Speaker 1: Welcome to Crash Course, a podcast about business, political, and
Speaker 1: social disruption and what we can learn from it. I'm
Speaker 1: Tim O'Brien. Today's crash Course. The race to control the Arctic.
Speaker 1: Alaska has been an object of fascination, exploration, and exploitation
Speaker 1: for nearly two centuries, but its most inhospitable reaches. Those
Speaker 1: that creep toward the Arctic circle mile by frozen mile,
Speaker 1: have managed to hold onto their secrets for a very
Speaker 1: long time. Ice, plunging temperatures and brutal tundras have kept
Speaker 1: outsiders at bay. That's all shifting now. Climate change is
Speaker 1: warmly Arctics formidable barriers sparking at geopolitical and commercial foot race.
Speaker 1: The US, China, and Russia are scrambling for access to
Speaker 1: precious resources like oil, gold, and rare earth metals. Russia
Speaker 1: is ramping up its military presence in the region, China
Speaker 1: is now a self described near Arctic nation, and the
Speaker 1: US is rushing to gain what its military describes as
Speaker 1: Arctic dominance. Conoco Phillips, the US oil giant that is
Speaker 1: Alaska's largest producer of crude oil, recently won White House
Speaker 1: approval to forge ahead with its Willow drilling project on
Speaker 1: Alaska's North slope. Meanwhile, Alaska's fisheries, which account for more
Speaker 1: annual catch than the rest of the US's other coastlines combined,
Speaker 1: are becoming increasingly stressed. Average Alaskans, wrestling with the twin
Speaker 1: threats of food insecurity and their attachment to storied livelihoods
Speaker 1: tied to fishing, are balking at further entrenchment of large
Speaker 1: commercial operators. There is, as they say, a story here.
Speaker 1: Joining me today is Liam Denning. Liam is an energy
Speaker 1: and climate columnist for Bloomberg Opinion, and he's pulled off
Speaker 1: something very rare and very hard to do. He has
Speaker 1: repeatedly traveled to the Arctic to tell this tale. Liam
Speaker 1: is a wonderful writer and a keen observer of money,
Speaker 1: power and people. Liam, welcome to crash Course, great spage.
Speaker 1: So work on all this has so far resulted in
Speaker 1: three stellar features adorned with beautiful photos from Louis Palou,
Speaker 1: an award winning photographer who has spent years covering the region.
Speaker 1: You've written one about the military ramp up in the Arctic,
Speaker 1: one about energy exploration, and another recently published about Alaska's fisheries.
Speaker 1: So we'll follow suit and build this episode around that troika.
Speaker 1: But first things first, how and when did you decide
Speaker 1: to go to the Arctic and nail down all of this?
Speaker 2: Well, Tim, as you know, this goes back quite a
Speaker 2: long way. Louis and I, who've known each other for
Speaker 2: I guess about fifteen years now, first began discussing this
Speaker 2: seven or eight years ago, I believe, and I began
Speaker 2: discussing it with you and Bloomberg in general, I think
Speaker 2: in twenty eighteen, and we actually had it teed up
Speaker 2: just before COVID hit, which then inevitably shut everything down.
Speaker 2: And then about a year ago, thinking we could pull
Speaker 2: it off once again, we began to reach out to
Speaker 2: the US Army and other key players in Alaska. And
Speaker 2: to be honest, I'm pinching myself thinking that we actually
Speaker 2: managed to pull it off. It's been quite the logistical lift.
Speaker 1: Well, and you had to reach out to all of
Speaker 1: those stakeholders, the military, the energy companies, local fishing communities
Speaker 1: in order to embed yourself to sort of get there,
Speaker 1: buy in to have you come up there and spend time.
Speaker 1: And then you had to figure out how to get there,
Speaker 1: how to fly there, how to arrange all the various
Speaker 1: legs of each flight that took you there, which was
Speaker 1: its own sort of logistical nightmare, wasn't it. That's right?
Speaker 2: I mean, I think one of the things you learned
Speaker 2: quite quickly is that Alaska is a US state, but
Speaker 2: it's not the kind of place you can just rock
Speaker 2: up to and look around. You know, it's vast. A
Speaker 2: lot of it isn't covered by a road network, particularly
Speaker 2: for example, the North Slope where the oil operations are,
Speaker 2: you physically just can't get there. You have to, you know,
Speaker 2: negotiate access, and similar with a lot of the Alaska
Speaker 2: Native villages out in the west of the state. You
Speaker 2: need to get buy in before you really show up.
Speaker 1: And why was it important you to go through all that?
Speaker 2: Well, I think this goes back to the original reason,
Speaker 2: you know, Louis and I wanted to do this project was,
Speaker 2: you know, we felt that the Arctic is in some
Speaker 2: ways a kind of a grand blank canvas where we
Speaker 2: tend to project our narratives onto it, our ideas of
Speaker 2: what the Arctic is, and we felt that really to
Speaker 2: do it justice and to show our readers what it's
Speaker 2: really like there, you have to get on the ground.
Speaker 2: You have to go and see what it's like just
Speaker 2: to even get to the place, what it's like to
Speaker 2: feel the cold and the extreme temperatures there, what it's like, frankly,
Speaker 2: just to bulk up in five layers of clothing and
Speaker 2: try to do anything there. And so that element of
Speaker 2: reality was what we were going for.
Speaker 1: I'll just make a note to our listeners here. We'll
Speaker 1: have links all of Liam's stories in the notes to
Speaker 1: the episode. There. You'll find Louis Polo's gorgeous photography there,
Speaker 1: which will really give you a sense of the land
Speaker 1: and the environment that Liam covered and that they work
Speaker 1: very hard to overcome in order to get these incredible stories.
