1AC – Leasing - AHS K ₂

1AC – Arctic AdvantageScenario 1 is Arctic Conflict

Arctic conflict is inevitable—competition for resources and arctic thaw—climate change magnifies the threatRT 3-15 [RT, previously known as Russia Today, is an international multilingual Russian-based television network, Climate change may cause conflict in Arctic, threats to security worldwide – former US generals, May 15, 2014, http://rt.com/usa/159036-climate-change-military-generals/]

Climate Change= new resources and lanes opening up Competition for resources is a threat multiplier

Global climate change represents a serious and growing threat to world security, and may be a catalyst for conflict in the resources-rich Arctic region as the ice shield shrinks , a group of retired top US military officers say in a new report. The Center for Naval Analyses (CNA) Military Advisory Board says in the report – titled 'National Security and the Accelerating

Risks of Climate Change' – that melting sea ice in the Arctic will open shipping lanes for energy exploration,

setting off public and private competition for untapped reserves that lie beneath the historically forbidden region. “ Things are accelerating in the Arctic faster than we had looked at ," said General Paul Kern, chairman of

the CNA military advisory board. “The changes there appear to be much more radical than we envisaged.” Russia and China will especially vie for access to oil and other natural resources , the report states. “As the Arctic becomes less of an ice-contaminated area it represents a lot of opportunities for Russia,” Kern said, adding that

budding conflict there is accelerating “faster than we had looked at seven years ago.” As a new era of resource-pilfering begins in the Arctic, a separate study recently released says that public and private entities are not at all prepared for an oil spill in the region. Approximately 30 percent of the world’s undiscovered natural gas and about 15 percent of its untapped oil lies in the Arctic. But the majority, 84 percent, of the estimated 90 billion barrels of oil and 47.3 trillion cubic meters of gas remain offshore. The CNA report echoes a

recent cascade of studies and official reports that declare, more unequivocally than ever before, that global climate change poses vast, complex security risks, especially given the inevitable competition for resources amid rapid population growth. But the retired generals went a step further, calling climate change a “threat multiplier” to a “conflict catalyst.” Last week, US Defense Department Secretary Chuck Hagel acknowledged that the opening of sea

lanes in the Arctic could very well lead to friction among competing nations. "The melting of gigantic ice caps presents possibilities for the opening of new sea lanes and the exploration for natural resources, energy and commerce, also with the dangerous potential for conflict in the Arctic," Hagel said at the Chicago Council on Global

Affairs. For its part, Russia, a leader in Arctic advances, recently approved a state-run program aimed at encouraging “socio-economic development” in the region. Outside of the Arctic, the CNA report warned that climate

change will cause or exacerbate regional and ethnic conflicts over food and water in the developing world. “In Africa, Asia, and the Middle East, we are already seeing how the impacts of extreme weather, such as prolonged drought and flooding –

and resulting food shortages, desertification, population dislocation and mass migration, and sea level rise – are posing security challenges to these regions’ governments. We see these trends growing and accelerating," the report says.

According to the authors, rising sea levels will put people and food supplies at risk in vulnerable coastal regions such as eastern India, Bangladesh, and the Mekong Delta in Vietnam. “Populations will likely become disenfranchised and even more vulnerable to extremists and revolutionary influences,” the report states. In

addition, climate change impacts around the world will create more need for American troops, the report says,

despite likely damage to naval ports and military bases amid flooding and worsening weather. Just in the last week, researchers have said that the melting of the Antarctic ice sheet and a three-meter sea-level rise is inevitable, and that increased levels of carbon dioxide emissions related to a warming planet will weaken nutrition levels in some of the world’s staple foods like corn and wheat. Last week, the Obama administration’s National Climate Assessment stated that the various effects of global warming in the United States – among them more flooding and longer droughts – "are expected to become increasingly disruptive across the nation throughout this century and

beyond.” The Pentagon has long considered climate change a major security menace. In March, the Defense Department again stressed threats to global stability and American hegemony posed by climate change in

its latest Quadrennial Defense Review, declaring that an erratic climate will likely cause increased “terrorist activity,” among other impacts.

Lack of infrastructure and commitment locks the U.S. out of the arctic and undermines arctic leadership- other countries are increasing presence nowReichmann 1-1 [Deb Reichmann, Associated Press contributor, U.S. lags behind arctic nations in race to stake claims to untapped resources, January 1, 2014, http://www.pbs.org/newshour/rundown/us-lags-behind-arctic-nations-in-race-to-stake-claims-to-untapped-resources/]

No infrastructure or FUNDING COMMITMENTS

No commercial activity is happening there due to these situations

Countries are scrambling to stake claim to untapped resources, previously frozen in the Arctic. But with a lack of basic infrastructure and funding commitments , critics say the U.S. trails other countries in preparations for the increased activity in the north . Video still by PBS NewsHour WASHINGTON — The U.S. is racing to keep pace with stepped-up activity in the once sleepy Arctic frontier, but it is far from being in the lead. Nations across the world are hurrying to stake claims to the Arctic’s resources, which might be home to 13 percent of the world’s undiscovered oil and 30 percent of its untapped natural gas. There are emerging fisheries and hidden minerals. Cruise liners filled with tourists are sailing the Arctic’s frigid waters in increasing numbers. Cargo traffic along the Northern Sea Route, one of two shortcuts across the top of the Earth in summer, is on the rise. The U.S., which takes over the two-year rotating chairmanship of the eight-nation Arctic Council in 2015, has not

ignored the Arctic, but critics say the U.S. is lagging behind the other seven: Russia, Norway, Sweden, Finland, Iceland, Canada and

Denmark, through the semiautonomous territory of Greenland. “On par with the other Arctic nations, we are behind — behind in our thinking, behind in our vision,” Sen. Lisa Murkowski, R-Alaska, said. “We lack basic infrastructure, basic funding commitments to be prepared for the level of activity expected in the Arctic .” At a meeting before Thanksgiving with Secretary of State John Kerry, Murkowski suggested he name a U.S. ambassador or envoy to the Arctic — someone who could coordinate work on the Arctic being done by more than 20 federal agencies and take the lead on increasing U.S. activities in the region.

Murkowski is trying to get Americans to stop thinking that the Arctic is just Alaska’s problem. “People in Iowa and New Hampshire need to view the U.S. as an Arctic nation. Otherwise when you talk about funding, you’re never going to get there,” Murkowski said. She added that even non-Arctic nations are deeply engaged: “India and China are investing in

icebreakers.” The U.S. has three aging icebreakers. The melting Arctic also is creating a new front of U.S. security concerns. Earlier this month, Russian President Vladimir Putin said expanding Russia’s military presence in the Arctic was a top priority for his nation’s armed forces. Russia this year began rehabilitating a Soviet-era base at the New Siberian Islands and has pledged to restore a number of Arctic military air bases that fell into neglect after the 1991 collapse of the Soviet Union. Putin said he doesn’t envision a conflict between Russia and the United States, both of which have called for keeping the Arctic a peaceful zone. But he

added, “Experts know quite well that it takes U.S. missiles 15 to 16 minutes to reach Moscow from the Barents Sea,” which is a part of the Arctic Ocean near Russia’s shore. While the threat of militarization remains, the battle right now is on the economic level as countries vie for oil, gas and other minerals, including rare earth metals used to make high-tech products like cellphones. There also are disputes bubbling up with environmental groups that oppose energy exploration in the region; Russia arrested 30 crew members of a Greenpeace ship in September after a protest in the Arctic. China signed a free trade agreement with tiny Iceland this year, a signal that the Asian powerhouse is keenly interested in the Arctic’s resources. And Russia is hoping that the Northern Sea Route, where traffic jumped to 71 vessels this year from four in 2010, someday could be a transpolar route that could rival the Suez Canal. In the U.S., the Obama administration is consulting with governmental, business, industry and environmental officials, as well as the state of Alaska, to develop a plan to implement the U.S. strategy for the Arctic that President Barack Obama unveiled seven months ago. Defense Secretary Chuck Hagel rolled out the Pentagon’s Arctic blueprint last month, joining the Coast Guard and other government agencies that have outlined their plans for the region. There are no cost or budget estimates yet, but the Navy is laying out what the U.S. needs to increase communications, harden ships and negotiate international agreements so nations will be able to track traffic in the Arctic and conduct search and rescue operations. Critics, however, say the U.S. needs to back the strategy papers with more precise plans — plus

funding. With the country still paying for two wars, the idea of spending money in an area considered a low security threat makes the Arctic an even tougher sell. “The problem with all of these strategies is that they are absolutely silent on budget issues,” said Heather Conley, an expert on the Arctic at the Center for Strategic and International Studies. “How do we meet these new challenges? Well, we’re going to have to put more resources to them. It’s dark. It’s cold. There’s terrible weather. We need to enhance our own satellite communications and awareness in the area as ships and commercial activity increases in the Arctic.” The U.S. needs helicopters, runways, port facilities and roads in the Arctic, she said – not to mention better accommodations in small coastal towns that have a shortage of beds and would be ill-equipped to handle an influx of tourists from a disabled cruise ship. With few assets, the U.S. might be forced to borrow

from the private sector. “When Shell drilled two summers ago in the Chukchi Sea and the Beaufort Sea, they had 33 vessels and the Coast Guard

had one national security cutter,” Conley said. “We’re not prepared . It may be another 10 years. The Arctic is not going to wait, and the increased commercial and human activity is already there. Other Arctic states are preparing more robustly, and we are choosing not to.” The Obama administration defends its work on the Arctic, saying it is preparing for the rapid changes coming in the far north. “Each Arctic government, including the United States government, has developed an Arctic strategy, and the administration expects to release an implementation plan for our Arctic strategy in the coming months,” State Department spokeswoman

