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Remarks by the Secretary and Deputy Secretary at Norway Arctic Roundtable

Location: Trondheim, Norway

As part of the Obama administration's "all of the above" energy strategy, Secretary of the Interior Ken Salazar and Deputy Secretary David J. Hayes today delivered remarks at the Norway Arctic Roundtable in Trondheim, Norway. These discussions and meetings are part of the Obama administration's commitment to expanding safe and responsible production of our domestic resources while ensuring the strongest possible safety and environmental oversight of offshore oil and gas activities on the U.S. Outer Continental Shelf.

Secretary Salazar and Deputy Secretary Hayes's remarks from the Norway Arctic Roundtable, as prepared for delivery, are below:

Remarks by Secretary Salazar at the Norway Arctic Roundtable
June 26, 2012 -- Trondheim, Norway
As Prepared for Delivery

Good morning to my counterparts, industry representatives and other dignitaries here today.

A special thank you to Ola Borten Moe, Norway's minister of petroleum and energy and his staff, for welcoming us all to your great country and for organizing two days of focused discussions about safe and responsible oil and gas development in the oceans of the world.

All of us are here today because we have a shared interest in the Arctic. We share its waters. We confront shared challenges in its frontiers. And we have a shared stake in a sustainable future.

The challenges we see in the Arctic bring together a number of overlapping conversations. It's impossible to talk about energy development and resource management without talking about the need to preserve fragile environments, the need to develop infrastructure, or the need to protect Native communities and their way of life.

For U.S. policy-makers, these issues coalesce in Alaska, which includes America's Arctic.

The Department of the Interior has significant equities in Alaska. We manage more than half of all land in Alaska, including Denali National Park and the Alaska National Wildlife Refuge. We also oversee all of Alaska's Outer Continental Shelf, including the Beaufort and Chukchi Seas in the Arctic.

As Secretary of the Interior -- responsible for the stewardship of America's natural resources and energy supplies -- I can tell you that President Obama and his administration take very seriously the complexities and unique conditions in the Arctic. It is a frontier. It is a place where development can only safely expand if we also expand our understanding through science and experience.

That is why the Arctic, we believe, demands its own approach. We have to listen to each other as global partners and we must listen to local communities. We have to invest in science and share information. We have to cooperate in our planning. And we must always put caution and safety first.

Nowhere are caution and safety more important than in energy exploration and development.

In the U.S. Arctic, the Beaufort and Chukchi Seas hold large estimated undiscovered oil and gas resources.

These resources, if developed safely, can be important components in the "all of the above' energy strategy that President Obama is implementing to expand U.S. energy production.

But if we are to access these resources, we have to take a careful, step-by-step approach that is grounded in science and that protects subsistence uses, wildlife, local communities, and the broader ecosystem.

And while we must do everything possible to proceed safely and responsibly, we must, of course, be ready to respond in the event of an incident.

Many of you know that we are currently in the final stages of a rigorous review of Shell's proposal to drill exploratory wells in the Beaufort and Chukchi Seas this summer.

If Shell meets our standards and passes our inspections, its exploration activities will be conducted under the closest oversight and most rigorous safety standards ever implemented.

In particular, all operators must now meet new drilling safety standards requirements for the equipment, systems, and infrastructure necessary for spill response in the Arctic. We implemented these standards in the aftermath of the Deepwater Horizon disaster two years ago as part of the most aggressive and comprehensive reforms to offshore oil and gas regulation in U.S. history.

Operators must also comply with strong new oversight from the Bureau of Safety and Environmental Enforcement, an agency we established last year to focus solely on safety and environmental protection. If Shell activities in the Arctic proceed this summer, BSEE will have an inspector on-site 24 hours a day. They are also required to have a full suite of response capabilities in the area, including a capping stack and containment systems.

These near-term exploratory activities would be limited in scale--and for good reason: we want to be certain that any activity is well within planning, safety and response capabilities that are deployed.

We also believe that this type of careful exploration in the Arctic can help develop critical science and information to guide future leasing and development decisions. This is, in fact, an important principle of the Administration's offshore energy strategy over the next five years.

Later this week, I will announce our final proposed Five Year Outer Continental Shelf Oil and Gas Leasing Program, which outlines our plan for safely and responsibly expanding energy development, including in the Arctic.

Like the Gulf of Mexico lease sale we held last week, which made nearly 39 million acres available and brought in over $1.7 billion U.S. dollars in bonus bids, this five-year program will show that we can move confidently -- with comprehensive safety standards in place -- to continue to grow our energy economy at home while protecting the environment and human health.

In this plan, we will make available vast areas in the most resource-rich parts of the U.S. outer continental shelf for oil and gas leasing. This includes frontier areas of the Alaskan Arctic.

Our plan schedules two potential lease sales in the Arctic -- one in the Chukchi planning area in 2016, and one in the Beaufort planning area in 2017.

Our goal is to maximize the availability of oil and gas resources in those areas that we are making available for leasing, while minimizing potential conflicts with environmentally sensitive areas and the native Alaskan communities that rely on the ocean for subsistence use.

To achieve this, we are taking a different approach -- a more strategic approach -- than the past. Specifically, we intend to gather information from industry, Native Alaskan communities, the scientific community, and the public to identify specific high-resource, low-conflict areas that are best suited for exploration and development.

This strategy, which is similar to how we now conduct onshore oil and gas lease sales and offshore wind energy planning, will allow us to design potential lease sales in the Arctic in a way that best balances factors like resource potential, subsistence use, and environmental considerations. Specifically, this analysis will help us to design the specific features of Arctic sales -- like the size and location of the sale area and the terms and conditions that ensure that any leases are developed responsibly. This will enhance certainty for industry and reduce conflict, litigation, and delays.

You can call this approach "targeted leasing." It means that we are aggregating what we know and identifying areas best suited for exploration and development, based on the latest information.

For example, a 25 mile buffer along the coast of the Chukchi Sea has long been excluded from leasing because it is so important for Native subsistence use. We will continue to maintain that buffer in our next plan.

In this next five-year plan, we have determined that an additional area north of Barrow -- one that has not historically attracted industry interest and that has very high subsistence value to Native Alaskan communities -- will not be considered for future leasing for the same reason.

Leasing has tended to focus in areas elsewhere in the Chukchi with higher estimated resource potential, so this area fits our strategy of offering areas with the greatest resources.

Overall, this Arctic strategy represents a shift from the "one-size-fits-all' approach of the past to a recognition of that science, planning, and the voices of local communities can guide us on a smarter, more strategic, and more effective path.

I look forward to the opportunity to share our experiences with you today, and to hear from all of you about your experiences in the Arctic frontier.

With that, I will turn it over to Deputy Secretary David J. Hayes for his remarks.


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