Speaker 1: So let's talk about the military foot race that's in
Speaker 1: motion there. You embedded with one of the airborne divisions
Speaker 1: of the US Army and watch them train. You talk
Speaker 1: with them about their strategy in the region. Talk a
Speaker 1: little bit about that. What is on the US military's
Speaker 1: mind right now and why are they ramping up their
Speaker 1: commitment to the Arctic.
Speaker 2: Well, I think one of the things you realize about
Speaker 2: Alaska's relationship with the rest of the US is that
Speaker 2: the Lower forty eight tends to remember that Alaska's there
Speaker 2: when it's feeling frightened about something. The classic example is
Speaker 2: the oil shock of the nineteen seventies when suddenly we decided,
Speaker 2: you know, we had to develop Alaskan oil. And similarly
Speaker 2: with the Cold War, and what's happened with Alaska so
Speaker 2: far this century is it became kind of a military
Speaker 2: backwater during the War on Terror, kind of a staging post, frankly,
Speaker 2: for divisions that were cycling in and out of Afghanistan.
Speaker 2: And a few things have changed that in recent times.
Speaker 2: One is China's assertion of what it euphemistically calls near
Speaker 2: Arctic status, which I just think is a gorgeous phrase.
Speaker 1: China is so big it could probably be near almost anything.
Speaker 1: I mean, exactly near South China, see near Japan, exactly
Speaker 1: near India, Russia.
Speaker 2: And I think that began to ring alarm bells in Washington.
Speaker 2: And at the same time the War on Terror itself
Speaker 2: was winding down for various reasons, we also saw Russia
Speaker 2: reopening its military bases, a lot of which had closed down.
Speaker 2: These are the ones in the Arctic, as part of
Speaker 2: President Vladimir Putin's general kind of turn northward towards the Arctic,
Speaker 2: particularly for its energy resources, and so I think the
Speaker 2: US is undergoing something of a Sputnik moment. It's remembering
Speaker 2: that Alaska is there, that it's a strategic salient, and
Speaker 2: that it is surrounded by potential ad or outright adversaries,
Speaker 2: you know, who might want to mess with that region.
Speaker 2: And so they've decided to reconstitute a division there, an
Speaker 2: army division. The eleventh their born, and those are the
Speaker 2: guys we went and spent time on a mountain side
Speaker 2: with earlier this year.
Speaker 1: I want to ask you some more specifics about that.
Speaker 1: But you know, as you're describing all of these forces
Speaker 1: in motion around the Arctic right now, it's very reminiscent
Speaker 1: of the Great Game of the nineteenth century when European
Speaker 1: powers with scrambled to control Africa and parts of Asia.
Speaker 1: Of course, a game made it seem far less consequential
Speaker 1: than it was, but it was this sort of jostling
Speaker 1: for geographic power that hasn't really occurred very baldly like
Speaker 1: that since then. And it's certainly in play right now
Speaker 1: in the Arctic, and it does sort of capture the
Speaker 1: imagination on so many levels, because it's fast, because it's unknown,
Speaker 1: because it's so far away because there's this idea that
Speaker 1: there are riches at stake, because there's local populations who
Speaker 1: are going to get displaced inevitably, or one hopes at
Speaker 1: least not brutally or tragically. And it's unusual to me
Speaker 1: in that regard. There aren't that many forums left like
Speaker 1: this on the planet, that's right.
Speaker 2: I mean, Alaska is called the last Frontier for a reason,
Speaker 2: and in some ways it is kind of a throwback
Speaker 2: to an earlier rage. I mean, Alaska as a state
Speaker 2: has existed, particularly in the imagination of the Lower forty eight.
Speaker 2: Let's face it, really on two strategic dimensions. One is
Speaker 2: as a frontier facing other nations. It was obviously territory
Speaker 2: that was purchased from the Russians originally, but also as
Speaker 2: basically as a storehouse for commodities, you know, lumber, fish, zinc,
Speaker 2: oil especially, And that's generally how we've tended to think
Speaker 2: of Alaska in the Lower forty eight. And we have
Speaker 2: to remember it is the least visited state of all fifty.
Speaker 2: For most Americans, it's a place they will never go to.
Speaker 1: And originally it was Seward's folly when Lincoln, Secretary of State,
Speaker 1: made the purchase. Everyone thought that the Lincoln White House
Speaker 1: overspent and they'd never get the money back, so that
Speaker 1: proved be wrong. Yeah, it took about a century, gets
Speaker 1: a century, but there's still some unknown. So tell me
Speaker 1: what is the US military's goal there?
Speaker 2: So this is interesting because when I was there, I
Speaker 2: tried to pin them down, you know, from privates right
Speaker 2: the way up to Major General Brian Eifler, who commands
Speaker 2: the eleventh there born on what the exact mission was.
Speaker 2: This is an unsatisfying answer, somewhat vacant broad because you
Speaker 2: really don't know what the threat to Alaska might be.
Speaker 2: It seems incomprehensible that anyone would actually try to invade
Speaker 2: Alaska or take territory. It would probably end up being
Speaker 2: the biggest search and rescue operation in the history of
Speaker 2: the planet, just in terms of surviving. And that gets
Speaker 2: to really what their mission is at this moment. It's
Speaker 2: to train troops to survive. You know, when you get
Speaker 2: there and you see the not just the grandeur of
Speaker 2: the place, but just the sheer desolate aspect of it,
Speaker 2: the emptiness, it becomes clear to you that having anyone
Speaker 2: operate there requires all sorts of training just to live,
Speaker 2: not just to manage the cold and wearing your clothes
Speaker 2: properly and all that kind of thing, but making sure
Speaker 2: you eat enough, making sure you drink enough, making sure
Speaker 2: you don't use fingernail polish on your fingernails, because that's
Speaker 2: how you check for frostbite, and you can't do that
Speaker 2: if you're wearing lacquer. There are all sorts of things,
Speaker 2: and Louie and I, to a very minimal extent, compared
Speaker 2: to the soldiers who were training, had to do a
Speaker 2: little bit of that ourselves. You have to reimagine how
Speaker 2: you're living day to day and take care of the basics.