Jen Psaki said. “We recognize that preparing for increasing human activity in the Arctic will require investment in the region, and we hope to be able to say more on this in the future.” Malte Humpert with the Washington-based Arctic Institute says that when the implementation plan is completed, he’s going to be looking for specifics – timelines, budget numbers, plans for new infrastructure. “There’s a lot of good, shiny policy and good ideas about how to move forward, and now it’s about finding money,” he said. “And that’s where the U.S. is really far behind.” The funding battle often focuses on icebreakers. The Coast Guard has three: the medium-duty Healy, which is used mostly for scientific expeditions, and two heavy icebreakers, the Polar Sea and Polar Star. Both heavy icebreakers were built in the 1970s and are past their 30-year service lives. The Polar Star, however, was recently given a $57 million overhaul, was tested in the Arctic this summer and currently is deployed in Antarctica. About $8 million has been allocated to study the possibility of building a new icebreaker, which would take nearly a decade and cost more than $1 billion. In the meantime, lawmakers from Washington and

Alaska want Congress to rehabilitate the Polar Sea too. “A half-century after racing the Russians to the moon, the U.S. is barely suiting up in the international race to secure interests in the Arctic. Russia, Canada and other nations are investing heavily ,” Rep. Rick Larsen, D-Wash., wrote in an op-ed published earlier this month. “We are behind and falling farther back.”

The plan is key to solve - a) US leadership creates a stable framework of development that prevents conflict

– the alternative is Russian control which ensures crisesSlayton and Rosen, 3/14 (David, a research fellow at the Hoover Institution and co-chair of the Hoover Institution's Arctic Security Initiative, Mark, an international and national security lawyer by training, is a senior legal adviser at CNA Corporation, “Another region where the Russian military threatens to dominate the U.S.”, 3/14/14, http://www.cnn.com/2014/03/14/opinion/slayton-rosen-russia-u-s-arctic/index.html)

Comparatively better than Russian control Allies would listen to us over Russia

While much of the world is focused on the Russian incursion into the Crimean Peninsula of Ukraine, another long-term move may allow the former Soviet navy to dominate U.S. interests to the north: the Arctic. The rapid melting of the Arctic

Ocean is quickly creating a new variety of challenges that have the potential to cause significant global damage if they remain unaddressed. The Obama administration's policy correctly recognizes that the United States has profoundly important economic and cultural interests in the Arctic but regrettably reveals very little about what the federal government will be doing outside of the science field. While recent U.S. policies either dance around the core issues, or worse, do not

acknowledge that they exist, the Russians are taking the lead on Arctic policy . After all, the Arctic is in their backyard, too.

Moreover, Russia -- as if to highlight the value they place on their navy and renaissance as a maritime nation -- took control of the strategic Crimean Peninsula, assuring and securing warm water Russian Navy access to the global commons. In light of these recent events, it would be wise for Washington to seriously consider the economic potential and security vulnerabilities that exist on or near the U.S. Arctic coastline. Overwhelmingly, the U.S. Arctic policy debate echoes past concerns of the Arctic National Wildlife Refuge. Consequently, many in the policy community are pushing a heavy science and no-development agenda to preserve the pristine character of the region. The recently issued Department of Defense Arctic Strategy is a case in point: It talks extensively about the DOD scientific mission and uses the terms "sustainable

development" and preservation of the unspoiled area as important national goals. But just saying "no" ignores the fact that the precious Arctic mineral and oil and gas resources will help assure the United States is able, over time, to

achieve and then maintain its energy independence . Voices on the Ukraine/Crimea referendum King: 'I stand with the President' Many average Russians support Putin Science is incredibly important, as is safe and responsible development of the Arctic, but our

agencies and scientists need to approach these issues with a greater sense of urgency. Arguably, the science needs to be a component of a detailed national action, but that's only a fraction of good U.S. policy. U.S. Arctic policy should prioritize four things: One: Demonstrate leadership in the Arctic and develop a strategy and policy to match. The U.S. has no leadership in the high north and Russia does, which is a great concern for our allies. Two: Invest in infrastructure, Navy and Coast Guard to support U.S. security and commercial interests in the Arctic. The key here is to develop the policy that drives those requirements so we are not "late to need." Three: Demonstrate leadership in the maritime domain worldwide -- and not retreat as we

are doing by default in the Arctic. Four: Facilitate and further develop offshore natural resources in the high north/Alaska and the national, international, maritime and geopolitical governance structures that will underpin those enterprises. Washington, in less than two years, will assume a leadership role when it becomes Chair for the Arctic Council. Unfortunately, the DOD policy and U.S. Navy Arctic Roadmap 2014 do not articulate what the U.S. Arctic leadership agenda will entail. The reality is ignoring the issues and choosing not to participate in the Arctic will not make the issues go away. Yes, budgets are challenging, but the Arctic is no different from any other international

frontier or global common where the U.S. has interests. We need to protect it and demonstrate leadership in the maritime domain -- not retreat. So, too, our policy makers need to be looking beyond our shores to Moscow, Ottawa, Oslo, Copenhagen, the

Arctic Council, international oil companies and Lloyds of London for help in solving this governance challenge. The last thing that any of the Arctic states can afford is to back into a Russian-generated crisis with no resources or a plan. The time is now for more U.S. leadership to ensure the Arctic becomes a safe, secure and prosperous region in which to live and work.

b) And, the plan is key to establish critical infrastructure in the region- cements U.S. leadership and prevents environment collapseIsted ’09 (Kathryn, writes for the Journal of Translational Law & Policy, “Sovereignty In the Arctic: An Analysis of Territorial Disputes & Environmental Policy Considerations”, Spring 2008, http://www.law.fsu.edu/journals/transnational/vol18_2/isted.pdf, Accessed: 7/10, SD)

Help the environment which helps our leadership More presence leads to more expertise and thus leadership

Increased offshore drilling will in turn increase navigation in ¶ the Arctic. Not only will increased navigation in the Arctic result ¶ from transporting oil, but also from the transporting of other cargo ¶ due to the warming climate opening sea lanes. If the vessel carries ¶ oil or gas, it also carries the threat of a potentially devastating oil ¶

spill.234 Irrespective of oil spills, increased navigation brings its ¶ own environmental concerns, such as increased pollution from the ¶ vessel’s waste products and the risk of ballast water introducing foreign marine species into the delicate Arctic ecosystem. Furthermore, if the seal lane traverses an area of heightened concern for particular species, then the mere presence of a ship can be environmentally detrimental. Therefore,

increased navigation is a crucial environmental issue in the Arctic. Overall, the Arctic currently faces significant environmental challenges, which are only likely to increase in the future. The gravity of the climate change in the Arctic alone warrants the attention of policymakers. The Arctic is undergoing a monumental change that has the potential to devastate its entire ecosystem . The melting sea ice is only the beginning of environmental

concerns in the Arctic. As access becomes available, economic activity will increase exponentially, specifically an increase in fishing, offshore drilling , and navigation. These practices bring the threat of oil spills and other significant environmental consequences.

Therefore, in developing a legal regime in the Arctic, the environmental impacts of climate change and increased economic activity must be primary considerations.

c) US leadership is key to Arctic Council governance – the existing governance structure is too fragmented – only the plan’s reforms strengthens oil spill preventionEbinger et al, 14 (Charles, a senior fellow and director of the Energy Security Initiative at Brookings, “Offshore Oil and Gas Governance in the Arctic A Leadership Role for the U.S.”, March 2014, http://www.brookings.edu/~/media/Research/Files/Reports/2014/03/offshore%20oil%20gas%20governance%20arctic/Offshore%20Oil%20and%20Gas%20Governance%20web.pdf)

There is consensus that the U.S. government should elevate the Arctic as a priority national interest. The changing Arctic is outpacing the government’s current policy and institutional structure to deal with it. As

a former U.S. Department ¶ of State official stated, “The U.S. government needs to understand the ‘need for speed’ in molding its ¶ Arctic policy.” This requires a shift from viewing the Arctic primarily as a security threat in a strictly military and

geopolitical sense, to focusing on a ¶ safety threat in the Arctic in the context of climate ¶ change , sustainability of

indigenous communities, ¶ and protection of the environment. The existing governance framework for offshore oil and gas activities in the Arctic region needs to be strengthened, especially in the area of oil spill prevention, containment, and response. Given ¶ large distances, severe climate conditions, the pristine nature of the Arctic, and the potential for oil ¶ pollution to affect more than one national jurisdiction, a critical part of strengthening governance ¶ is oil spill prevention , containment and response. ¶ There is growing awareness and criticism that

the ¶ current, multilayered framework is too fragmented and is not tailored to the unique conditions ¶ of the Arctic marine environment. Specifically, ¶ while the coastal states implement and oversee ¶ the most targeted and legally binding governance instruments for offshore operations, national ¶ laws and regulations in place vary in their

overall ¶ systematic approach and ability to enforce them. ¶ There is also concern that current regulations are ¶ not sufficiently Arctic-specific or Arctic-tested ¶ to address operations taking place in more ice-covered regions. Perhaps more important than ¶ the development and implementation of standards, however, is ensuring that they are supported by equipment and infrastructure-sharing ¶ arrangements that allow timely and appropriate ¶ preparedness and response. For example, while a ¶ legally binding Arctic Oil Pollution Agreement has ¶ been signed by all Arctic states, it is difficult to ¶ implement without physical infrastructure and ¶ equipment in place.

