 Thank you so much. We're now going to turn to a discussion, very much in keeping with Senator Murkowski's conversation about the need for economic growth and the importance of energy and resource development. And we are going to turn to a panel that I will tell you a secret. All four of us on this panel have one thing in common, probably a lot more than that, but I at least know one thing we have in common. And that is we all participated in the National Petroleum Council's Arctic Research Study. I was just a supporting cast member on the subcommittee work, Drew also as well, but our co-captains on this subcommittee were none other than Carol Lloyd from ExxonMobil and Polygrant from the Department of Energy. So what I'm going to do is I'm going to briefly introduce our wonderful power panel and to talk a little bit about the study, which was released on March 27th. I know Carol and other colleagues have done some outreach about the study. So you may know a little bit about it. You may have never heard about it, but we wanted to share with you this study. But more importantly, talk about a broader array of Arctic energy related issues and maybe going a little bit beyond the study. And we're so grateful to have Drew Pierce here who is very engaged with the newly formed Arctic Economic Council. And she's promised to give some new insights into that. But before I begin, let me introduce this wonderful and distinguished panel. Immediately to my left, Dr. Polygrant is the Deputy Assistant Secretary for Oil and Natural Gas in the Department of Energy's Office of Fossil Energy, where she administers both domestic and international oil and gas programs. She previously worked at the American Gas Association and Duke Energy. And also she has a very impressive academic background. To the far left, we have Ms. Carol Lloyd, who's the engineering vice president at ExxonMobil's upstream research company. She's also a long distinguished career, both with engineering manager at ExxonMobil, but also engineering manager at Imperial Oil. And she is the smartest person on technology I have ever met. So if you have some real technical, write to her, write to her. And finally, to my right, we have Ms. Drew Pierce, Senior Policy Advisor at Cromwell and Moorings Environment and Natural Resources and Government Affairs Group. Drew is an Alaskan and she has been a senior advisor to two former secretaries of the Interior on a range of issues, specifically with Alaskan Affairs. She also was appointed by President George W. Bush as the first federal coordinator in the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects. That's a title. That's a mouthful. But Drew is a legislator. She served for 17 years in the Alaskan State Legislature, and she's going to help us give a very powerful perspective from the state of Alaska. So we have some great slides. Each of the panelists have a short presentation. We're going to begin with Paula from the Department of Energy's perspective. Turn to Carol for the industry perspective. Drew's going to do cleanup, and then we're going to ask some questions and welcome you into it. So with that, again, thank you. Welcome Paula. The floor is yours. Thanks Heather. It's a pleasure to be here today, and thanks everyone for coming in from this beautiful spring day. I'm very pleased to see that spring has finally arrived here in D.C. I think it was actually warmer in Alaska when we were in Juneau last week than it was here in D.C. So it's a funny world. But we're really thrilled to have the opportunity to talk about the Arctic and Alaska and our oil and gas resources here today. It's a very important moment in our history as we think about the Arctic. I want to share a little bit of the administration's perspective and sort of where our head is right now on the Arctic. I think many of you know, because you're in the room here focused on the Arctic, that the president has set a national imperative for the U.S. to take a leadership role in ensuring stewardship of the Arctic as set out in the national strategy for the Arctic a couple of years ago in the following implementation plan. Our leadership and our presence in the region will be vital over the coming decade to ensuring continued U.S. leadership and in setting standards of behavior, norms of behavior and activity in the region. As the climate changes and sea ice begins to be less prevalent in some areas and move around more in other areas, we're seeing an increased amount of activity in the Arctic, either from a commercial perspective, a significant increase in shipping activity or from a military perspective with demonstrations of activity on other parts as well as an increased presence of other countries looking at commercial opportunities even if they aren't Arctic nations in the region. So there's a tremendous opportunity for the United States to lead as this activity increases and it's within this context that the Secretary of Energy asked in October of 2013 that the National Petroleum Council conduct a study looking at what is the nature of the oil and gas resource in the Arctic and what are the technologies and practices available and are needed to ensure that those resources are developed in a prudent manner. And prudent encompasses and as Carol will talk through when she talks through the results of the research work, prudent encompasses the idea that these resources are valuable and that developing them has both national and energy security benefits. But also these resources must be developed in a manner that minimizes the negative impacts on other natural resources like our air and our land and our water as well as taking into account the benefits that can be accrued to local communities and the knowledge that local communities can contribute to the resource development. So that is the question or the request that the Secretary made of the National Petroleum Council. Carol, in a bit, is going to walk you through how the NPC responded to that request. But I want to talk just for a couple of minutes and Heather has admonished me to be brief. But there's so much to talk about in this area that the Secretary was very pleased to receive the results of the study as Heather mentioned at the end of March. And it's very timely as many of you know, the U.S. will assume the chairmanship of the Arctic Council in the next couple of weeks actually. And we have an opportunity to work through our leadership of that council to ensure not only leadership in stewardship of the Arctic environment, but also to find ways to enhance international cooperation. And through the Arctic Council, we have demonstrated an ability to cooperate internationally on science and technology. And that really forms the core of the Secretary's request. It's a question about what the science and technology is needed to ensure the prudent development of oil and gas resources. And in particular, what could the Department of Energy do to further advance science and technology? One of the key aspects of the recommendations that you'll hear about today is a recognition that in order to develop, to realize the promise presented by our oil and gas resources in Alaska and the Alaskan Arctic, that it will be absolutely vital to secure the public confidence that those resources can be developed in a responsible manner. And in order to ensure that public confidence, we are going to have to make sure that we are conducting science and demonstrating technologies in transparent manners. So that means in some sort of public manner, whether it's through the work of our national labs, we have a network of national labs across the country that are part of the Department of Energy, whether it's through public-private partnerships, many of which are referenced and surveyed in the study, are through academic work. But in order for policymakers to be able to rely on science and technology demonstration in policymaking, that work is going to have to be done in a transparent manner that the public can have confidence in. And I think that you'll see quite a few of the recommendations in the study have that in mind. And we very much look forward to identifying ways the Department