Next generation of U.S. Arctic infrastructure investment awaiting action from President Trump

Alaska’s Arctic region needs increased infrastructural development, especially as the Arctic’s thinning sea ice creates new shipping routes and increased summer navigability – providing new economic opportunities and furthering U.S. strategic imperatives. 

To take full advantage of these opportunities, the U.S. needs to increase its maritime capabilities by adding, expanding, and increasing the depth of port, harbor, and docking facilities; and growing the Arctic icebreaker fleet to improve search and rescue capacities and incident response efforts of the U.S. Coast Guard.

{mosads}It is also critical to the United States’ national security and geopolitical interests, that we further develop the region and invest in a fleet of modern icebreakers to keep pace with Russia, which has taken a commanding position in the Arctic by investing billions of dollars on infrastructure, including a large fleet of at least forty icebreakers.  The U.S. fleet currently consists of two. 

There are several specific economic and strategic projects and programs which represent an estimated $6.3 billion in inward investment and could serve as a cornerstone to future Arctic infrastructure development: 

• $210.8 million for deep-draft expansion project at the Port of Nome to provide local and regional economic development opportunities;
• $20-100 million public-private partnership to transform Port Clarence into a maritime support base;
• $70 million expansion of the dock at Cape Blossom to capitalize on a new access road to reduce shipping costs and facilitate community expansion;
• Expanding Arctic search, rescue and emergency response capabilities and navigation by investing in six new icebreakers which cost roughly $1 billion each.

But the investments necessary to deliver these projects will likely remain sidelined until private sector investors have the confidence to make each project financially viable.

The Obama administration’s decisions to remove the Arctic from the 2017-2022 Outer Continental Shelf (OCS) leasing program and ban energy development in 115 miles of the resource rich Beaufort and Chukchi seas, is creating a chilling effect on capital investment, significantly threatening the viability of these critical infrastructure projects.

Increased tourism, commercial cargo shipping, and, importantly, offshore oil and gas exploration could potentially create the economic conditions that would spur necessary capital investments to develop these projects.

Offshore oil and gas development not only represents the most sizeable vehicle to drive the immediate development of new infrastructure, but has historically, been a key driver to the Alaskan economy. 

Absent any prospect of oil and gas activity until at least 2023 and potentially after, government will no longer be able to employ its most effective lever for stimulating additional private sector investment into the region.  A decision by the Trump administration of whether to overturn the current ban therefore takes on out-sized importance.

Should the Trump administration or Congress prioritize this issue we could see new Arctic leases introduced as early as 2019, serving to kick-start the development of an array of new infrastructure projects.

But if President Trump fails to review the Obama administration’s OCS lease decision, there will be a chilling effect on the deployment of future capital for infrastructure development throughout Alaska.

Reversal of President Obama’s decision is likely to be the single biggest issue in determining whether, and how extensively the next generation of infrastructure in the U.S. Arctic can be realized.

While new infrastructure developments, from roads, bridges, icebreakers, deep-water ports and transshipment centers to high-speed broadband internet in Alaska’s Arctic regions will significantly improve the safety, health, and economic well-being of its native population, they are also critical to the United States’ national security and geopolitical interests.

As our ice breaker fleet has dwindled to just two operational ships in the Arctic, Russia with their sizeable investment in growing their own fleet has contributed to our dwindling strategic significance in the region.

Supportive government policies, including access to OCS resources can sustain private sector investment to develop the region, and the United States can reclaim its footing and become the dominant power in the region, while also significantly improving the quality of life for Alaska’s Native people by driving down the costs of delivered goods, and adds significant revenues to state coffers.

The debate is raging over the permanence of the Obama administration’s decision, but Alaskans and other proponents of Arctic development argue that there is no precedent to suggest a ban can be permanent. While replacing the existing OCS leasing program is an arduous task, prospects of offshore oil and gas development will serve as the catalyst for the creation of new Arctic infrastructure in the near term.

Should the Trump administration or Congress, choose to prioritize reversing the Obama administration’s decisions, the next generation of infrastructure in the U.S. Arctic can be realized.

Matt Missentzis is a spokesperson for the Alliance for Innovation and Infrastructure.

The views expressed by this author are their own and are not the views of The Hill.