The most effective governance strengthening approach is to build-on the existing regulatory framework . A new, Arctic-wide, legally binding ¶ legal instrument addressing offshore oil and gas, ¶ and accompanying

institutional structures, is not ¶ feasible in the near-term. First, it is a top-down ¶ approach that , since it involves so many

sovereign ¶ and other interests, could be unwieldy and take ¶ many years to enact similar to the experience with ¶ the Polar

Code. Second, such a high-level, consensus-driven process—with sovereign interests ¶ at stake and differing conditions

throughout the ¶ Arctic—could result in weak , watered down regulations in a “regulatory race to the bottom.” Third, the prospect of developing a new legal architecture ¶ has already been addressed by the Ilulissat Declaration in which five Arctic states explicitly recognize the adequacy of the existing legal framework. Fourth, attempting to craft a new ¶

legal framework could overwhelm other more useful and effective efforts in the short-term.165 The Arctic Council should be strengthened to play a stronger role in enhancing offshore oil and gas governance , but its current mandate and ¶ legal character should not be changed. The Arctic ¶ Council works and thus any governance approach ¶ should build on it. It has been an invaluable institution in raising awareness of the importance ¶ of the Arctic , especially in elevating the voice of ¶ indigenous peoples throughout the region, and it ¶ should continue to play a key role in enhancing oil ¶ and gas governance. We do not support changing ¶ the Arctic Council’s

fundamental mandate, including proposals for making it a legal entity with ¶ treaty powers. In sum, the Arctic Council should ¶

remain a policy-shaping body, and not become a ¶ policy-making entity. Dramatically changing its ¶

mandate, structure, and character may ruin its ¶ value. Nevertheless, the Council should be imbued with enhanced

internal structural and ¶ process changes that prioritize ¶ and elevate oil and gas issues ¶ allowing for a more structured ¶

and effective convening of all ¶ relevant actors to move the ¶ strengthening of the offshore ¶ oil and gas governance regime forward.

d) Arctic Council is k2 sustainable development Neill 9/16/14 [Peter Neill, Director of World Ocean Observatory, “The Arctic Council: A Model for Sustainable Development?”, http://www.huffingtonpost.com/peter-neill/the-arctic-council-a-mode_b_5829860.html?utm_hp_ref=green, PS]

In 1996, through an international declaration formulated in Ottawa, Canada, The Arctic Council was formally established as a high level intergovernmental forum "to provide a means for promoting cooperation, coordination and interaction among the Arctic States , with the involvement of the Arctic Indigenous communities and other Arctic inhabitants on common Arctic issues, in particular issues of sustainable development and environmental protection in the Arctic." The participating Arctic Council Member States are Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, the Russian Federation, Sweden, and the United States of America, each of which contributes US $58,000 per year toward a Secretariat budget. As the Council evolved, two new related non-voting categories emerged: Permanent Participants--United Nations organizations and programs and other governmental agencies with Arctic interests--and Observers--various non-governmental organizations with comparable concerns. The Council has five areas of designated interest: Environment and Climate, including climate change and environmental protection; Biodiversity, including an Arctic Biodiversity Assessment and a Circumpolar Biodiversity Monitoring Program; Oceans, including search and rescue; Arctic Ocean Review, emergency preparedness, marine environment,

shipping, oil and gas; and Arctic People, including health and well-being, indigenous people needs today, and languages and culture. What is interesting about this of course is the integrated activities that balance needs and demands, plan for outcomes and consequences, and address the sustainability requirements of the ecosystem and the people that live there. The activities are structured so that no single demand of any single interest can be imposed at the expense or deterioration of another. The Secretariat for the Council is based in Tromsø, Norway, and is charged with managing the activities, organizing the various meetings, producing reports, and executing an annual work-plan that is

determined by the council members. One can look at this as a structure designed to protect vested national interests, not unite them, to defend resources, not exploit them responsibly, to control the local citizens , rather than assimilate their needs and values. One can also look upon this as a model structure of governance , based on common interest, sustainability, and community integration . Time will tell if this will create a new mode of international government, corporate, and social behavior, more cooperative than competitive, more planned than unregulated, more progressive and protective than regressive and destructive. Such a demonstration of new conduct might well demonstrate how even on land where old conduct has done its worst we might change our ways for the better.

Arctic conflict goes nuclearWallace & Staples 10 Michael Wallace is Professor Emeritus at the University of British Columbia; Steven Staples is President of the Rideau Institute in Ottawa, March 2010, “Ridding the Arctic of Nuclear Weapons A Task Long Overdue”, http://www.arcticsecurity.org/docs/arctic-nuclear-report-web.pdf

2 nuclear states in Artic that have 95% of nuclear weapons

The fact is, the Arctic is becoming a zone of increased military competition . Russian President Medvedev has announced the creation of a special military force to defend Arctic claims. Last year Russian General Vladimir Shamanov declared that Russian troops would step up training for Arctic combat, and that Russia’s submarine fleet would increase its “operational radius.” Recently, two Russian attack submarines were spotted off the U.S. east coast for the first time in 15 years. In January 2009, on the eve of Obama’s inauguration, President Bush issued a National Security Presidential Directive on Arctic Regional Policy. It affirmed as a priority the preservation of U.S. military vessel and aircraft mobility and transit throughout the Arctic, including the Northwest Passage, and foresaw greater capabilities to protect

U.S. borders in the Arctic. The Bush administration’s disastrous eight years in office, particularly its decision to withdraw from the ABM treaty and deploy missile defence interceptors and a radar station in Eastern Europe, have greatly contributed to the instability we are seeing today, even though the Obama administration has scaled back the planned deployments. The Arctic has figured in this renewed interest in Cold War weapons systems, particularly the upgrading of the Thule Ballistic Missile Early Warning System radar in Northern Greenland for ballistic missile defence. The Canadian government, as well, has put forward new military capabilities to protect Canadian sovereignty claims in the Arctic, including proposed ice-capable ships, a northern military training base and a deep-water port. Earlier this year Denmark released an all-party defence position paper that suggests the country should create a dedicated Arctic military contingent that draws on army, navy and air force assets with shipbased helicopters able to drop troops anywhere. Danish fighter planes would be tasked to patrol Greenlandic airspace. Last year Norway chose to buy 48 Lockheed Martin F-35 fighter jets, partly because of their suitability for Arctic patrols. In March, that country held a major Arctic military practice involving 7,000 soldiers from 13 countries in which a fictional country called Northland seized offshore oil rigs. The manoeuvres prompted a protest from Russia – which objected again in June after Sweden held its largest northern military exercise since the end of the Second World War. About 12,000 troops, 50 aircraft and several warships were involved. Jayantha Dhanapala, President of Pugwash and former UN under-secretary for disarmament affairs,

summarized the situation bluntly: “From those in the international peace and security sector, deep concerns are

being expressed over the fact that two nuclear weapon states – the U nited States and the Russian Federation,

which together own 95 per cent of the nuclear weapons in the world – converge on the Arctic and have competing claims. These claims , together with those of other allied NATO countries – Canada, Denmark, Iceland,

and Norway – could , if unresolved, lead to conflict escalating into the threat or use of nuclear weapons .”

Many will no doubt argue that this is excessively alarmist, but no circumstance in which nuclear powers find themselves in military confrontation can be taken lightly. The current geo-political threat level is nebulous and low – for now, according to Rob

Huebert of the University of Calgary, “[the] issue is the uncertainty as Arctic states and non-Arctic states begin to recognize the geo-political/economic significance of the Arctic because of climate change.”