of Energy can be part of that continued research in that demonstration. Many will ask why the Arctic, why now, outside of this leadership imperative, when we have such a tremendous abundance of domestic oil and gas in the lower 48, and the simple answer to that question is that we should be making decisions at a policy level that have our children in mind. And the office that I have the pleasure and the privilege of managing right now, the initial work was done in the Marcellus in 1978 on horizontal drilling and hydraulic fracturing. And over the next decade, the office spent about $130 million, much of it in partnership with George Mitchell, who then took it on and as many of you know, perfected it and demonstrated in the Barnett in North Texas. And that knowledge has been applied to a very prolific resource that is found in many parts of this country, both natural gas and oil, and has generated an incredible abundance of domestic supply. The reason that we need to be thinking about the Arctic now is because it will take us a good decade of exploration, improving up this resource to get into the place where we are at a significant level of commercial production. So if you think about the work we did in 1978 to provide for the domestic supplies that we have now, that's where we need to be in the Arctic right now. This is about our children and securing their energy security. So that's the why now, why the Arctic. And I encourage you all to take a look at the report that Carol's going to share here in a bit. I think it's a very valuable contribution to our understanding of the oil and gas resource as well as the environment in which it will be developed and how we ensure it's done in a prudent manner. So thank you for being here today. Thanks, Heather. Paula, thanks. Thank you so much. I don't mean to be such an ogre in far as time, but I always feel like short presentations and then lots of questions are always the best. So Carol, over to you help walk us through some of the highlights of the petroleum council's work. Well, good morning. And thank you so very much for the invitation to be here to talk about the Arctic and to talk about the National Petroleum Council study. I would offer for you three key takeaways that that I'm going to focus on in the next five to seven minutes, and then I'd be pleased to take your questions. The first takeaway is the very collaborative process that was undertaken in this study. Paula mentioned it briefly. It may be tempting because of the name of the organization under which this study was done to dismiss it as an industry position piece, an industry advocacy document. It is not that, and I hope to demonstrate that to you directly in the next few moments. The second key takeaway is that the U.S. Arctic potential is significant. Material in the future, as Paula so ably articulated to you in her comments about our children, and the technology to access to explore for and develop that U.S. offshore Arctic potential exists today based on technology that's been developed and proven in other jurisdictions. And then finally, the key takeaway is what happens next. And I'll close with some of the more important recommendations in the report from a technical perspective. I'm happy to wear the cloak that Heather has given me of the technical guru on the panel. So I'll focus on those and then leave Drew Pierce to talk about some of the other aspects, which we discussed at great length with regard to the Arctic Council and our thoughts on the most appropriate actions to undertake as the U.S. transfers or assumes the chairmanship of the Arctic Council. So with that, I'll just make a couple of comments with regard to the team that we assembled and the collaborative process. In the in the slide, you can see we had 266 participants from over 105 organizations. 43% of those were from the oil and gas industry. 30% from government, including the federal government here in Washington and also the state of Alaska government representatives. 12% from academic institutions, not surprising given the Secretary's focus on research and technology. We saw the need to reach out to those institutions that were directly involved in research in the Arctic in ice and logistics and all of these topics, which are relevant to our report. The remainder remaining 15% roughly split between Alaska native representation, consultants, think tanks and the environmental community. We met, we received the Secretary's request, a study committee was formed. We developed a work plan that looks kind of like the one shown on the right hand side and tested that with the Secretary of Energy before we undertook our work. The report itself is split into three parts. The first part is prudent development, and that includes a global perspective, global resource potential, including the US onshore offshore with a focus on conventional oil and gas. It also includes some some interesting interesting facts with regard to the oil industry's long history of experience in Arctic and Arctic like conditions. It also includes policy, a description of Arctic policy history in the US, and it compares and contrasts US Arctic policy with other nations. We describe at a high level what exploration and development in the Arctic might take and what some of the challenges and opportunities might be other than technology. That's part one. Part two and three are the majority of the report. It's a 550 plus page report, and those are the research and technology sections. There's an engineering section that includes four chapters that covered ice exploration and development technology, logistics and infrastructure, and the very important topic of oil spill response. Then the environmental section includes ecology and the human environment. These two teams assess the current state of technology, the current state of ongoing research, assessed gaps and then selected opportunities for the current administration and the Department of Energy to pursue. Those opportunities were prioritized and the most important ones highlighted in the executive summary for consideration. A very, very collaborative report, a broad and deep team that came together to have conversations first, do analysis and then come to conclusions. We worked for more than a year. We did not start putting pen to paper on recommendations until the last two months of the study. The next topic is that I said I wanted you to take away is that the US Arctic potential is significant and the technology exists to explore for and develop it safely today. I'm going to develop that a little further in the next five minutes or so. There are seven key findings in the report in the executive summary. You can see them listed and summarized on this page. The order is important. This is first and foremost a technical report and the order follows a logical technical order. In finding one, we describe the size of the Arctic oil and gas resource potential. I'm going to tell you just a little bit more about that in a subsequent slide. In finding two, we explored the Arctic ecological, physical and human environment, which we found was well understood after decades of research from many different institutions and organizations. In finding three, we explored the oil and gas industry's long history of successful operations in the Arctic, which has been enabled by continuing technology advances, more than a century of experience that starts with the very cold water development in Norman Wells in Canada and then moves forward to the Cook Inlet in the US exploration programs in the US and Canadian Beaufort Seas in the 70s and 80s and then moves into the development rain beginning in roughly the mid-1990s through to the present day. In finding four, perhaps the most important in the study or one of the most important, most of the US Arctic conventional oil and gas potential can be developed using existing field proven technology. Of course, we recognize that technical know-how is not enough. In order to move forward, the development must also be economically viable as we discuss in finding five, and we must also have public confidence that the opportunity can be pursued in a prudent