Speaker 2: And I think that is the army's mission right now.
Speaker 2: It's to regain a muscle that was lost maybe twenty
Speaker 2: or thirty years ago, around the time of the end
Speaker 2: of the Cold War. So that as and when something happens,
Speaker 2: whether it's sabotage, whether it's a foreign fishing fleet showing
Speaker 2: up where they're not supposed to, whether it's a spy
Speaker 2: balloon showing up when it's not supposed to, that they
Speaker 2: have people on the ground both acting as a credible
Speaker 2: deterrent but able to deal with those things as they arise.
Speaker 1: So is the strategy reactive or proactive? In other words,
Speaker 1: is the military responding to what they perceive as Chinese
Speaker 1: and Russian incursions or are they anticipating that Russia and
Speaker 1: China are going to continue to scramble for stakeholdings in
Speaker 1: the north around the Arctic, and the US better get
Speaker 1: busy and build its foundations out in Alaska.
Speaker 2: It leans much towards the latter, I think. I think
Speaker 2: the third element that's happening here, and you'll see this
Speaker 2: in the Army's public documents on the strategy, is climate change.
Speaker 2: The ground is literally shifting beneath their feet. The Arctic
Speaker 2: is warming faster than the rest of the planet, and
Speaker 2: you know, when you're there, you can see it almost
Speaker 2: happening in real time. I visited coastal villages where you
Speaker 2: can see chunks of the land just falling into the
Speaker 2: river or falling into the bearing sea and sitting there
Speaker 2: almost like gravestones. You can see like.
Speaker 1: Big chunks of like glacial flows fracturing and falling off
Speaker 1: into the sea.
Speaker 2: Not glacial flows, I mean, what I saw was literally
Speaker 2: riverbank and coastal earth that had fallen into the water,
Speaker 2: you know, And that's because we're seeing a combination of
Speaker 2: sea level rising but also the perma frost gradually melting
Speaker 2: and melting and melting. And since most of these places,
Speaker 2: particularly in the western and northern part of the state,
Speaker 2: are built on permafrost, I mean when you go there,
Speaker 2: you see the houses all up on stilts. I saw
Speaker 2: an entire basketball court constructed on stilts in this village
Speaker 2: for the children to enjoy.
Speaker 1: So it's more like a landslide, yes into the water.
Speaker 2: Yes, And actually, I think you bring up an important point.
Speaker 2: We often see commentary on the Arctic portrayed as a
Speaker 2: scramble for things, you know, a scramble for resources, a
Speaker 2: scramble for influence. No one scrambles in the Arctic. It
Speaker 2: takes a long time to do anything. I think the
Speaker 2: better analogy is subsidence or encroachment. Things are changing, the
Speaker 2: physical landscape is changing. The pressures on the people there
Speaker 2: are changing. The great powers around the region are changing
Speaker 2: their stance, And that's really what Not only the army
Speaker 2: is trying to plan for it, or at least ready
Speaker 2: itself for but frankly, everyone who lives there.
Speaker 1: How many troops does the US have up there.
Speaker 2: Now has roughly twelve thousand.
Speaker 1: Twelve thousand seems to me like a relatively modest commitment,
Speaker 1: but it's nonetheless more significant than having ten people sitting
Speaker 1: in a house somewhere.
Speaker 2: That's true, and I think, you know, one way of
Speaker 2: thinking about it is the entire population of Alaska is
Speaker 2: smaller than San Francisco. It's about seven hundred and fifty
Speaker 2: thousand people, so in terms of troops to population, it's
Speaker 2: pretty high. I also found out that Alaska has the
Speaker 2: highest number of veterans related to the population. It is
Speaker 2: a military outpost in so many respects. The Army ran
Speaker 2: it for the first ten years when it became part
Speaker 2: of the United States, and everywhere you go, you know,
Speaker 2: you land at Fairbanks, the first people you see are
Speaker 2: troops getting off planes going to the nearby bases. It
Speaker 2: was obviously a frontline for the Cold War and is
Speaker 2: emerging once again as a potential frontline.
Speaker 1: And as you accompanied the troops on some of their
Speaker 1: training runs, I remember from one of the stories you
Speaker 1: described that some of them were just learning how to
Speaker 1: basically embed themselves in the snow in white camouflage gear
Speaker 1: so they could look invisible. So they were learning how
Speaker 1: to become invisible in a landscape that almost invites invisibility,
Speaker 1: and it had this kind of redundant quality to it
Speaker 1: but also necessary.
Speaker 2: That's right. And one of the really interesting aspects about
Speaker 2: it is if you go to a country like Finland,
Speaker 2: which basically wrote the book on winter warfare, they actually
Speaker 2: select their Arctic troops from certain regions of the country
Speaker 2: to better align with natural skills around skiing and that
Speaker 2: sort of thing. That is not the case with Alaska.
Speaker 2: I met troops the woman you mentioned who I attracted
Speaker 2: when she was doing camouflage training. She was from Florida.
Speaker 2: I met a sergeant from South Texas who says that
Speaker 2: when he first got stationed there, he would get frostbite
Speaker 2: all the time wandering around outside, like picking up tools
Speaker 2: and that sort of thing. These are, in many ways
Speaker 2: really raw recruits for that environment. Half them had never
Speaker 2: even put on a set of skis before.