Scenario 2 is Spills

Status quo Russian drilling ensures massive spillsHeath 12 Julia Heath is a writer for Foreign Policy in Focus, February 15, 2012, “Preventing a Blowout in the Arctic”, http://www.fpif.org/articles/preventing_a_blowout_in_the_arctic

Russia will drill inev- need energy resources That leads to spills- dike was 8 times worse than Exxon Valdez 5 million tons a year

The Russian Record¶ Russia has had a terrible environmental record and a history of oil spills. The area around

Usinsk, just south of the Arctic Circle, is home to what the Huffington Post calls “the world’s worst ecological oil catastrophe,” where leaks in a decommissioned oil well wreaked havoc in 2011.¶ It wasn't the first such incident. In 1994, the

town suffered the third largest oil spill in history. A pipeline in Usinsk had been leaking for eight months when the dike containing the leakage collapsed, spreading 102,000 tons of oil across the tundra , into the Kolva and Rechora rivers, and eventually into the Barents Sea. The leak, eight times larger than the Exxon Valdez spill, was the result of old, corroded, poorly maintained, and over-pumped pipelines. The company responsible, Komineft, had five major accidents in the area between 1986 and 1994. In 1994, Russia was losing an estimated 20 percent of the oil it extracted, but refused to revamp inefficient and environmentally detrimental Soviet pipelines for fear that the break in production would lessen the Russian hold on former Soviet republics and interfere with loan repayment. More recently, Greenpeace, the World Wildlife Fund, and the Institute of the

Environment and Genetics of Microorganisms have estimated that Russia continues to spill 5 million tons of oil every year, or as the Huffington Post put it, “one Deepwater Horizon-scale leak about every two month s .” ¶ Vladimir Chuprov, head of the Arctic campaign for Greenpeace Russia, said that Greenpeace International is absolutely against all offshore drilling in the Arctic. Even the U.S. Minerals Management Service estimates a one in five chance of a major spill occurring over the life of just one lease block on Alaska’s outer continental shelf (OCS). Greenpeace International wants to accord the Arctic a world park status similar to Antarctica. At the very least, they demand that the international community provide strict standards to eradicate the risk of oil spills and require mandatory guarantees that any spills will be mitigated at a cost no less than what was spent on the Deepwater Horizon spill.¶ Like Greenpeace International, the NRDC also advocates mandatory international standards on how to develop the Arctic. According to Lisa Speer of the NRDC, the United States doesn’t “have enough information to be able to determine whether or not oil and gas activities can be conducted safely (in the Arctic). And we don’t have the ability to contain and clean up oil in ice, and therefore we think we should wait for drilling in the Arctic until we do have the ability to deal with that.”¶ At a forum on Arctic drilling in January 2012, Andrew Hartsig of the Ocean Conservancy recommended that the United States wait until it has a better hold on the technological requirements of Arctic drilling. However, the U.S. Bureau of Ocean Energy (BOEM) representative Shoshana Lew replied that the federal five-year leasing plan for blocks on Alaska’s OCS would not be deferred until exploration was complete.¶

Putin abolished the Russian Environmental Agency in order to more easily access Arctic extraction that would otherwise require environmental assessments. This is particularly disconcerting because the Arctic region, according to the UN Environment Programme, “is characterized by some of the largest continuous intact ecosystems on the planet,” and therefore environmentally detrimental projects in the region should require careful consideration and planning.¶ The United States has been slow to invest in developing its own Arctic energy reserves for fear of ecological devastation. However, it has not done enough to slow development in nearby

Russia. Russian offshore drilling is a crucial issue for Americans because polar currents could make an Arctic oil spill into a transnational event . A Russian Arctic oil spill would rapidly become a cultural, ecological, and economic disaster for the U nited S tates as well .

US leadership’s key---failure to drill in federal Alaskan waters causes other countries to fill in Sullivan 12 Dan Sullivan, a former state attorney general, is the commissioner of Alaska's Department of Natural Resources, July 20, 2012, “It's time to develop our Arctic resources”, http://www.cnn.com/2012/07/20/opinion/sullivan-arctic-drilling/index.html

Highest environmental standards New Tech and investors Better than Russia and China leadership Seen as responsible energy development

The United States is on the verge of an energy renaissance. We need to recognize and seize the opportunity.¶ This renaissance involves domestic production of natural resources ranging from clean renewables to hydrocarbons.¶ In particular, domestic hydrocarbon production -- both oil and gas -- is increasing dramatically, with some experts predicting that the United States could become the largest hydrocarbon producer in the word -- outstripping Saudi Arabia and Russia -- by 2020.¶ Increased domestic production

of hydrocarbons is driven by two trends. First, new technology is unlocking unconventional resources such as shale-derived oil and gas. And second, investors and policy makers are recognizing that the U.S. still has an enormous resource base of conventional oil and gas, particularly in Alaska.¶ Federal agencies estimate that Alaska's North Slope and

federal waters off Alaska's northern coast contain approximately 40 billion barrels of technically recoverable oil and more than 200 trillion cubic feet of conventional gas.¶ According to the U.S. Geological Survey, this region contains more oil than any comparable region located in the Arctic, including northern Russia .¶ However, the United States is lagging behind its Arctic neighbors in developing these resources . This is unfortunate, because we have some of the highest environmental standards in the world and we should be setting the bar for Arctic development . ¶ Developing our Arctic resources will promote our nation's interests in many ways: securing a politically stable, long-term supply of domestic energy; boosting U.S.

economic growth and jobs; reducing the federal trade deficit; and strengthening our global leadership on energy issues. Leading academic researchers and economists in Alaska have estimated that oil production from Alaska's outer continental shelf will bring federal revenues of approximately $167 billion over 50 years, and create 55,000 jobs throughout the country.¶

Developing U.S. resources in the Arctic has the added benefit of enhancing global environmental protection.¶ One of the arguments used by Arctic drilling opponents is that "we aren't ready," but it is obvious that no matter what preparations are made, they will argue that it isn't enough.¶ Shell, for example, has spent

billions to prepare for drilling in the Arctic this summer, incorporating the lessons learned from the Deepwater Horizon spill in the Gulf of Mexico, state-of-the-art equipment and extensive

scientific research. Recently, the Obama administration has publically expressed its confidence in the company's drilling plans.¶ The U.S. has created some of the highest standards in the world for environmental protection. When we delay or disallow responsible resource development, the end result is not to protect the environment, but to drive hydrocarbon investment and production to countries with much lower environmental standards and enforcement capacity.¶ Last year, it was reported that between 5 million and 20 million tons of oil leak in Russia per year. This is equivalent to a Deepwater Horizon blowout about every two months. Russia had an estimated 18,000 oil pipeline

ruptures in 2010 -- the figure for the U.S. that year was 341.¶ If we do not pursue responsible development in the Arctic, countries such as Russia -- perhaps even China , which is interested in securing access to Arctic hydrocarbon resources -- will dominate energy production from the Arctic. Such a scenario does not bode well for the global environment.¶ By embracing the opportunities in the Arctic, the United States will show the world that it can be a strong leader in responsible energy development.

Arctic oil spills wreak havoc on global biodiversity—it’s the keystone ecosystem of the planet WWF 10 (World Wildlife Fund, “Drilling for Oil in the Arctic: Too Soon, Too Risky” 12/1/10, http://assets.worldwildlife.org/publications/393/files/original/Drilling_for_Oil_in_the_Arctic_Too_Soon_Too_Risky.pdf?1345753131)//WL

Support birds, bears, walruses, narwhals, and otters Global thermostat- heat balance and ocean patterns travel to other areas in oceans Keystone ecosystem- screw one thing up here and causes chain events.

The Arctic and the subarctic regions surrounding it are important for many reasons. One is their enormous biological diversity: a kaleidoscopic array of land and seascapes supporting millions of migrating birds and

charismatic species such as polar bears, walruses, narwhals and sea otters. Economics is another: Alaskan fisheries are among the richest in the world. Their $2.2 billion in annual catch fills the frozen food sections and seafood counters of supermarkets across the nation. However, there is another reason why the Arctic is not just important, but

among the most important places on the face of the Earth. A keystone species is generally defined as one whose removal from an ecosystem triggers a cascade of changes affecting other species in that ecosystem. The same can be said of the Arctic in relation to the rest of the world. With feedback mechanisms that affect ocean currents and influence

climate patterns, the Arctic functions like a global thermostat . Heat balance, ocean circulation patterns and the carbon cycle are all related to its regulatory and carbon storage functions. Disrupt these functions and we effect far-reaching changes in the conditions under which life has existed on Earth for thousands of years. In the context of climate change, the Arctic is a keystone ecosystem for the entire plane t Unfortunately, some of these disruptions are happening already as climate change melts sea ice and thaws the Arctic tundra. The Arctic’s sea ice cover reflects sunlight and therefore heat. As the ice melts, that heat is absorbed by the salt water, whose temperature, salinity and density all begin to change in ways that impact global ocean circulation patterns. On land, beneath the Arctic tundra, are immense pools of frozen methane—a greenhouse gas far more potent than carbon dioxide. As the tundra thaws, the risk of this methane escaping increases.4 Were this to happen, the consequences would

be dire and global in scope. As we continue not just to spill but to burn the fossil fuels that cause climate change, we are nudging the Arctic toward a meltdown that will make sea levels and temperatures rise even faster, with potentially catastrophic consequences for all life on Earth—no matter where one lives it. For the sake of the planet, losing the Arctic is not an option. Mitigating the impact of climate change there ultimately depends upon our getting serious about replacing fossil fuels with

non-carbon-based renewable energies. Until we demonstrate the will and good sense to do that, however, the Arctic needs to be protected from other environmental threats that , compounded by the stress of climate change, undermine its resiliency and hasten its demise. Chief among those threats is offshore drilling—especially in the absence of any credible and tested means of responding effectively to a major spill. Future technological advances may give us those means, but this report argues that we do not have them yet and that we should not drill in the Arctic until we do.