manner as Paula described earlier and as we describe in the report in finding six. We recognize that we are not there today in the US with a public confidence, and we note in the report the shared responsibility between the oil and gas industry and the government in securing and maintaining this public confidence. And then finally in finding seven, we outline the substantial recent technology improvements in the area of oil spill prevention and oil spill response in ICE. Those technology improvements have not yet been fully accepted in the US, which opens up the opportunity for collaborative research in the public forum, as Paula discussed, and we see those in the recommendations, which I'll show to you shortly. Briefly on resource potential, we use the US geological surveys assessment, and in the pie chart on the left you see their mean assessment. The total potential, total global endowment in the Arctic is 923 billion barrels of oil potential. Beginning at the 12 o'clock position and moving our way around to the 4 o'clock position, you see roughly one third is in produced and reserves entirely in US and Russia. The 4 o'clock position starts the discovered but not yet developed. There's no development plans on the books for those resources, about 100 billion barrels, and then the majority look at that 51 percent or 426 billion barrels of undiscovered potential in the global Arctic. The global Arctic, in fact, is the contains the world's largest accumulation of undiscovered conventional oil and gas hydrocarbons. So splitting that potential, that global potential by country is shown on the right. You can see by inspection that Russia is by far the largest holder of that global potential, but look who's second. It's none other than the US. Focusing on oil potential, we see that the oil potential in Russia and the US is roughly equivalent and that the US has more oil potential than either Canada or Greenland or other than Norway. So this illustrates the significant resource potential in the global Arctic and then in the US. We discuss in the report the question of why to pursue the Arctic now, and I think Paula ably covered that point. And then in the third bullet on the slide, we talk about the national security and economic benefits associated with oil and gas development in the North. And for those of you that were here this morning to hear Senator Murkowski's remarks on the economic benefit of oil and gas development to local Alaskans, I don't think I could say it any better than she did. But for those of you that like numbers, there's quite a lot of discussion in the report about the potential economic implications of an offshore development. I'd encourage you to take a look at that. This particular display is illustrates the variability in Arctic ice conditions around the world. There is not one Arctic. In the first two columns in this table, we describe the Arctic environment. By environment, we mean length of open water season, ice type, and water depth. In the first column, you have a word description. In a second column, we have the examples around the world where that environment is found. The third column is the technology implications on oil and gas development. You can think of these as technology tiers, tier one being the first row and roughly the easiest, although easiest is a relative term in an area as remote as the Arctic, and tier five being the most difficult from a technology perspective. You'll note immediately that there are pictures in tiers one, two, and three, and no pictures in tier four and five. That's because tiers four and five have not yet been proven, not yet, I always say, I'm in the research business and that's what we're working on now. The other item I'd point out to you is the red text illustrates where the U.S. potential is located. The majority of the U.S. potential, 90 percent of the undiscovered potential, is assessed to be in the Beaufort and Chuck G.C.'s in less than 100 meters of water depth. You can see the photos in tier three, there's exploration technology, which was demonstrated in the 70s in the Beaufort and Canadian and U.S. Beaufort seas, and then the development concept was demonstrated in offshore Socklin Island in the 2000s, in the 90s and 2000s. Finally, with regard to well-controlled technology improvements, there's been significant improvement post the Macondo tragedy by the industry and also by the regulators. This particular display we call the bow tie for obvious reasons. At the center of the bow is a loss of containment event, and on the left-hand side are all of the prevention technologies available to eliminate or reduce the risk of a well-containment event occurring in the first place. And usually these topics, oil spill prevention and oil spill response are separated, and the prevention side is the engineering domain, and the response side tends to be an environmental domain. In our report, we brought those together because it's the industry's objective, it's the objective of all stakeholders to prevent these terrible incidents from taking place in the first place. I'll direct your attention to the picture of the capping stack and seabed emergency shut-in device. These are the new technologies that I mentioned have been recently developed, and we see the need for additional collaborative research to validate these technologies, which the industry views as proven and adopt them for full use in the U.S. Finally, with regard to what comes next, I've highlighted as promised on this chart the key recommendations coming out of the report, the key technical recommendations. We have grouped the recommendations into three themes, environmental stewardship, economic viability, and government leadership and policy coordination. These themes are the three pillars, if you will, of what's necessary to move forward with the development. The first two listed are in the environmental stewardship theme. The first is that industry and regulators should work together to analyze these new technologies for well control. The second speaks to oil spill response in ice, and there is an industry collaborative research project that has been underway since 2012 that has been evaluating response technologies developed in temperate climates to see how they will perform in the Arctic, and we recommend that government agencies join that collaborative. There are eight international companies participating. In the area of economic viability, we make two recommendations. The first is around extending the drilling season. The picture at the left illustrates the challenge. Currently, the drilling season, exploration drilling season, is conducted in the winter or in the summer, excuse me, when the water is open and ice free. That's about 110 days. However, the current practice is to restrict the back end of that season from exploration drilling to reserve it for a same season relief well. That reduces the season to about 79 days. In order to drill an exploration well to target, you need about 80 days to progress it if you have a dry hole. If you have a test to do, you need more time. So what this current practice is doing is requiring two mobilizations for every single exploration well. What's possible with validating some of these technologies that I'm talking about that have been used and demonstrated in other jurisdictions, and in the 70s and 80s in the U.S., is to roughly double that season so it would make it possible to drill an exploration well in a single season with a single mobilization, taking the cost of exploration drilling almost in half, and significantly reducing the risk. The second economic issue is lease terms. You can see in the picture that the U.S. is different than other nations in terms of its lease construct being a development-based system, which requires more drilling in the primary lease term to secure lease for development. Other nations have recognized this challenge. It's very difficult to progress the number of exploration wells noted when you can only work two to three months out of the season during the summer months. And they recognize this and they break the lease into a couple of bites. The first bite is an exploration