, and going back to the history in the original question about this, I thought back during the Reagan administration. The Reagan administration had taken a position not in favor, but you had many Republicans, as there was a very, you know, full-fledged investigation and vetting, if you will, you had many alike. And I think of immediately John Norton Moore, who was one of the opponents and now he's a strong proponent. So --

BORGERSON: It's a mistake to say this is a Democrat-verse- Republican issue, and I don't want us to fall in that trap. It's not.

SESNO: OK. I want to -- we've got one minute left. I want to ask --

DOBRIANSKY: I agree with that, by the way. I think that's an unfair characterization.

SESNO: OK. I want to ask -- so let me ask both of you, let me ask both of you to in about 30 seconds each to give us a scorecard. If you're looking forward, not just through this election cycle, but over the next one, two, three years of the kinds of things that you think we should be seeing if we're going to make progress toward the Arctic nation status and role that you think -- you think we need to occupy.

BORGERSON: My first answer might surprise you. Join the Law of the Sea Convention. (Laughter.) Build icebreakers. Reorient our mental maps to appreciate the Arctic and its importance on the planet, which we forget sometimes when you stare at a Mercator projection for too long. Invest there. Put your pension funds and your 401(k)s in the Arctic, because you'll like the returns. (Laughter.)

General awareness, but putting our money where our mouth is includes investing in infrastructure. But the easy one, the low- hanging fruit is the Law of the Sea Convention. We should join that thing.

DOBRIANSKY: I agree with that -- that list. The only thing I'd add is to take it down one more level is at the community level in looking at what the changes are. That's certainly done, of course, in the state of Alaska naturally, but I know that there's an interest even more broadly because of what they do and vis-a-vis other indigenous. So I would just add that into the mix as well.

SESNO: Paula Dobriansky and Scott Borgerson, thanks both very much. (Applause.)

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