Scenario 3 is Warming

Hydrate blowouts inevitable now – the impact is extinction – only drilling solves Light,12 [Malcolm P.R. Light, Center for Polar Observation and Modeling, University of London, polar climate modeling and methane hydrates in the permafrost and submarine Arctic, “Charting Mankind’s Arctic Methane Emission Exponential Expressway to Total Extinction in the Next 50 Years,” Arctic News, August 10, 2012]

Methane will destabilize due to warming right now Drilling for them stops that

If left alone the subsea Arctic methane hydrates will explosively destabilize on their own due to global warming and produce a massive Arctic wide methane “blowout” that will lead to humanity’s total extinction, probably before the middle of this century (Light 2012 a, b and c). AIRS atmospheric methane concentration data between 2008 and 2012 (Yurganov 2012) show that the Arctic has already entered the early stages of a subsea methane “blowout” so we need to step in as soon as we can (e.g. 2015) to prevent it escalating any further (Light 2012c). The Arctic Natural Gas Extraction, Liquefaction & Sales (ANGELS) Proposal aims to reduce the threat of large, abrupt releases of methane in the Arctic , by extracting methane from Arctic methane hydrates prone to destabilization (Light, 2012c). After the Arctic sea ice has gone (probably around 2015) we propose that a large consortium of oil and gas companies/governments set up drilling platforms near the regions of maximum subsea methane emissions and drill a whole series of shallow directional production drill holes into the subsea sub permafrost “free

methane” reservoir in order to depressurize it in a controlled manner (Light 2012c). This methane will be produced to the surface, liquefied, stored and transported on LNG tankers as a “green energy” source to all nations, totally replacing oil and coal as the

major energy source (Light 2012c). The subsea methane reserves are so large that they can supply the entire earth’s energy needs for several hundreds of years (Light 2012c). By sufficiently depressurizing the Arctic subsea sub permafrost methane it will be possible to draw down Arctic ocean water through the old eruption sites and fracture systems and destabilize the methane hydrates in a controlled way thus shutting down the entire Arctic subsea methane blowout (Light 2012c).

The plan solves—drilling shuts down and reverses the danger zones—we create incentives for safe productionLight, 12 [Malcolm P.R. Light, Center for Polar Observation and Modeling, University of London, polar climate modeling and methane hydrates in the permafrost and submarine Arctic, “Charting Mankind’s Arctic Methane Emission Exponential Expressway to Total Extinction in the Next 50 Years,” Arctic News, August 10, 2012]

Drilling in fault lines will stop uncontrolled methane eruptions Other companies would follow this safe controlled way of extraction

After 2015, when the Arctic Ocean becomes navigable (Figure 5 above, Carana 2012b) it will be possible to set up a whole series of drilling platforms adjacent to, but at least 1 km away from the high volume methane eruption zones and to directionally

drill inclined wells down to intersect the free methane below the sealing methane hydrate permafrost cap within the underlying fault network (Figure 18 above). High volume methane extraction from below the subsea methane hydrates using directional drilling from platforms situated in the stable areas between the talik/fault zones will reverse the methane and seawater flow in the taliks and shut down the uncontrolled methane sea water eruptions (Figure18 above). The controlled access of globally warmed sea water drawn down through the taliks to the base of the methane hydrate - permafrost cap will gradually destabilize the underlying methane hydrate and allows complete extraction of all the gas from the methane hydrate reserve (Figure18 above). The methane extraction boreholes can be progressively opened at shallower and shallower levels as the subterranean methane hydrate decomposes allowing the complete extraction of the sub permafrost reserve (Figure18 above). The methane and seawater will be produced to the surface where the separated methane will be processed in Floating Liquefied Natural Gas (FLNG) facilities and stored in LNG tankers for sale to customers as a subsidised green alternative to coal and oil for power generation, air and ground transport, for home heating and cooking and the manufacture of hydrogen, fertilizers, fabrics, glass, steel, plastics, paint and other products. Where the trapped methane is sufficiently geopressured within the fault system network

underlying the Arctic subsea permafrost and is partially dissolved in the water (Light, 1985; Tyler, Light and Ewing, 1984; Ewing, Light and Tyler, 1984) it may be possible to coproduce it with the seawater which would then be disposed of after the methane had be separated from it for storage (Jackson, Light and Ayers, 1987; Anderson et al., 1984; Randolph and Rogers, 1984; Chesney et al., 1982). Many methane eruption zones occur along the

narrow fault bound channels separating the complex island archipelago of Arctic Canada (Figure 6 and 9). In these regions drilling rigs could be located on shore or offshore and drill inclined wells to intersect the free methane zones at depth beneath the methane hydrates, while the atmospheric methane clouds could be partly eliminated by using a beamed interfering radio transmission system (Lucy Project) (Light 2011a). A similar set of onshore drilling rigs could tap subpermafrost methane along the east coast of Novaya Zemlya (Figure 6 below and 9 above).

Methane is a high energy fuel , with more energy than other comparable fossil fuels (Wales 2012). As a liquid natural gas it can be used for aircraft

and road transport and rocket fuel and produces little pollution compared to coal, gasoline and other hydrocarbon fuels. Support should be sought from the United nations, World Bank, national governments and other interested parties for a subsidy (such as a tax rebate) of some 5% to 15% of

the market price on Arctic permafrost methane and its derivatives to make it the most attractive LNG for sale compared to LNG from other sources. This will guarantee that all the Arctic gas recovered from the Arctic methane hydrate reservoirs and stockpiled, will

immediately be sold to consumers and converted into safer byproducts. This will also act as an incentive to oil

companies to produce methane in large quantities from the Arctic methane hydrate reserves. In this way the Arctic methane hydrate reservoirs will be continuously reduced in a safe controlled way over the next 200 to 300 years supplying an abundant "Green LNG" energy source to humanity .

No adaptation – 4 degree temperature increase will breakdown civilization and cause every impactRoberts 13 (David, citing the World Bank Review’s compilation of climate studies, “If you aren’t alarmed about climate, you aren’t paying attention” http://grist.org/climate-energy/climate-alarmism-the-idea-is-surreal/)

Increase by 4 degrees leads to extinction Forest fire, acidity in ocean, drought, biod loss, and no adaption due to 4 degrees.

We know we’ve raised global average temperatures around 0.8 degrees C so far. We know that 2 degrees C is where most scientists predict catastrophic and irreversible impacts . And we know that we are currently on a trajectory that will push temperatures up 4 degrees or more by the end of the century . What would 4 degrees look like? A recent World Bank review of the science reminds us. First, it’ll get hot: Projections for a 4°C world show a dramatic increase in the intensity and frequency of high-temperature extremes . Recent extreme heat waves such as in Russia in 2010 are likely to become the new normal summer in a 4°C world.

Tropical South America, central Africa, and all tropical islands in the Pacific are likely to regularly experience heat waves of unprecedented magnitude and duration . In this new high-temperature climate regime, the coolest months are likely to be substantially warmer than the warmest months at the end of the 20th century. In regions such as the Mediterranean, North Africa, the Middle East, and the Tibetan plateau, almost all summer months are likely to be warmer than the most extreme heat waves presently experienced. For example,

the warmest July in the Mediterranean region could be 9°C warmer than today’s warmest July. Extreme heat waves in recent years have had severe impacts, causing heat-related deaths , forest fires, and harvest losses . The impacts of the extreme heat

waves projected for a 4°C world have not been evaluated, but they could be expected to vastly exceed the consequences experienced to date and potentially exceed the adaptive capacities of many societies and natural systems . [my emphasis] Warming to 4 degrees would also lead to “an increase of about 150 percent in acidity of the ocean ,” leading to levels of acidity “ unparalleled in Earth’s history .” That’s bad news for, say, coral reefs: The combination of thermally induced bleaching events, ocean acidification, and sea-level rise threatens large fractions of coral reefs even at 1.5°C global warming. The regional extinction of entire coral reef ecosystems, which could occur well before 4°C is reached, would have profound consequences for their dependent species and for

the people who depend on them for food, income, tourism, and shoreline protection. It will also “likely lead to a sea-level rise of 0.5 to 1 meter, and possibly more, by 2100, with several meters more to be realized in the coming centuries.” That rise won’t be spread evenly, even within regions and

countries — regions close to the equator will see even higher seas. There are also indications that it would “significantly exacerbate existing water scarcity in many regions , particularly northern and eastern Africa, the Middle East, and South Asia , while additional countries in Africa would be newly confronted with water scarcity on a national scale due to population growth.” Also, more extreme weather events: Ecosystems will be affected by more frequent extreme weather events, such as forest loss due to droughts and wildfir e exacerbated by land use and agricultural expansion. In Amazonia, forest fires could as much as double by 2050 with warming of approximately 1.5°C to 2°C above preindustrial levels. Changes would be expected to be even more severe in a 4°C world.

Also loss of biodiversity and ecosystem services : In a 4°C world, climate change seems likely to become the dominant driver of ecosystem shifts, surpassing habitat destruction as the greatest threat to biodiversity. Recent research suggests that large-scale loss of biodiversity is likely to occur in a 4°C world, with climate change and high CO2 concentration driving a transition of the Earth’s ecosystems into a state unknown in human experience. Ecosystem damage would be expected to dramatically reduce the provision of ecosystem

services on which society depends (for example, fisheries and protection of coastline afforded by coral reefs and mangroves.) New research also indicates a “rapidly rising risk of crop yield reductions as the world warms .” So food will be tough. All this will add up to “large-scale displacement of populations and have adverse consequences for human security and ec onomic and trade systems. ” Given the uncertainties and long-tail risks involved, “ there is no certainty that adaptation to a 4°C world is possible . ” There’s a small but non-trivial chance of advanced civilization breaking down entirely. Now ponder the fact that some scenarios show us going up to 6 degrees by the end of the century, a

level of devastation we have not studied and barely know how to conceive. Ponder the fact that somewhere along the line, though we don’t know

exactly where, e nough self-reinforcing feedback loops will be running to make climate change unstoppable and irreversible for centuries to come. That would mean handing our grandchildren and their grandchildren not

only a burned, chaotic, denuded world, but a world that is inexorably more inhospitable with every passing decade.