lease where, for example, in Canada, if you have a discovery, you go into a process of converting that license to a significant discovery license, and then you're allowed more time with which to advance your development. So these are the key technical recommendations in the report, and I'd be pleased and look forward to your questions. Thank you very much, Heather. Thank you, Carol. That was just super. And again, we have copies of the report. I just, a really tremendous amount of information is in there, so I encourage you to take it home and read it. And so may I turn to- You may, but just to pass me the- Oh, you have to- The keyboard, ma'am. Please. Thank you. Our fancy technology here is passing down the row. All right, Ms. Pierce, the floor is yours. Just have to figure it out. Great. Thank you very much. Thank you to CSIS. Thank you to all of you for being here today. I'm going to talk about three things very briefly. The NPC Arctic Research Study and an Alaskan's Perspective, which I bring to the table. Paula made the comment that it's important that any movements forward in the Arctic have the public's confidence. But what we Alaskans brought to the table was the fact that for this study, for it to have any credence in Alaska, it had to have Alaskans confidence. And so lots of Alaskans got to take part. And I was very pleased with the outcome. I'm going to talk briefly about one of the recommendations related to the Arctic Council and the U.S. chairmanship. And I'm going to talk about the Arctic Economic Council, which you heard the senator speak about earlier. So the senator told you to remember those four million people who live in the Arctic. I was honored to serve on the coordinating subcommittee, not only with Heather and many people here in the room, but also with dozens of Alaskans who worked on the coordinating subcommittee, but also on the different chapter teams. They brought their passion to the table. Henry Huntington of Pew, a doctor, and then Commissioner Mark Myers and his staff now at Alaska DNR. Many, many scientists at the University of Alaska, particularly in Fairbanks, but also throughout the state. And we had a workshop in Fairbanks where we brought in native leaders. We had tribal leaders. We had local government leaders. We had native corporation A and C leaders. We had elders. We had whalers. We had subsistence users. And the person who made sure that we kept on the right track and remembered those people who live in the Arctic each time we met was my friend Richard Glenn. And just to give you an idea of all the different hats that the people, those four million people who live in the Arctic wear, not everyone wears all these hats, but Richard is the executive vice president for lands and minerals for Arctic Slope Regional Corporation, one of the largest of the A and Cs. He is a geologist. He's a scientist. He's a father. He's a whaling crew co-captain. He's an Eskimo dancer. And he's a rock and roll keyboardist. He was also a member of the NPC Arctic Research Study Coordinating Subcommittee. And he spoke to us a lot, but he talked a lot about balance. And so I put a quote here, and I am going to read it to you. He said, the study, just like Inupiat life, was all about balance. Balance between conservation and resource development. Balance between traditional knowledge and what we call Western science and engineering. The Arctic is our home. We aren't going anywhere. He talked to us many times as did some of the elders about the fact that Inupiat and the Yupik and the Hollywood have been adapting to changing climates, to changing migratory patterns, into the infusion of new culture and technology for thousands of years. They haven't left, and they're not going to leave. Another quote, if development comes, we want to share in the benefits while working to mitigate any negative impacts. Do we get passionate about it? You bet we do. And all the Alaskans who were at the table, whether working on one of the chapters or at the workshop or at the Coordinating Subcommittee, brought their passion to the table. We brought it back home to Alaska time and time again, and we insisted upon a focus on traditional knowledge. We insisted upon a focus on the benefits for Alaska, and I have to say that the ladies to my left were extremely patient with all of the Alaskans. So there is a recommendation in the Executive Summary and in this study. The Secretary asked in his letter about DOE's role during the Arctic Council chairmanship, and so in the government leadership and policy coordination recommendations, there is a recommendation, and this is it. The U.S. government should seek to strengthen the Arctic Economic Council's formal interaction and engagement with the Arctic Council, as well as to promote its business advisory role. You heard the senator speak about the Arctic Economic Council this morning, but a lot of people still aren't that familiar. So here's a primer. It was created at the direction of the ministers in the ministerial declaration during the Canadian chairmanship, and under the leadership of minister Leona Aglakuk, the Canadian chair of the Arctic Council, she represents the first time that a permanent participant, an Inuit, has been chair. Their inaugural meeting was in September of last year in that place we just all don't quite know how to pronounce, but they have a lot of meetings, Ikelut, Nunavut, Canada. The purpose is to facilitate Arctic business to business activities and responsible economic development. There are 42 voting members. That means there are three from each member nation and three from each of the Arctic Council permanent participant Indigenous organizations of which there are six. There's a four-member executive committee and that will always include at least one permanent participant. This is the first time in an international body like this that was developed certainly under the Arctic Council that the permanent participants are fully at the table with a vote. Alaska is lucky in the United States, but particularly Alaska is lucky because we have three business representatives who are from Alaska representing all Alaskans, but we also have permanent participant representatives. One from the ICC, that's the Inuit, two from the Alliutes, one from the Athabaskan International, and one from the Gwichin International. So the US, Alaska, has eight of the 42 voting members and that's the largest single delegation. On Tuesday of this week the State Department held a virtual stakeholder outreach forum and Julie Gorley presented to many, many people, many Alaskans in particular a new slideshow about the road to a Caliuit and what the agenda is and asked for questions and certainly the State Department wants the input, but I just want to note that under economic development the first bullet is harnessing the expertise and resources of the Arctic Economic Council to inform the council's work to improve economic and living conditions in the region. Now I actually have some insider knowledge. I have reason to believe that when the group gets to Ottawa next Thursday where they're having their second face-to-face meeting that they will choose to adopt a rotating chairmanship just like the Arctic Council has. I also have reason to believe that the U.S. will be the second chair after Canada, the chairs at the moment of this new Arctic Economic Council and I also have reason to believe that Tara Sweeney who is the business rep for the Indian Circumpolar Conference Alaska will be who sits on the Executive Committee presently will be the chair during the U.S. chairmanship and the Alaskans have met monthly. They talk about what they hope that they can bring forward to the larger Arctic Economic Council, but they're bringing a number of proposed themes to the table next week and I suspect because these fit so closely into the terms of reference for the Arctic Economic Council itself that these will be adopted. So the overarching themes for the next two years, encouraging public private partnerships, creating stable and predictable regulatory frameworks, facilitating knowledge and data exchange between industry and academia, establishing