Speaker 1: So what's the attraction to them to go there.
Speaker 2: It's interesting for most of them. Certainly, the people I
Speaker 2: met on that training course, most of them had volunteered.
Speaker 2: They hadn't been told you have to go here. They
Speaker 2: had volunteered for this leadership course. And I think It's
Speaker 2: that classic attraction of going somewhere that's out of the
Speaker 2: way that otherwise you would never get to, and putting
Speaker 2: your body through that kind of environment, frankly, putting your
Speaker 2: mind through that kind of environment. And that was another
Speaker 2: thing that you know, I really gathered by being there
Speaker 2: on the ground. Even during my six days there, the
Speaker 2: isolation and the darkness kind of began to get to
Speaker 2: me by the end of it. If you're stationed there
Speaker 2: for months on end, the isolation, the darkness, and the
Speaker 2: unrelenting nature of the weather, you know, the wind just
Speaker 2: whipping through you every day, it really starts to prey
Speaker 2: on the mind. And it was certainly something that came
Speaker 2: up in a lot of conversations, the need to manage
Speaker 2: that and to not sort of draw into a cocoon,
Speaker 2: which I think is what can happen with a lot
Speaker 2: of these troops. You know, when I was speaking to
Speaker 2: Steve Decker, who is a retired US soldier who now
Speaker 2: operates as a civilian trainer at the Northern Warfare Training Center,
Speaker 2: he related a story from some years back, you know,
Speaker 2: where he saw on the ground not just a soldier,
Speaker 2: but an entire platoon. Mentally to the rigors of the place.
Speaker 1: Let's listen to that sound bite.
Speaker 3: And I come walking back to where my platoon was
Speaker 3: and I look at him and there they're like maybe
Speaker 3: fifty yards away from me, and all three of our
Speaker 3: Occio sleds were sitting there, but the whole tune was
Speaker 3: standing around them, just staring at them. And I'm looking
Speaker 3: at them and I'm like, why aren't they setting up
Speaker 3: their tents? And so I'm walking over there and they're
Speaker 3: all just kind of just staring at it. It's like,
Speaker 3: this is the means to take all this away, but
Speaker 3: I cannot break out of this cocoon that I'm in
Speaker 3: right now to do this. And I was just about
Speaker 3: to say something when one of my more forceful squad
Speaker 3: leaders blindsided me from the side and he comes like.
Speaker 4: Froll people around, get their shit like that, and then
Speaker 4: they started getting moving. But I watched it at a
Speaker 4: lot that withdraw where people just they just withdraw within
Speaker 4: themselves and they will not make.
Speaker 3: Efforts to alleviate the pain that they're going through whatever.
Speaker 3: And I've done it myself.
Speaker 1: What kind of a military presence do the Chinese and
Speaker 1: Russians have?
Speaker 2: So Russia in so many ways is the Arctic whale.
Speaker 2: It has the most territory, the most people, the most
Speaker 2: economic activity, and the biggest military presence in the Arctic.
Speaker 2: And in a way that's understandable. They have the biggest
Speaker 2: physical presence in the arc.
Speaker 1: They truly are in our nation.
Speaker 2: Absolutely, whereas we are more a southern nation with an
Speaker 2: Arctic fringe the best way to put it. So, their
Speaker 2: military presence is big, both in scale and its elements.
Speaker 2: For example, you know a lot of the strategic nuclear
Speaker 2: fleet is based up in the Cola Peninsula close to Finland.
Speaker 2: So Russia's presence is huge and is only going to
Speaker 2: get bigger, in part because Putin has made it such
Speaker 2: a central plank of his vision for what Russia will
Speaker 2: be as a great power over the coming decades. You know,
Speaker 2: that need to open up a northern sea route as
Speaker 2: the ice melts, That need to export more oil and
Speaker 2: gas from the Arctic coast as the old West Siberian
Speaker 2: fields go into terminal decline. China, well, China's a bit different.
Speaker 2: China isn't an Arctic nation. It's forays into the Arctic
Speaker 2: right now mainly consist of the odd naval patrol, the
Speaker 2: odd joint exercise with the Russians. They do have scientific
Speaker 2: outposts throughout the Arctic, and you know, it's widely thought
Speaker 2: that those are essentially dual use. But China clearly has
Speaker 2: designs on the Arctic as an undergoverned space, to use
Speaker 2: that phrase, particularly as waters that are outside of economic
Speaker 2: zones become more navigable. China sees that as a place
Speaker 2: where it can stake out a position, maybe send its
Speaker 2: famous fishing fleets, and you know, become more of an
Speaker 2: Arctic power.
Speaker 1: But as of yet this isn't something that anyone sees turning.
Speaker 2: Heart no, but certainly if you read the Army's strategic papers,
Speaker 2: I mean, the word China comes up more often than
Speaker 2: your average Trump rally. It's very much front of mind.
Speaker 2: In some ways. It's kind of strange. Although Russia is
Speaker 2: the very present power, in some ways, China has feared more.
Speaker 1: All right, on that noe, Let's take a break, Liam,
Speaker 1: We'll hear from a sponsor, and then we'll come back
Speaker 1: and talk about some of the commercial war games going
Speaker 1: on up there. We're back with William Denning, a Bloomberg
Speaker 1: opinion columnist who's been charting the rush to control the Arctic,
Speaker 1: as told through his repeat visits to Alaska. So oil, oil, oil,
Speaker 1: A lot of contemporary Alaskan history and geopolitics can be
Speaker 1: looked at through that lens canon Liam.