1AC – Alliance Advantage The DOE limits exports now because of the lack of supply and increased demand, but increased supply the plan creates causes exports Charles Ebinger et al 12, a senior fellow and director of the Energy Security Initiative at the Brookings Institution; Kevin Massy, Assistant Director of the Energy Security Initiative at Brookings; and Govinda Avasarala, Senior Research Assistant in the Energy Security Initiative at Brookings, May 2012, “Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas,” http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebinger/0502_lng_exports_ebinger.pdf

Exports depend on public interest Will follow demand supply chain demand

o Will increase due to coal burned electricity Increase in supply means an increase in supply

From the perspective of the U.S. federal government, the issue of implications is viewed in terms of “public interest.” Under existing legislation, exports of natural gas to countries with a free trade agreement (FTA) with the United States are, by

law, deemed to be in the public interest and authorization is required to be given without modification or delay. Projects looking for

authorization to export LNG to countries without an FTA, which account for roughly 96 percent of current global LNG demand, are required to be approved by the Secretary of Energy unless, after public hearing, t he D epartment o f E nergy finds that such exports are not in the public interest.80 Although the legal definition of

“public interest” is not explicitly given in existing legislation, according to public statements by officials from the Department of Energy,

“public interest” includes:

• Adequate domestic natural gas supply; • Domestic demand for natural gas proposed for export ; •

Economic impacts of exports (on GDP, consumers, and industry); • U.S. energy security; • Job creation; • U.S. balance of trade; • International considerations; • Environmental considerations; • Consistency with DoE’s policy of promoting market competition through free negotiation of trade81

The first two of these criteria were addressed in Part I. The remainder focus on the various domestic and international implications of U.S. LNG exports.

Domestic Implications

The domestic implications of U.S. LNG exports include their impact on natural gas prices, natural gas price volatility, jobs and competitiveness, and on overall energy security.

Price of domestic natural Gas

The domestic price impact of natural gas exports will be a significant factor in determining whether or not the United States should export LNG . While it is generally acknowledged that a domestic price increase will result from largescale LNG exports, the size of the price increase is the subject of debate, with a number of studies suggesting a range of possible outcomes. The important considerations when analyzing the results and conclusions of the various existing studies are the assumptions and models that are used when making price forecasts. Below are the results and methodologies of five major pricing studies done by the EIA and three consultancies: Deloitte, ICF International, and Navigant Consulting, which published two studies.

2012 Energy information Administration study In January 2012, the EIA published a study entitled “Effect of Increased Natural Gas Exports on Domestic Energy Markets.”82 The study, conducted at the request of the Office of Fossil Energy of the Department of Energy, analyzed four different export scenarios across four different resource base or economic assumptions to project price responses to LNG exports. In addition to a “baseline” scenario, where no LNG is exported, the EIA model considered four different export scenarios: • A low export/slow growth scenario, where 6 bcf/day of LNG is exported, phased in at a rate of 1 bcf/day per year; • A low export/rapid growth scenario, where 6 bcf/day of LNG is exported, phased in at a rate of 3 bcf/day per year; • A high export/slow growth scenario, where 12 bcf/day of LNG is exported, phased in at a rate of 1 bcf/day per year; • A high export/rapid growth scenario, where 12 bcf/day of LNG is exported, phased in at a rate of 3 bcf/day per year. Given the uncertainty over the actual size of the shale gas resource base and the future growth of the U.S. economy, each of these scenarios (both “baseline” and export) were applied to four alternate background cases: • A reference case, based on the EIA’s 2011 Annual Energy Outlook; • A low-shale estimated ultimate recovery (EUR) case, in which shale gas production from new, undrilled wells is 50 percent below the reference case scenario; • A high-shale EUR case, in which shale gas production from new, undrilled wells is 50 percent higher than the reference case; • A high economic growth case, in which U.S. GDP grows at 3.2 percent as opposed to the 2.7 percent assumed in the reference case. Given the range of assumptions, the range of results was unsurprisingly wide. The results range from a 9.6 percent increase (from $3.56 to $3.90/ mcf) in domestic natural gas prices in 2025 due to exports (in the case of high shale gas recovery, low export volumes and a slow rate of export growth) to a 32.5 percent increase (in the case of low shale gas recovery, high export volumes and a high rate of export growth). The percentage premium for domestic natural gas prices in 2025 for each scenario relative to the baseline scenario price estimate is detailed in table 3. In addition to the price premium for exporting natural gas that exists in each case, the EIA study projected a short-term spike in natural gas prices as a result of LNG exports. As figure 7 below illustrates, in 2015, the first year that LNG exports occur, domestic natural gas prices rise rapidly until total export capacity is reached. In the “lowrapid” scenario prices peak in 2016, after the 6 bcf/day of export capacity is built over 2 years; in the “high-slow” scenario, natural gas prices peak in 2026, after the 12 bcf/day of export capacity is built over 12 years. The immediate jump in price becomes more pronounced in the scenarios where LNG export capacity increases quickly. In the “low-rapid” scenario, the price of natural gas peaks at nearly 18 percent above the baseline case; in the “high-rapid” scenario, natural gas prices peak at 36 percent above the baseline case. This price impact is exacerbated in the Low Shale EUR and High Macroeconomic Growth cases, as LNG exports further tighten domestic natural gas markets. In the most extreme example, the high-rapid scenario for exports in a Low Shale EUR case, the price for natural gas peaks at more than 50 percent than the baseline case.83 There are two factors that should be considered when interpreting the results of this price impact study. The first is the assumption regarding the rate at which LNG could be exported. The results of EIA’s analysis represent an extreme scenario for LNG exports. In the existing LNG market, it is particularly unlikely that either the “low-rapid” or the “high-rapid” scenarios would materialize. The former assumption stipulates that the United States would export 6 bcf/day of LNG by 2016. Given that, at the time of writing, only one facility has been approved to export 2.2 bcf/day to nonFTA countries starting in 2015, it is unlikely that another three plants would be approved and built in such a short time frame.84 The latter scenario, that the United States would be exporting 12 bcf/ day of LNG by 2018, suggests that in the next several years, the United States would grow from exporting negligible volumes of LNG to having roughly one-third of the global LNG export capacity. Not only would this supply growth outpace growth in global LNG demand, but this capacity addition would also have to compete with roughly 11 bcf/day of Australian-origin LNG that is expected to hit the market around the same time.85 The second issue is the model’s assumptions for incremental investment in natural gas production as a result of increased export capacity. The spike in price depicted in figure 7 occurs because investment from gas producers lags additional demand. In the model, producers respond to, rather than anticipate, additional demand. For this reason, prices peak once the export capacity is filled, before steadily decreasing. In reality, the expectation of future demand would likely induce gas producers to invest in additional production before incremental demand occurs. As a result, the increase in prices would likely begin earlier and peak at a lower level than suggested by the model. deloitte study An earlier study released in November 2011 from the Deloitte Center for Energy Solutions highlighted the producer-response in its model. In addition to finding that LNG exports would produce a smaller increase in gas prices than the EIA report suggests, the Deloitte study points out that “producers can develop more reserves in anticipation of demand growth, such as LNG exports. There will be ample notice and time in advance of the exports to make supplies available.”86 Using a dynamic model, in which production increased in anticipation of new demand, the Deloitte study found that 6 bcf/day of exports of LNG would result in, on average, a 1.7 percent increase (from $7.09 to $7.21/MMBtu) in the price of natural gas between 2016 and 2035.