strong market connections between Arctic States and traditional Indigenous knowledge, stewardship and a focus on small businesses and indeed on Indigenous-owned businesses. The Senator you heard say she wants the AEC to go on the road. I believe that certainly the Alaskan members, the eight of them, will be very willing to do so here in the United States and will encourage the business reps from the other countries to do the same. Just so you know, the AEC Alaska folks bring that same passion to the table that we had during the study. So we will be very well represented. Thank you. Drew, thank you so much and let me tell you at CSIS we always encourage insider information. So thank you. Thank you for that. That's terrific and I think that really highlights what we're going to anticipate next week. Just taking the moderators prerogative for a moment, just sort of my very brief reflections and being part of this incredible process. My co-conspirator, I'm sure he's here in the room, Frank Verastro, who's the senior vice president here at CSIS and holds our slush under chair and energy, plopped in my office one day and he said, hey, would you like to be part of this National Petroleum Council Arctic Research Study? I said, sure. He goes, Heather, it's a lot of work. And I'm like, okay, no, Heather, it's a lot of work. I was unprepared for the extraordinary amount of work, the people, the numbers, the meetings. It was extraordinary and you talk about passion. But what was so interesting is we all came from it from a very different perspective. For me, it was so helpful to understand the private sector, the technology. I mean, I can't, I could never understand the technology, but to have an appreciation for it and to have the private sector have an appreciation and quite frankly to be totally frightened about the policy environment in which these decisions are being made. And so it was an incredible learning experience and I think some great colleagues were formed and I think we're going to continue this conversation well after the study. I have to say again, reflections from the peanut gallery. The Department of Energy requested this study, but in some ways this runs into what Senator Mikowski mentioned is sometimes the biggest challenge is us, the U.S. and the interagency process because a lot of the conversation in these and as part of the study was really about the Department of Interior. The Department of Interior was in these processes and was very engaged, but they didn't request the study. This was about the Department of Energy trying to understand its emerging role in the Arctic. But it was a part of the process that I think was very interesting to see and to witness and have everyone experience it as well as getting that critical voice from Alaska. Again, we in the Washington policy communities get so focused on our interagency fights and our regulation and who's doing what and we've always been returned to what's important and that's the people and I was so grateful. Again, for my two cents, I think the larger question that the study raises that it doesn't come out, but this is my takeaway from it, does the United States once want to develop its offshore Arctic resources? Do we or don't we? That's not an easy question to answer. And there are a lot of questions about economic viability. There are a lot of questions about are we ready? Do we have sufficient infrastructure, search and rescue, oil spill prevention capabilities? Do we have what is necessary? And as we've all been watching Shell's journey, some may argue it's an odyssey of their efforts to do this. We've learned a lot through that process, but I think increasingly we're understanding and Drew, I was so grateful that you talked about the Arctic Economic Council because when the State Department first briefed their chairmanship agenda, I assure you the Arctic Economic Council was not at the top of that economic issue. They heard in stereo around the circumpolar Arctic that economic development had to be part of the conversation. And there was some reluctance. But I think we need to recognize they heard it and they're responding and we're being so this is important. These voices matter and we all have a piece of the conversation and it takes the 200 plus people that came around the table through the vehicle of the National Petroleum Council study to say we've got a lot of work to do. So again sort of the from the observation tower of this process, it was incredible. It's an incredible amount of work and I just I can't tell you Paula and Carol had killed themselves the last 12 months to to shepherd this motley group and get to a really incredible product. So I want to thank you so much. So now I get to turn to some questions and this is where I get to play a tough questioner here. Paula, I'd like you to as much as you can share sort of the challenge of the interagency process here. DOE has a strong role in this but not the total role and right before the study was completed, we had the Department of Interior propose some new guidelines, some new regulations and that sort of entered in at the end of it. What's your perspective on the interagency dynamic and your cooperative relationship with the Department of Interior as you work on these issues? Thanks Heather. We have an incredibly robust as many of you are aware interagency dialogue but also an incredible amount of collaboration particularly with the Office of Oil and Gas at DOE and the Department of Interior at various agencies for example in the aftermath of the Deepwater Horizon event. Many of the learnings that have been taken up have been developed in collaboration with our office as well as the research partnership for a secure energy America which involves about 140 companies and technology firms. Likewise we have as part of as directed by the President's blueprint for a secure energy of future which calls for an all of the above energy strategy. We have a multi agency strategy for understanding and working to develop the science to mitigate the impacts of unconventional oil and natural gas production and this is with our office and USGS and EPA. And likewise you see the recommendations that are pointed to DOE in this report really point back to that role for the Arctic as well. In one way the way I think about the work of our office is we're the Office of Science for federal and state regulators. We're in Alaska last week and I can tell you state regulators in Alaska are very much focused on these questions of understanding what the science says in an unbiased and neutral manner about how this activity can proceed and those are the same questions that our partners are asking at other federal agencies and we're the office that they turn to understand what the center of the science says and it's a vital role that government research plays in providing policymakers with an unbiased view of science technology and its performance so that we can move forward in these areas. So there's a very robust collaboration between our office and other agencies and the recommendations here provide us sort of a roadmap forward on what we should be looking at next in the area of science and technology. Carol, what surprised you the most about this study? You went into this and I think if I might tell my little tale out of school, I think Carol was surprised at the world of Washington policy sausage making, a Canadian herself, she was looking at this going, why do you do that? Well, why does that happen and I love that because it was hard to explain why but what took you by surprise the most about the study. Oh my gosh, it's hard to pick, it's hard to pick one thing. I guess what I would say, I mean you hit on it Heather, we just learned, those of us in the industry I think just learned a lot about the history of Arctic policy and also about the challenges in integrating the many different aspects of Arctic policy that are important to all stakeholders. I would say that when we came together to undertake this question, each of us probably came to the table with our own perspective of what was most important and I think truthfully each of us from our own corners of the room