Speaker 2: Yeah, and I think it's particularly poignant right now, given
Speaker 2: what's going on in the Middle East for us to
Speaker 2: remember that Alaska's oil boom really is owed to the
Speaker 2: Yong Kapo War. It was the Arab oil embargo that
Speaker 2: followed that that essentially persuaded Congress and then President Nixon
Speaker 2: to force through the construction of the transk Alaska Pipeline
Speaker 2: and kick off a boom that you know eventually led
Speaker 2: to Alaska during the nineteen eight is becoming the kind
Speaker 2: of the shale power of that period, accounting for about
Speaker 2: a quarter of US oil production.
Speaker 1: As you noted one of your pieces, there's an ocean
Speaker 1: of oil and gas rosen in place beneath the Arctic,
Speaker 1: and I suppose the logic for the energy companies exploring
Speaker 1: up there is that climate change is going to make
Speaker 1: that less hard to get to or am I oversimplifying?
Speaker 2: Yeah, there is that horrible kind of doom loop going on.
Speaker 2: As the ice melts, you open up more resources to exploit,
Speaker 2: which then help more of the ice melt. That's definitely
Speaker 2: going on. But I think it's important to remember that
Speaker 2: the oil resources up there, and don't get me wrong,
Speaker 2: all the estimates indicate there is a lot of oil
Speaker 2: and gas in the Arctic. It's frozen in place, not
Speaker 2: just by ice, but by its sheer remoteness. Going back
Speaker 2: to that idea I had earlier on about the lower
Speaker 2: forty eight, remembering Alaska when it's feeling anxious about the world.
Speaker 2: That is what led to the oil boom in Alaska.
Speaker 2: This is not a place that you would ordinarily really
Speaker 2: want to go to get oil. It's really hard, it's
Speaker 2: really expensive. Only the biggest players can go there. If
Speaker 2: you get it wrong, it can be catastrophic. Shell famously
Speaker 2: wrote off seven or eight billion dollar last decade trying
Speaker 2: to get oil out of the Chuchise and got nothing.
Speaker 2: So it's not just a question of as the ice melts,
Speaker 2: we will develop more of it. It's also does it
Speaker 2: make economic sense? Does it make sense on some other axes,
Speaker 2: for example energy security.
Speaker 1: You have this interesting little statistic in your piece that
Speaker 1: I think onshore projects in Alaska can take about fifteen
Speaker 1: years to sort of come to fruition offshore when you're
Speaker 1: out in the water can take thirty years, and projects
Speaker 1: elsewhere unless threatening climates can be anywhere from several months
Speaker 1: to five years, depending on the scope of the project.
Speaker 1: Is that right more or less?
Speaker 2: Yeah, that's an estimate for the National Petroleum Council. That
Speaker 2: is one of the things that I think prevents what
Speaker 2: some people would call it a scramble for oil in
Speaker 2: the Arctic. You know, if you're looking at a project
Speaker 2: that's going to take fifty years or thirty years to
Speaker 2: come to fruition, particularly at this moment in time, when
Speaker 2: you know some people are estimating oil demand could peak
Speaker 2: this decade or next decade, it's very hard to get
Speaker 2: a financier to sign off on that.
Speaker 1: You spend a lot of time at Kuparak, a Carnico
Speaker 1: Phillips project site, given all of these challenges. Why is
Speaker 1: Carnical Phillips there.
Speaker 2: Well, this will sound perhaps a little banal, it's there
Speaker 2: because it's already there. With a lot of these big
Speaker 2: oil provinces that were developed in response to the oil
Speaker 2: shocks of the nineteen seventies, they were developed under a
Speaker 2: very specific set of pressures and circumstances. Oil prices were
Speaker 2: super high, so you could justify pretty much anything, and
Speaker 2: you had governments prodding you in the back to get
Speaker 2: this done in order to bring about energy security. Now,
Speaker 2: the fact is Conico is already the largest player there,
Speaker 2: and if you think about the Willow project, as you mentioned,
Speaker 2: which is the new one that's being developed. You know,
Speaker 2: if you think about that, Konko is going to spend
Speaker 2: something like seven or eight billion dollars on that project.
Speaker 2: It's a reasonably sized oil project, but certainly it's not
Speaker 2: a giant project. But the reason they can do it
Speaker 2: is because it's only a few miles from where they
Speaker 2: already have investments made in pipelines, gravel minds, that sort
Speaker 2: of thing.
Speaker 1: So it's incremental.
Speaker 2: Right. If you were a new player, it would be
Speaker 2: almost unfathomable to think that you might just go in
Speaker 2: there and develop that from scratch.
Speaker 1: You also noted in your piece that the energy companies
Speaker 1: face the same environmental and climactic challenges that the military faces.
Speaker 1: Equipment breaks down, it's hard to get people to live there,
Speaker 1: et cetera, et cetera. Another thing that's in play, obviously too,
Speaker 1: is that there has been this sense that the fossil
Speaker 1: fuel industry has plateaued or has been peaking as there's
Speaker 1: a push toward green The irony in Alaska is the
Speaker 1: climate change that fossil fuels help engender is making it
Speaker 1: easier for fossil fuel exploration to proceed apace in Alaska.
Speaker 1: But is there any thinking, even a veteran player like Conico,
Speaker 1: that all of the money they're spending and all these
Speaker 1: projects they're working on now have a shorter half life
Speaker 1: than maybe they did a decade ago because of the
Speaker 1: green energy push? Or is the oil that's being extracted
Speaker 1: up there going to continue to be necessary and desired
Speaker 1: and purchased for a long time.