Further, the Deloitte study noted that there would be regional variations to the increase in natural gas prices resulting from LNG exports. As most of the proposed liquefaction terminals are expected to be on the Gulf Coast, the price of Henry Hub gas, which is the key benchmark for natural gas from the Gulf Coast, will increase by $0.22/ MMBtu by 2035 as a result of U.S. LNG exports. This is more than double the price increase projected in regions further away from the LNG export terminals. In New York and Illinois, natural gas prices are projected to increase by less than $0.10/MMBtu. This is particularly important in the Northeast, which historically experiences some of the highest natural gas prices in the country, but will benefit from the development and consumption of natural gas from the nearby Marcellus shale play. other studies Three other studies of note have analyzed the price impacts of U.S. LNG exports. In August 2010, Navigant Consulting found that 2 bcf/day of LNG exports would cause a price increase of between 7 and 7.9 percent from 2015 to 2035 relative to a scenario with no gas exports. ICF International found in August 2011 that 6 bcf/day of exports would result in an 11 percent ($0.64/MMBtu) increase in natural gas prices over the same period.87 More recently, Navigant released another study that analyzed the impact of two separate export scenarios. The first scenario modeled the impact of 3.6 bcf/day of LNG exports from three terminals in North America: Sabine Pass in Louisiana, Kitimat in British Columbia, and Coos Bay in Oregon. The second scenario modeled the impact of 6.6 bcf/day of LNG exports from the three aforementioned export projects and 2 bcf/day of added exports from the Gulf Coast and 1 bcf/day from Maryland.88 This Navigant study found that 6.6 bcf/day of LNG exports would result in a 6 percent ($0.35/MMBtu) increase in natural gas prices from 2015 to 2035. As with the EIA and Deloitte studies, the results of both Navigant and ICF’s studies must be analyzed in the context of their respective methodologies and assumptions. Navigant’s first study uses a more static supply model, which, unlike dynamic supply models, does not fully take account of the effect that higher prices have on spurring additional production. As a result, it takes a conservative estimate of supply growth potential. The report acknowledges that the price outcomes modeled in its analysis “establish the upper range of impacts that exports […] might have on natural gas prices.”89 This study also did not factor in the reemergence of the industrial sector as a major consumer of natural gas following the shale gas “revolution.” The study assumes that natural gas consumption by the industrial sector will decline by 0.3% per year to 2035. By contrast, the EIA model assumes that industrial sector demand will increase by roughly 1% per year over the same period.90 The ICF study factors in various levels of production response from an increase in price. Under its 6 bcf/day export scenario, the price impact ranges from a $0.52/ MMBtu increase in a more responsive drilling activity scenario to a $0.75/MMBtu increase in a less responsive drilling activity scenario. which study is right? Given that these studies forecast natural gas prices two decades into the future, it is difficult to determine which study is most accurate. (table 4 shows a comparison of the price impact forecasts of the various models.) However, policymakers would benefit from having a better understanding of the results that are generated from each report. This includes choosing the most relevant results from each report. For instance, following the release of the EIA study, many commentators were quick to highlight that natural gas prices could increase by more than 50 percent as a result of LNG exports. However, this ignored the assumptions behind this number: it was based on the price of natural gas in one year under the most extreme assumptions of exports and domestic resource base. A more comprehensive analysis should include an assessment of the average price impact from 2015 to 2035. When distinguishing between the various studies, policymakers should identify which assumptions most resemble the existing natural gas market and its likely direction, and which models are most reflective of the complex nature of domestic and global natural gas trade. Assuming realistic volumes of natural gas exports as well as a reasonable supply response by natural gas producers are important considerations. It is important to note that the supply curves in the various studies reflect different interpretations of the economics of marginal production. The Power sector and industrial sector Part I indicated that the power-generation and industrial sectors would account for most of the demand for newly available natural gas resources. As shown above, LNG exports are likely to increase domestic prices of natural gas, suggesting negative consequences for these two competing sectors. In their analyses, both Deloitte and EIA found that the majority—63 percent, according to both studies—of the exported natural gas will come from new production as opposed to displaced consumption from other sectors. By contrast, between 17 and 38 percent of supply of natural gas for export would be met by reduced demand, as higher prices pushes some domestic consumers to use less gas.

In the power generation and industrial sectors, the price impacts of LNG exports are likely to have modest impacts. In the power sector, natural gas has historically been used as a back up to coal and nuclear base-load generation. For such gas used at the margin, the increase in electricity prices as a result of LNG exports would be limited by its competitiveness relative to

other fuels: as soon as it becomes more expensive than the alternative for back up generation, power producers will substitute away from gas.91 According to ICF International, a $0.64/MMBtu increase in the price of natural gas would result in an electricity price increase of between $1.66 and $4.97/megawatt-hour (MWh), depending on how often gas is used as the marginal fuel for electricity. Deloitte estimates that the price increase of electricity would not be more than $1.65/MWh. 92 EIA estimates that electricity price impacts will be marginal as well (between $1.40/MWh and $2.90/MWh) except in the “highrapid” export scenario.93 The EIA Annual Energy Outlook 2011 estimates that, without exporting LNG, the average price of electricity (across all fuels) in 2035 will be $92/MWh.94

In the longer term, natural gas is itself likely to be used for more base-load generation. The rapid increase in shale gas production, coupled

with the retirements o f as much as 50 gigawatts (GW) of coal-fired electricity due to plant age or inability to adhere to possibly forthcoming EPA regulations is likely to increase the demand for natural gas in the power sector. According to some analysts, the near-term demand caused by the retirements of the oldest and least efficient

coal-fired power plants could result in an additional natural gas demand of 2 bcf/day.95 Given the lack of

environmentally and economically viable alternatives, a moderate increase in gas prices is unlikely to result in a large move away from natural gas, although increased costs will be transferred to customers. Natural gas consumption in the power sector has been considered economic at prices much higher than those resulting from LNG exports in even the highest price-impact projections. Even prior to the shale gas “revolution,” when natural gas prices were high, natural gas demand was increasing in the power sector. The EIA Annual Energy Outlook 2005— published in a year when average well head prices were over $7/MMBTU—projected that natural gas demand in the electricity sector would increase by 70 percent between 2003 and 2015.96

Unlike the power sector, which continued to build natural-gas fired generation during a period of increasing gas prices, the industrial sector was negatively affected by growing natural gas import dependence, high gas prices, and gas price volatility. Between 2000 and 2005, the price of natural gas increased by 99 percent and LNG imports more than doubled.97 By 2005, the ratio of the price of oil to the price of natural gas was approximately 6:1, just below the 7:1 oil-to-gas price ratio at which U.S. petrochemical and plastics producers are globally competitive.98 That same year Alan Greenspan, then-Chairman of the Federal Reserve, noted that because of natural gas price increases “the North American gas-using industry [was] in a weakened competitive position.”99 Since then the price of natural gas has collapsed. In 2011, the oil-to-natural gas price ratio was more than 24:1. In 2012 it has been even higher. The decline in natural gas prices has galvanized the industrial sector. A joint study by PwC and the National Association for Manufacturers, an industry trade group, found that the development of shale gas could save manufacturers as much as $11.6 billion per year in feedstock costs through 2025.100 New investments in petrochemical and plastics producing facilities are occurring throughout the East and Southeast, largely predicated on the availability of inexpensive natural gas. Opponents of LNG exports contend that such investments would be deterred in the future as a result of increases in the price of natural gas. However, the evidence suggests that the competitive advantage of U.S. industrial producers relative to its competitors in Western Europe and Asia is not likely to be affected significantly by the projected increase in natural gas prices resulting from LNG exports. As European and many Asian petrochemical producers use oil-based products such as naphtha and fuel oil as feedstock, U.S. companies are more likely to enjoy a significant cost advantage over their overseas competitors. Even a one-third decline in the estimated price of crude oil in 2035 would result in an oil-to-gas ratio of 14:1.101 There is also the potential for increased exports to help industrial consumers. Ethane, a liquid byproduct of natural gas production at several U.S. gas plays, is the primary feedstock of ethylene, a petrochemical product used to create a wide variety of products. According to a study by the American Chemistry Council, an industry trade body, a 25 percent increase in ethane production would yield a $32.8 billion increase in U.S. chemical production. By providing another market for cheap dry gas, LNG exports will encourage additional production of natural gas liquids (NGL) that are produced in association with dry gas. According to the EIA, ethane production increased by nearly 30 percent between 2009 and 2011 as natural gas production from shale started to grow substantially. Ethane production is now at an alltime high, with more than one million barrels per day of ethane being produced.102 Increased gas production for exports results in increased production of such natural gas liquids, in which case exports can be seen as providing a benefit to the petrochemical industry.

natural gas price volatility

A major concern among domestic end users of natural gas is the possibility of an increase in natural gas price volatility resulting from an increase in U.S. LNG exports. As figure 8 demonstrates, the price volatility experienced during

the 2000s was the highest the domestic gas market has experienced in the past three decades.

The volatility of the natural gas market in the 2000s was largely caused by a tight supply-demand balance .

Natural gas demand increased substantially as the U.S. economy grew and natural gas was viewed as environmentally preferable to coal for power generation. This increase in demand coincided with a reduction in domestic supply and an increased reliance on imports. The recent surge in U.S. natural gas production has resulted in less market volatility since 2010. According to EIA, the standard deviation of the price of natural gas (a general statistical indicator of volatility) between 2010 and 2011 was one-third what it was during the 2000s.103 Potential exports of U.S. LNG concerns some domestic consumers for two principal reasons: greater volatility in domestic natural gas prices; and exposure of domestic natural gas prices to higher international prices resulting in a convergence between low U.S. prices and high international prices.