so to speak were thinking of this Heather, pretty simply and as we conducted the dialogue over those many months, the scope of the problem started small and got bigger and then we tried to synthesize and bring it together in a meaningful way. So, I mean I just learned so much in terms of the importance of listening fully and not letting your own biases stop you from hearing what someone else was trying to say. I learned that the ExxonMobil project management culture sometimes clashes with very focused on schedule and execution sometimes clashes with fulsome debate and we learned to tolerate the strengths that each of us brought to the team but what I would say is we started out this journey together with people saying well hello I'm Paul Agant from the Department of Energy and I'm Carol Lloyd from ExxonMobil and I'm Dr. Michael McCrander from Shell and along the way we moved from being individuals representing our respective interests and we became a team that was about trying to really understand the secretary's question and understand the broader context behind his question. So, you know I'm very pleased with what we delivered and if I look back on what helped us be successful I you know others will judge whether they think this is successful or not a critical two critical success factors one was establishing a very transparent schedule which we agreed with the with the secretary early on and the second was the selection of the right team at the coordinating subcommittee leaders like you are in the room with us today and are sitting at this table with me I'm just incredibly grateful for everyone's support and the opportunity. Thanks so much Carol. Drew I'm going to ask you a question actually I would have loved to ask Senator Murkowski and we just ran out of time. I want you from the state perspective in your legislative career the Alaskan state economy has really been battered. While on the one hand we can celebrate low energy prices boy the budget has taken a hit. This is I this is an urgency in Alaskan voices about their future economic growth model and concerns I think that Senator Murkowski expressed about his North Slow Boil production declines needing to find new opportunities having legislation White House you know pulling offshore onshore land away from exploration. What's the mood what's the sense and tell us because what was going to be interesting the next two years there are going to be a lot of a meetings with the Arctic Council the senior Arctic officials they're all going to be in Alaska they are going to hear an Alaskan perspective on this and I'd like you to preview that perspective. Well it'll be loud. You know the legislature is supposed to adjourn under statutory requirements Sunday night at midnight and I'm not sure that they're going to get out of town on time. One of the things that is battering us in particularly particular at the moment is the fact that that throughput in taps is down so low at this point running between around 500,000 barrels a day from the original 2 million barrels a day in the past including when I was chairing the Senate Finance Committee and oil dropped all the way down to $9.50 a barrel even though the state budget depends over 90% on the revenues that we get from our oil and gas resources and from the production of those resources we were able to actually get through those times of really low oil prices because we had a robust throughput in taps frankly. We've seen production come back up and cook inlet that's excellent but that continued drop in taps is really battering the budget and we'll continue to for the future until we can figure out a way to get more oil into what is not just in an Alaska important infrastructure but it's a national energy security infrastructure that needs to be protected for the nation's benefit not just for Alaskans. The mood is somber but Alaskans are resilient goodness knows so many Alaskans have as I said they've been there for thousands of years and they've been adapting for that entire time so there's a resiliency but there's also I would say a hopefulness that together Alaskans can come through make some changes to our base budget but also see opportunities in the future that will help provide continued jobs for Alaskans and for our children and grandchildren but also support that budget. It's never bad to look at budgets and see where there may be some bloat and that is happening but the legislature and the governor will be careful not to try to go too deep. The former lieutenant governor is smiling at me. I sense Meade may have a question when we turn to the audience but infrastructure is exactly where I wanted to go and Carol I wonder if you could because the report did have a reflection on infrastructure if you could just share a brief thought on that and Paula you have been focusing on transportation and infrastructure and that's obviously from shale gas and I just would love your reflections after Carol on this question of infrastructure national prioritization. So we do have an entire chapter in the report dedicated to logistics and infrastructure and recognize it's a significant challenge to progressing with the development in the Alaskan Arctic. With regard to exploration the infrastructure needs are much lower and as the industry moves forward with as shall move forward with their plans they will be bringing all the required equipment with them in order to safely and responsibly execute that program including all the oil spill response vessels and support that they have submitted to the regulator and they're required to bring by permit. With regard to the longer term infrastructure needs the report does a very good job of cataloging the current state of infrastructure what's available today what the gaps and opportunities are and then make some recommendations to move forward probably the most important one is that we see merit in continued emphasis on joint scenario planning including the federal government the state government the local communities probably most importantly and they likely would be in a best position to lead such an activity the oil and gas industry but also transportation fisheries tourism et cetera infrastructure is a shared resource and so a joint scenario plan could potentially open up the opportunity for partnerships in particular areas between governments and industry public private partnerships as as the senator was talking about earlier sure thanks Heather here in the lower 48 we talk a lot about the shale revolution and the knowledge that we have really great rocks and that that comes in really handy but the other reason that we're the envy of the world is that we have an incredibly robust delivery infrastructure and we have 2.4 million miles of natural gas pipeline alone and know where else in the world will you find infrastructure so prevalent so with this in mind the president has commissioned the quadrennial energy review that will be released very shortly and the first year is focused on on delivery infrastructure for energy and understanding what our needs are as a nation going forward in an integrated manner and in that in as you as that begins to roll out soon you'll you'll see I think a key learning from that is that energy infrastructure that the infrastructure that secures our energy delivery is not just pipes and tankers it's ports it's roads it's bridges it's all part of what underpins our economy whether here in the lower 48 or in Alaska and hence you see an incredible focus in the senator's remarks this morning as well as last week on a visit to Alaska a tremendous I mean there's a great deal of priority and debate being focused on a natural gas pipeline for example in Alaska as well as the future of taps and how to ensure it and it's sort of it's it goes hand in hand to develop the resource you have to have the knowledge that you can move the resource to markets where it's valued whether in Alaska are in other places so there will this all combined with the changing nature of the climate and new challenges that we are seeing with regard to mitigating the impacts of climate change on coastal communities and ports as well as roads and