Speaker 2: I think if you ask the oil companies, they will
Speaker 2: say yes, for a couple of reasons. One is, generally
Speaker 2: they view oil's longevity in the local energy system as
Speaker 2: being longer than some others, particularly environmentalists would think, or
Speaker 2: like I think. The other thing is it comes back
Speaker 2: to that issue of incumbency. You know, a company like
Speaker 2: Conico can produce a barrel of oil from Alaska for
Speaker 2: thirty bucks or less. You know, the oil price right
Speaker 2: now is ninety bucks. So for them, they look at
Speaker 2: that it's in a politically stable part of the world,
Speaker 2: the US, And they say, okay, well, even if oil
Speaker 2: demand does peak and plateau and decline, who's going to
Speaker 2: be the last producer standing? Is it going to be
Speaker 2: US in Alaska or some high cost producer in some
Speaker 2: unstable part of the world.
Speaker 1: They can still do it profitably, so they'll still.
Speaker 2: Do it, that's right. And I think, you know, as
Speaker 2: President Biden's approval of the project earlier this year, the
Speaker 2: Willow Project, which was controversial, I think as even he
Speaker 2: recognized with his Green Agenda, you still need stable incumbent
Speaker 2: energy supplies to get you to the point where the
Speaker 2: new energy systems we're building now can take over.
Speaker 1: And as the US's own strategic reserve WANs as other
Speaker 1: wars are gang fought, what about the indigenous communities that
Speaker 1: are sort of caught in the crosshairs of either military
Speaker 1: incursions or commercial exploration. We'll talk about that more as
Speaker 1: we transition to the next segment. But what kind of
Speaker 1: fissures is that And raising.
Speaker 2: This in some ways was the most fascinating aspect of
Speaker 2: not just the energy feature, but also the fisheries feature.
Speaker 2: Is I think coming from the lower forty eight. We
Speaker 2: tend to have this rather outdated, almost colonial view of
Speaker 2: Alaska Natives as these subsistence fishers and hunters living off
Speaker 2: the land and entirely separated from you know what, we
Speaker 2: would call it westernized or industrialized economy, and that's really
Speaker 2: far from the truth. If you go to the North
Speaker 2: Slope where the ore production is. So the North Slope
Speaker 2: is an area, it's bigger than thirty nine states, it's
Speaker 2: only got about eleven thousand people living in it, which
Speaker 2: would feel about half a Madison Square garden. Ninety percent
Speaker 2: of their borough revenue comes from taxing oil production. Their
Speaker 2: whole lifestyle, everything from the fuel to running the snow
Speaker 2: machines they use to hunt or to fuel the boats
Speaker 2: they use to go fishing, the revenue to build housing,
Speaker 2: to run healthcare programs, it all comes from oil. And
Speaker 2: that's what makes the energy transition in a place like
Speaker 2: that particularly acute as an issue. They recognize that the
Speaker 2: warming climate is changing their physical environment. They recognize it's
Speaker 2: affecting the fish, it's affecting the caribou, but they also
Speaker 2: recognize that without that revenue, their way of life is
Speaker 2: pretty much over. They would probably have to evacuate a
Speaker 2: lot of those people if you switched off the oil
Speaker 2: revenue tomorrow. So it's just a very difficult tension that
Speaker 2: they have to deal with.
Speaker 1: We're going to dig into that deeper after the break
Speaker 1: and want to just stop for a moment. How to
Speaker 1: hear from one of our sponsors, and we'll come right back.
Speaker 1: We're back with William Denning, who's educating us about the Arctic.
Speaker 1: Liam we focused on the military and energy consideration shaping
Speaker 1: the new Arctic land rush. Let's now talk about fish.
Speaker 1: Why do fish figure so prominently in Alaska's economy and
Speaker 1: cultural identity.
Speaker 2: Well, you know what's really interesting is when we first
Speaker 2: conceived this project, fishing was something in the back of
Speaker 2: our mind, but it was not one of the topics
Speaker 2: we were really going to address up front. But as
Speaker 2: we did reporting on the other features, all sorts of
Speaker 2: people said, you've got to write about fish. Fishing is
Speaker 2: a big topic here. It's important to Alaska for a
Speaker 2: few reasons. One is it's just a very big industry.
Speaker 2: It's the biggest private sector employer in the state. It's
Speaker 2: the biggest coastal fishery in the US by a large margin.
Speaker 2: But also it's integral to the way of life, particularly
Speaker 2: in rural Alaska, particularly in Native villages, simply because they
Speaker 2: rely on fishing to eat, to live in some ways,
Speaker 2: to give meaning to their life and provide a sense.
Speaker 1: Of community, as they have for yards.
Speaker 2: For at least ten thousand years. And that really came
Speaker 2: home to me in a meeting with elders and village
Speaker 2: members in a little village called Quatlook in western Alaska,
Speaker 2: where one of the elder is a woman named Liz Dylan,
Speaker 2: quite simply and poignantly laid out the importance of fishing
Speaker 2: as told to her by her ancestors, by her elders
Speaker 2: back in the day.
Speaker 1: And you've got a clip of that, so let's have
Speaker 1: a quick listen.
Speaker 5: Our elders shoes to say, fish will be always living
Speaker 5: in the waters. They come once a year and they
Speaker 5: come back the next year. But the fish will be
Speaker 5: in the waters for us to catch and to eat
Speaker 5: and harvest, and they will never they will never disuppair
Speaker 5: until the end of the world.
Speaker 1: What are some of the mean species of fish that
Speaker 1: inhabit the waters around Alaska, because that's actually a factor
Speaker 1: in all of this.
