Polar Race: The Scramble for Arctic Resources is On

The United States is falling behind in race for Arctic assets



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"It's a real time problem for the people of the Arctic. We don't control it, and we are late to the table. When I look at the Arctic strategically, I see a host of decisions that need to be made today," said Rear Adm. Thomas Ostebo, commander of the 17th District of the Coast Guard.

"We are leaning forward operationally. But on a tactical level, I lose a lot of sleep," he added.

The number of ships moving through the Arctic waters in his district on this day in August was more than 95, a tripling of sea traffic compared to last year.

"It is spinning a little bit out of control," he said.

Part of the problem, he said, is that "the U.S. has to look at the Arctic not as a cost sink, but an investment."

"Ready or not, America, here comes the Arctic," he said.

Beyond its lack of preparedness, many international observers believe the United States is also failing to understand the importance of establishing itself in a leadership role in the international community and the international law that is emerging in the Arctic.

The United States is one of the only industrialized countries in the world that is not a signatory to the Law of the Sea Treaty.

The resistance to signing the treaty, which observers say is largely pushed by a small, far-right group of Republican skeptics of all international treaties and which has also suffered from indifference by Democrats, has become a prominent example of the political dysfunction in Washington, D.C. It has been brought before the Senate for hearings, amendments have been made, but for nearly 20 years, it has foundered in Congress. This despite the fact that it is supported by a coalition of the military, including the commandant of the U.S. Coast Guard, business interests, including leaders in oil and shipping, and a host of environmental lobbyists.

Chairman of the Senate Foreign Relations Committee, Sen. John Kerry, has led the effort to support the treaty and has vowed to bring ratification to a vote after the heated, partisan politics of the presidential election.

"Many investors will be uncertain about investment here until the Law of the Sea Treaty is ratified," said David Rubenstein, co-founder of The Carlyle Group, a powerful investment firm stacked with leaders of government and military.

Rubenstein believes the Arctic is one of "the last emerging markets" in the world. But he said the United States is thwarted by the lack of a strategy in Washington, D.C., to develop the Arctic.

Scott Minerd, chief investment officer at Guggenheim Partners, one of the largest private investment firms in the United States, said, "It's already true that we are falling dramatically behind. ... Someone needs to start articulating that there is a crisis in the Arctic."

For some of these critics, Washington, D.C., bureaucrats are the enemy. David Hayes, deputy secretary of the U.S. Department of the Interior, is aware of that. But he has worked tirelessly for years within the behemoth of Interior, which has a sprawling mandate that includes managing more than 200 million acres of Alaska, about half the state. He conceded that federal officials had been "tripping over each other" in Alaska for a long time, but he also countered that the department has to balance the environmental issues with business interests.

"We must balance conservation and development," he said.


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