whether there are traditional roads or ice roads and new challenges with being able to build and maintain them as well as the pipeline infrastructure this is something I think we're going to be discussing quite robustly over the coming years because there are tremendous investments that we need to make onshore as well as offshore and thinking about data and communications as well as in securing maritime shipping lanes and the port support that would provide for us well response response for example so this is the age of infrastructure and we should all be very focused on thinking about all the ways that we can support the development because this is the underpinning for our economic and energy security well said all right it's time for the audience to engage in the discussion if you have any questions or comments please raise your hand and give us your name and affiliation if you're too shy I'm going to put you right on the spot so I think I'm going to put me Treadwell right on the spot former lieutenant governor of Alaska if we can have a microphone right here please thank you I'll introduce you so you don't have to me thanks Heather my affiliation is Heather and I are working on a world economic forum effort on bringing investment to the Arctic and I'm pleased to be here today and thank you for your report I'm sorry I missed your presentations in Alaska last week as a former chair of the US Arctic research commission we I can tell you one of my last meetings as chair was at the White House just about the time the Macondo spill was happening where we had come with some constructive suggestions on how the US could better structure its support for oil and gas oil spill or oil spill research what did you find as you looked at both the public-private partnership that's happening in Norway on oil and ice recovery and what should we be doing specifically to structure and fund our research program to meet the goal where you saw deficiencies here in this report thanks thanks for the question oil spill prevention and response is the top topic topic on the mind of all stakeholders and you know I mentioned in our recommendation that we really want a need to see the department of interior specifically Bessie join with the industry in collaborating in this important area like the example that you cite in in Norway for two reasons the first is that Bessie has spent a lot of money in the area of oil spill response in the Arctic and they have a lot to bring to the table they have a lot of expertise and the second is that they are importantly independent of the industry it's not enough for the industry to say that this particular response dispersants et cetera perform this way we really need that independent view what we think needs to happen is for the department of interior to join that group bring their research to the table we need to move forward with field tests in Arctic conditions some of those have been advanced in other countries but getting permits to do a field test of an oil spill response exercise is particularly difficult because no one wants to to champion that so we also see a need to to move forward with permits necessary in that regard there are discussions about building a specialized facility to test oil spill response off the east coast of Canada and Newfoundland as part of some of the research collaborations there so those are just a couple of thoughts about about what can be done in that very important area just quickly I would just DOE has since McCondo focused our research to a great extent on prevention of loss of controls because we do a lot of work on well-bore integrity understanding how your cement performs at pressure and depth understanding meta ocean currents and the stresses that put on risers and translating that into our work in basic material science to understand what the risers are made of for example there's also in that I think in the study some recommendations that we'll be considering next so we've been focused on the front end of the bow tie if you will but there's also some opportunities on that right side of that bow tie as Carol set out for us to work with the Department of Interior through our national labs network to demonstrate the effectiveness of some of the technologies that are available to to prevent or deal with loss of control of a well so while today we've been focused on preventing that your your best way to prevent an oil spill is to is to design your well really well and never lose control of it to begin with but if you do there are there have emerged an array of technologies to deal with it and what we need to do is make sure that we're demonstrating and testing those ways that people and the ways that people have confidence in so that's what we'll be looking at at DOE how we can participate in that through our national labs thank you one of the things that I learned and I think one of the things that those of us who worked on the study who were neither industry and or federal government is that there's not as much collaboration as we might expect or think or just thought was happening for example industry has an Arctic joint industry project for spell response technology that the US government is not party to why? I was surprised by that that they hadn't that Bessie and Bohem and others had not actually joined so we saw lots of opportunities and I think I came away with the belief that there needs to be better understanding by everyone of all the work that is being done and all the work that has been done and the technology that is out there whether we're practicing it and whether we're exercising it as well as we should is a different question particularly in the US where it's hard to get a permit to do a spell exercise but there's kind of a step two which is education which I think is something that CSIS and other institutions like that might want to focus on how do we how do we get the word out there what truly is happening? I would also say that I think it provides an opportunity for some of those public private partnerships that we're talking about because it's not just industry and it's not just the government there are private companies around the world that are working on spell technology every day and have some really bright minds working on it so there are some real opportunities and we should push forward to make those work for us I'll just add my two cents the Arctic Council is the international perspective here they have been working on oil spill prevention and I think in Kallawid they will be presenting a framework for that but it's going to be the US chairmanship that's going to have to work that issue I think in some ways the Arctic Council its challenges it does such amazing work great assessments the Arctic marine shipping assessment that made you were very engaged with fabulous recommendations and then okay who makes sure that the national governments really focus really implement those bring those to fruition and this is going to be the challenge for the US but there is a great deal of international collaboration I think the Arctic Economic Council correct me if I'm wrong Drew is going to have a big focus on energy and those implications again we're we're developing these good tools we need collaboration and just one final point Dr. Mark Myers who when we began the study was at the university in charge of research and when we ended the study is now the commissioner of natural resources for the state told us time and time again that everybody can do all of their research at the University of Alaska Fairbanks where they're actually building facilities for this type of research so once again bringing it home you had a quick follow-up and then I will let others get in here yes we'll start with you then no go ahead me we'll get a microphone my point about structure in the US government is that oh no here just get a microphone yeah yeah The Oil Pollution Act in 1990 created an interagency committee on coordinating oil pollution research I think it's called EICOPAR when I was there as we founded it we called it the intergalactic but I would really urge industry to play a much larger role in that committee I would urge