Speaker 2: Right, absolutely, so, the big one economically is actually fished
Speaker 2: far out of sight of land in Alaska, and that's
Speaker 2: Alaskan pollock. Pollock is a sort of a codlike pretty
Speaker 2: low value but fairly an offensive white fish, which you'll
Speaker 2: find in things like McDonald's Phillia fish sandwiches. The other
Speaker 2: big I think more iconic species that people would tend
Speaker 2: to think of as king salmon, snow crab, king crab, halibut.
Speaker 2: These are the fish that you might buy in the
Speaker 2: supermarket anywhere in the US.
Speaker 1: So Alaska is essentially the fishery that feeds fish to
Speaker 1: the lower forty eight.
Speaker 2: States, absolutely, and Alaskan pollock is interesting partly because you
Speaker 2: will find it in things like school meals, that kind
Speaker 2: of thing where you need a relatively cheap fish protein
Speaker 2: just for sustenance. And the fisheries in Alaska are under
Speaker 2: stress right now too, right, That's right, and that's why
Speaker 2: so many people brought it up to us as we
Speaker 2: were doing our reporting. It's also big reason why Representative
Speaker 2: Mary Peltola was elected in twenty twenty two in an upset,
Speaker 2: you know, the first Democrat that Alaska had sent to
Speaker 2: the House in fifty years, the first Alaska Native representative. Ever,
Speaker 2: a big part of her platform was protecting the fisheries,
Speaker 2: and she was also a pro willow She was pro
Speaker 2: willow yes in part because she recognizes the importance of
Speaker 2: that revenue for native communities.
Speaker 1: So she's juggling these sort of tensions between one kind
Speaker 1: of economic development and another one that also can overshadow
Speaker 1: traditions and lifestyles and needs. That's right.
Speaker 2: I mean it gets to that issue around Alaska, which
Speaker 2: is I think, particularly in the lower forty eight, we
Speaker 2: tend to think of Alaska as a giant national park
Speaker 2: where you know, there's just polar bears roaming around and
Speaker 2: nothing really happens. But you get there and you realize that,
Speaker 2: you know, industrialization is a key feature of the Arctic economy,
Speaker 2: in the Alaskan economy, it's hard to separate those things
Speaker 2: out neatly.
Speaker 1: Talk to me about the tensions between local and indigenous
Speaker 1: fissures and big commercial operations. The troll, as you note
Speaker 1: in one of your pieces, and I quote catching and
Speaker 1: killing your own dinner, is one of the many things
Speaker 1: that set Alaska's apart from the residents of most other states.
Speaker 2: Absolutely. So you know, when you go to these villages
Speaker 2: This comes home to you just on the plane we
Speaker 2: flew from Anchorage out to Bethel, which is the hub
Speaker 2: of the Yukon cousco Quim Delta in western Alaska, and
Speaker 2: on the plane there's more boxes of groceries than there
Speaker 2: are suitcases. Because it costs a hell of a lot
Speaker 2: to live out in western Alaska. I paid a visit
Speaker 2: to the supermarket one day, and you can be paying
Speaker 2: fifteen dollars for a lot for bread, ten dollars for
Speaker 2: a quarter of milk, eighty dollars for a box of diapers.
Speaker 2: Living there without living off the land is frankly impossible.
Speaker 2: So as we've seen in the past, beginning about a
Speaker 2: decade ago, when regulators come into these villages and say
Speaker 2: the salmon run is very low this year, you're going
Speaker 2: to have to stop fishing for a couple of weeks,
Speaker 2: a month, a whole season. It's an existential threat. It's
Speaker 2: not just oh my hobby got blocked off for the summer.
Speaker 2: What am I going to do now? This is people
Speaker 2: who fish the dinner literally out of their backyards and
Speaker 2: then smoke it, store it up for the winter to
Speaker 2: get them through those months. And if that is taken away,
Speaker 2: they lose a sense of food security, they lose importantly
Speaker 2: a sense of food sovereignty and that idea of controlling
Speaker 2: their own destiny. I think it's particularly important in these
Speaker 2: alaskaative communities, and they lose a sense of community. You know,
Speaker 2: you travel along the cosco Quin River and all along
Speaker 2: the banks, you see these fish camps, and it's where
Speaker 2: families and neighbors gathered sometimes for weeks on end during
Speaker 2: the summer to fish and process the fish that they
Speaker 2: would need to get them through that.
Speaker 1: And now are those communities evaporating as commercial fishing continues
Speaker 1: to sprawl.
Speaker 2: The impression I get is that physically their landscape is
Speaker 2: kind of crumbling into the rivers and the oceans.
Speaker 1: That is happening because of global warming, because.
Speaker 2: Of climate change, absolutely, and climate change is also having
Speaker 2: an impact on the fish. It's a controversial topic exactly
Speaker 2: how much it's having an impact, but you can see
Speaker 2: how in a delicate ecological web that changes in water
Speaker 2: temperature can affect not just salmon themselves, which are the
Speaker 2: fish they prize, but also the fish that the salmon
Speaker 2: feed on, and that can have all sorts of cascading effects.
Speaker 2: But you also see in just the encroachment of the
Speaker 2: outside world. One woman I spoke with at a village meeting,
Speaker 2: she was very upset about the impact on fishing, but
Speaker 2: you also got a sense that she was worried about
Speaker 2: the young people in their village losing their connection to
Speaker 2: the land and playing video games instead and not learning
Speaker 2: how to subsist. And I think in some ways that's
Speaker 2: the thing that's really gutting these communities. It's that sense
Speaker 2: that they're breaking decisively from their past.
Speaker 1: And how do the large commercial fisheries see all of this.