DOE to play a much larger role on that committee understand the work of the Coast Guard because they've got the internal work and the state of Alaska has put money toward the joint industry program there is a way that we can come together and if you you know I find that the issue with oil spills is people who want to go ahead and drill want to pretend they don't happen they can happen we know they can happen and we have to constantly be pushing that edge forward and that committee needs greater attention to the White House and it needs greater participation by the federal agencies Yes Inuta Koulson from the Greenland representation one of the key findings was to secure public confidence in the development of oil and gas and Senator Makałski was you know touching upon the aspect of you know residents in the Arctic being more wants to see development while those outside you know wants to preserve it so how do you address that given the opposition from especially many of the environmental NGOs Well I just want to point out one of the difficulties of trying to address it so you know clearly you need public acceptance to move forward but if you look at the accidents that have happened in terms of oil and gas related industry in Alaska and around the world you'll find that most of those are related to transportation not to exploration phase and not to development phase however when you look at the new Bessie Arctic rags that came out last month arguably because of the timelines that are written into the rags it pushes exploration wells into a two season event rather than being able to go in drill your well and actually do your testing in one year and then get out if the real risk is during the transportation phase it does not make sense to push you into two years where you've got a stage twice up and back and up and back because you've got more ships in the water and you have more opportunity to have one of those transportation accidents so I think that what we need is a dialogue to understand what are the real risks and what are the opportunities and then we all have to accept that your risk is never going to be zero just as meat set we don't live in a zero risk world Henry Hedger retired government researcher at NARA perhaps you've heard of bottling plants for fresh water in Finland where they use icebergs the Arctic has a tremendous amount of ice and of course with the climate change they indicate it will melt once it's melted it is no longer serviceable it becomes salt water in the ocean but the fresh water is a great resource and bottling plants would be needed say in Alaska one of our own areas let alone Canada if they can reduce the amount of ice that's fresh all well and good and then there'd be less of a problem with the rising sea level also there's job creation thousands of jobs could be created and not just bottles of water but barrels of water could be shipped to areas of great concern like California and you'd have fresh water do you have any comments oh my goodness Drew go for it you know there was just an article on the Anchorage paper maybe yesterday that fresh water shipments are starting out of Sitka, Alaska to the lower 48 now that's not Arctic water but it's water it's fresh water so all the way back to Governor Hickl and Mrs. Hickl wouldn't let me sing all the way back but Governor Hickl had the dream of bringing Alaska's freshwater resources south and and various entities have picked up on that and have actually licensed some opportunities I think you will see people move forward and looking at the water resources that we have in Alaska as being a very important resource to the state but we're seeing that right now as kind of a fledgling industry in Alaska Hi, John Farrell our degree search commission I have a question for Dr. Gantt Dr. Gantt I was curious why Secretary Moniz commissioned this study and so I'm curious he will he will receive this report and he will provide a response to that report his recommendations in the report is there anything that you can at this point foreshadow as regards to what he might say in response to receiving this report and how he may consider those recommendations and begin to act on them John, you know I like my job and I'd like to keep it so I'm not going to be so bold as a suggest what the secretary might say I can tell you that he and the W. Secretary were very pleased with the quality of this report and it provides I mean it's 550 pages a lot of great science is consolidated there and we expect it will be a great resource for people as they come to the Arctic particularly those like me that know a lot less about it than you do John with regard to the record there are a number of recommendations that relate directly to DOE and where we might pursue science and research in almost all of those not only do they speak to our core mission and our core capabilities but they also are implicitly represent our collaboration with other agencies as well as our work with ICAPAR and the work that the commission has going on as well so as the secretary considers these recommendations and next steps we will be working with our interagency partners and other federal partners that were involved in this study effort and the recommendations to understand not only which are the which piece of these recommendations seem because we can't do everything at once than the most imperative and priority from a time perspective but which should be done through vehicles like our national labs which should be done in partnerships direct partnerships with other agencies which should be done through the Arctic Research Council or other or other agencies or through partnerships at the state level as Drew mentioned University of Alaska Fairbanks has tremendous capabilities in this area and they're already a great partner for us so we'll be looking for input as we move forward and I'll let the secretary speak for himself when he does thanks for the question I'd like to make a comment I really appreciate the question as well we want the report to be read and have impact but I want to integrate that question with the question we had over here on how to how to navigate the complex question that the senator laid out for us should we progress with development or and how do we balance that with concern for the changing climate I think the answer is in a debate that's rooted in science and research not the sound bites that come across on Twitter not the statistics that are short quotes without the technical data to back up what they mean you know you could you could identify in our report we say the risk of a well control event in the Arctic with new technology is extremely remote how do I reconcile that with the quote that says the risk of an oil spill is 70 percent the risk of an oil spill this summer is not 70 percent the data behind that calculation is that that risk is over the next 70 years now people don't say that on Twitter but what we really need to do is get the scientific community together ICOPAR John's organization the industry experts in oil spill response Paula's team together to explore the the findings in this report do you agree with them if not what more science and technology is needed in order to move forward and and as Paula outlined in her opening questions only then can we have good science good research inform good policy and that's how I think we can find some middle ground between these very polarized opinions and move beyond them being someone's personal opinion well I'm unfortunately the time is close I'm going to have to cut it off here but as you can tell what a privilege it was to be a part of a team of such thoughtful people trying to wrestle with extremely tough complex questions and we know the stakes are enormous I think when you showed Richard Glenn's quote Drew we have to have him hear a little Arctic rock and roll concert I think we have to jazz up our next conversation on the future of development of the American Arctic but please join me in thanking our panelists for a great presentation now don't go away we're going to very quickly switch panelists and we're going to have conclude with our Arctic health discussion thank you