Speaker 2: I think the sense you get from the commercial fisheries
Speaker 2: is that Alaska pollock is a giant money maker. It
Speaker 2: is the second biggest wild fishery on the planet, and
Speaker 2: that they are providing an important source of protein for
Speaker 2: a world in which demand for fishes going up. But
Speaker 2: essentially wildfishing peaked in the nineteen nineties. A lot of
Speaker 2: the growth we've seen since then is farmed fish, and
Speaker 2: that really the issue is climate change. It's not really
Speaker 2: their issue. They're not the ones who are, you know,
Speaker 2: fishing out the salmon runs from western Alaska, and that
Speaker 2: it's kind of up to society to address climate change,
Speaker 2: not then, So.
Speaker 1: As you noted at the top, you and I began
Speaker 1: talking about this as a project for you about five
Speaker 1: years ago or so. And you've looked at the military,
Speaker 1: You've looked at the energy exploration, You've looked at the
Speaker 1: local communities and fisheries. What have you learned over the
Speaker 1: course of your reporting that you didn't know before you
Speaker 1: set out to do this? What are some of the
Speaker 1: big AHAs for you?
Speaker 2: The biggest AHA for me is that the Arctic is
Speaker 2: a and this may sound a little weird, is a
Speaker 2: complex human society. Because, as I say, like it doesn't
Speaker 2: sound weird like many in the Lower forty eight. I
Speaker 2: thought of the Arctic in kind of symbols and images,
Speaker 2: you know, frozen landscapes, polar bear as, the odd oil rig,
Speaker 2: that sort of thing. But you get there and you realize,
Speaker 2: you know, there are nations living there. They live complex lives,
Speaker 2: and they're just as fragmented as we are in the
Speaker 2: Lower forty eight. For example, with the fishing issue, there
Speaker 2: are these things called community development quotas, so sixty five
Speaker 2: coastal villages actually get a portion of revenue from the
Speaker 2: pollock troll. Now they don't want to see the pollock
Speaker 2: troll ending, but their neighbors just up river who don't
Speaker 2: get that money are complaining that those trollers are fishing
Speaker 2: them out, destroying their way of life. And similarly with
Speaker 2: the oil.
Speaker 1: Are those differences because of the way the various populations
Speaker 1: were expropriated when outsiders came in, where there's just different
Speaker 1: deals cut in order to give commercial interest access to
Speaker 1: the land when indigenous peoples were appropriated.
Speaker 2: I think there is a long history of that, you know,
Speaker 2: and it goes back to the Alaska Native Claimed Settlement
Speaker 2: Act in nine in seventy one, and then the Magnus
Speaker 2: and Stephens Fisheries Act of nineteen seventy six. There have
Speaker 2: been various attempts to square the circle in Alaska of
Speaker 2: balancing indigenous rights with the desire, particularly from the outside
Speaker 2: to exploit Alaska's rich resources, and with the community development
Speaker 2: quotas in particular. I think in some ways that came
Speaker 2: from a good place. It was a sense that these
Speaker 2: native villages should be getting some portion of the revenue
Speaker 2: from the waters off the coast, But it also cleaved
Speaker 2: them from some of their neighbors. And you see this
Speaker 2: also in land division. You know, one of the villages.
Speaker 2: I went to a place called Quagillingock, which means place
Speaker 2: of no river, which is sort of ironic because it's
Speaker 2: sinking into the water. They are, as we speak, trying
Speaker 2: to work out how they can buy parcels of land
Speaker 2: further away to eventually move that village to higher ground
Speaker 2: because they know it's daser kind of numbered.
Speaker 1: So before we wrap up any other things you've learned.
Speaker 2: I would go back to this idea of the imagined
Speaker 2: narrative that Alaska and the wider Arctic is an area
Speaker 2: that I think is in some ways fixed in our mind,
Speaker 2: but it's also a place where we project narratives. China
Speaker 2: is projecting a narrative of becoming a great power. The
Speaker 2: US is projecting a narrative of being suddenly beset by enemies.
Speaker 2: Russia is projecting a narrative that even as its armed
Speaker 2: forces are chewed up in Ukraine, it's going to emerge
Speaker 2: as a powerful Arctic nation. All these things are clashing,
Speaker 2: and the people who live there are frankly caught in
Speaker 2: the middle.
Speaker 1: Liam, thank you for wrapping things up for us. We're
Speaker 1: out of time. Thanks for joining us today.
Speaker 2: Thank you.
Speaker 1: William Denning is a calumnist with Bloomberg Opinion. You can
Speaker 1: find his work at the Bloomberg Opinion website and on
Speaker 1: the Bloomberg Terminal. You can find Liam himself on Twitter
Speaker 1: at Denning Here at crash Course, we believe that collisions
Speaker 1: can be messy, impressive, challenging, surprising, and always instructive. In
Speaker 1: today's Crash Course, I learned that the title that I
Speaker 1: gave to this episode, the Race to Control the Arctic,
Speaker 1: actually might not be the right title given everything that
Speaker 1: Liam just told me. What's going on for both commercial operators,
Speaker 1: the military, and everyone else up in Alaska is a long, cold,
Speaker 1: challenging slog. What did you learn? We'd love to hear
Speaker 1: from you. You can tweet at the Bloomberg Opinion handle
Speaker 1: at Opinion or me at Tim O'Brien using the hashtag
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Speaker 1: It helps more people find the show. This episode was
Speaker 1: produced by the indispensable Ona masurakas Moses on Dom and Me.
Speaker 1: Our supervising producer is Magnus Hendrickson, and we had editing
Speaker 1: help from Sagebauman. Jeff Grocott, Mike Nize and Christine Danden
Speaker 1: Bylark Blake. Maple says, our sound engineering and our original
Speaker 1: theme song was composed by Luis Gara. I'm Tim O'Brien.
Speaker 1: We'll be back next week with another Crash course