There is an insufficient amount of data and quantitative research on the relationship between domestic natural gas price volatility and LNG exports. However, certain characteristics of the LNG market are likely to limit volatility. LNG is bound by technical constraints: it must be liquefied and then transported on dedicated tankers before arriving at terminals where a regasification facility must be installed. Liquefaction facilities have capacity limits to how much gas they can turn into LNG. If they are operating at or close-to full capacity, such facilities will have a relatively constant demand for natural gas, therefore an international price or supply shock would have little impact on domestic gas prices. Moreover, unlike oil trading, in which an exporter—theoretically—sells each marginal barrel of production to the highest bidder in the global market, the capacity limit on LNG production and export means that LNG exporters have an infrastructure-limited demand for natural gas leaving the rest of the natural gas for domestic consumption. As most LNG infrastructure facilities are built on a project finance basis and underpinned by long-term contracts, this demand can be anticipated by the market years in advance, reducing the likelihood of volatility. The macroeconomy and jobs The macroeconomic and job implications of LNG exports depend on two principal factors: the gains from trade from exploiting pricing differentials and inefficiencies of the global market; and the employment implications of those gains, higher domestic natural gas prices, and greater domestic natural gas production. The Department of Energy has commissioned a study on both the macroeconomic and employment implications of U.S. LNG exports, which will be released later this year. This study will provide a qualitative assessment of the implications of LNG exports to the U.S. economy and employment. LNG exports are likely to be a net benefit to the U.S. economy, although probably not a significant contributor in terms of total U.S. GDP. Exports of U.S. natural gas will take advantage of the benefits of the existing producer’s surplus resulting from the pricing differentials between the natural gas markets in the United States, Europe, and Asia. Contractual terms will determine how this surplus is shared between U.S. sellers and foreign buyers.104 The benefit of this trade will likely outweigh the cost to domestic consumers of the increase in the price of natural gas as most of the natural gas demanded by exports

will come from new natural gas production as opposed to displacing existing production from domestic consumers. On the other hand, LNG exports from the United States are likely to put marginal upward pressure on the relative value of the U.S. dollar. In March 2012, Citigroup released a report on North American hydrocarbon production that included a model of the macroeconomic impact of U.S. oil and gas exports. The Citi analysis found that oil and gas exports would cause a nearly two percent decline in the current account deficit by 2020, but that the exchange rate implications would be modest. By 2020, the U.S. dollar would appreciate by between 1.6 and 5.4 percent.105 The implications of LNG exports on job creation are similarly difficult to quantify. Other than temporary construction jobs created by the need to build liquefaction capacity, pipelines, and other ancillary infrastructure, the operation of the liquefaction facility will likely provide little permanent employment benefit. As outlined in the section on price impacts above, as much of the gas for export will come from new production, rather than the displacement of consumption in other sectors, the negative economic, and therefore jobrelated, effects on those sectors is likely to be limited. Beyond the labor required for additional gas production to satisfy LNG exports, the net impact of LNG exports is likely to be minimal. Further upstream, the job potential may be greater. By increasing domestic natural gas production, employment from additional oil and gas producers will increase, as will the demand for manufacturers of equipment for oil and gas production, gathering, and transportation. domestic energy security

Aside from the price impact of potential U.S. LNG exports, a major concern among opponents is that such exports would diminish U.S. “energy security”; that exports would deny the United States of a strategically important resource . The extent to which such concerns are valid depends on several factors, including the size of the domestic resource base , and the liquidity and functionality of global trade. As Part I of this report notes, geological

evidence suggests that the volumes of LNG export under consideration would not materially affect the availability of natural gas for the domestic market. Twenty years of LNG exports at the rate of 6 bcf/day, phased in over the course of 6 years, would increase demand by approximately 38 tcf. As presented in Part I, four existing estimates of total technically recoverable shale gas resources range from 687 tcf to 1,842 tcf; therefore, exporting 6 bcf/day of LNG over the course of twenty years would consume between 2 and 5.5 percent of total shale gas resources. While the estimates for shale gas reserves are uncertain, in a scenario where reserves are perceived to be lower than expected, domestic natural gas prices would increase and exports would almost immediately become uneconomic. In the long-term, it is possible that U.S. prices and international prices will converge to the point at which they settle at similar levels. In that case, the United States would have more than adequate import capacity (through bi-directional import/export facilities) to import gas when economic.

A further gas-related consideration with regard to energy security is the effects of increased production of associated natural gas with the increasing volumes of U.S. unconventional oil. As the primary energy-security concern for the United States related to oil, the application of fracking and horizontal drilling in oil production is reducing U.S. oil import dependence, while simultaneously producing substantial volumes of natural gas, which, given the relative economics of oil and gas, is effectively delivered at zero (or, in the case of producers who have to invest in equipment to manage flaring and venting, negative) cost. To the extent that associated gas from unconventional oil production is used for LNG export, it can be seen as a consequence of—rather than a threat to—increased U.S. energy security. international implications The international implications of LNG exports from the United States can be divided into pricing, geopolitics, and environment. international Pricing As discussed in Part I, the global LNG market is informally separated into three markets: North America, the Atlantic Basin (mostly Europe), and the Pacific Basin (including Japan, South Korea, Taiwan, China, and India). These markets are separated because of important technical differences that impact the pricing structure for LNG in each market. The North American natural gas market is competitive and prices are traded in a transparent and open market. The Atlantic Basin is dominated by European LNG consumers such as the United Kingdom, Spain, France, and Italy, and is a hybrid of a competitive U.K. market that was liberalized in the mid-1990s and a Continental European market that is dominated by oil-linked, take-or-pay contracts. In recent years, the U.K. hub, the National Balancing Point (NBP), has traded at a premium to the U.S. hub, the Henry Hub. The Pacific Basin is a more rigid market that depends heavily on oilindexed contracts that are more expensive than those used in the Atlantic Basin. While they have no central trading hub, the Pacific Basin consumers such as Japan and South Korea (which is implementing its recently-signed free-trade agreement with the United States) currently import LNG based on a pricing formula known informally as the Japan Crude Cocktail, the average price of custom-cleared oil imports into Tokyo. Many Pacific Basin contracts have a built-in price floor and price ceiling depending on the price of oil.106 Without exporting any natural gas, the U.S. shale gas “revolution” has already had a positive impact on the liquidity of global LNG markets. Many LNG cargoes that were previously destined for gas-thirsty U.S. markets were diverted and served spot demand in both the Atlantic and Pacific Basins. The increased availability of LNG cargoes has helped create a looser LNG market for other consumers (see figure 9). This in turn has helped apply downward pressure to the terms of oillinked contracts resulting in the renegotiation of some contracts, particularly in Europe. Increased availability of LNG cargoes also accelerated a recent trend of increasing reliance of consumers on spot LNG markets. In 2010 short-term and spot contracts represented 19 percent of the total LNG market, up from only a fraction one decade earlier.107 In this case, increasing demand for spot cargoes indicates that consumers are taking advantage of spot prices that are lower than oilindexed rates. LNG exports will help to sustain market liquidity in what looks to be an increasingly tight LNG market beyond 2015 (see figure 10). Should LNG exports from the United States continue to be permitted, they will add to roughly 10 bcf/day of LNG that is expected to emerge from Australia between 2015 and 2020. Nevertheless, given the projected growth in demand for natural gas in China and India and assuming that some of Japan’s nuclear capacity remains offline, demand for natural gas will outpace the incremental supply. This makes U.S. LNG even more valuable on the international market. Although it will be important to global LNG markets, it is unlikely that the emergence of the United States as an exporter of LNG will change the existing pricing structure overnight. Not only is the market still largely dependent on long-term contracts, the overwhelming majority of new liquefaction capacity emerging in the next decade (largely from Australia) has already been contracted for at oil-indexed rates.108 The incremental LNG volumes supplied by the United States at floating Henry Hub rates will be small in comparison. But while U.S. LNG will not have a transformational impact, by establishing an alternate lower price for LNG derived through a different market mechanism, U.S. exports may be central in catalyzing future changes in LNG contract structure. As previously mentioned, this impact is already being felt in Europe. A number of German utilities have either renegotiated contracts or are seeking arbitration with natural gas suppliers in Norway and Russia. The Atlantic Basin will be a more immediate beneficiary of U.S. LNG exports than the Pacific Basin as many European contracts allow for periodic revisions to the oil-price linkage.109 In the Pacific Basin this contractual arrangement is not as common and most consumers are tied to their respective oil-linkage formulae for the duration of the contract.110 Despite the increasing demand following the Fukushima nuclear accident, however, Japanese LNG consumers are actively pursuing new arrangements for LNG contracts.111 There are other limits to the extent of the impact that U.S. LNG will have on global markets. It is unlikely that many of the LNG export facilities under consideration will reach final investment decision. Instead, it is more probable that U.S. natural gas prices will have rebounded sufficiently to the point that exports are not commercially viable beyond a certain threshold. (figure 11 illustrates the estimated costs of delivering LNG to Japan in 2020.) This threshold, expected by many experts to be roughly 6 bcf/day by 2025, is modest in comparison to the roughly 11 bcf/day of Australian LNG export projects that have reached final investment decision and are expected to be online by 2020. Also, the impact of U.S. LNG exports could be limited by a number of external factors that will have a larger bearing on the future of global LNG prices. For instance, a decision by the Japanese government to phase-out nuclear power would significantly tighten global LNG markets and probably displace any benefit provided by U.S. LNG exports. Conversely, successful and rapid development of China’s shale gas reserves would limit the demand of one of the world’s fastest-growing natural gas consumers. However, to the extent that U.S. LNG exports can help bring about a more globalized pricing structure, they will have economic and geopolitical consequences. Geopolitics A large increase in U.S. LNG exports would have the potential to increase U.S. foreign policy interests in both the Atlantic and Pacific basins. Unlike oil, natural gas has traditionally been an infrastructure-constrained business, giving geographical proximity and political relations between producers and consumers a high level of importance. Issues of “pipeline politics” have been most directly visible in Europe, which relies on Russia for around a third of its gas. Previous disputes between Moscow and Ukraine over pricing have led to major gas shortages in several E.U. countries in the winters (when demand is highest) of both 2006 and 2009. Further disagreements between Moscow and Kiev over the terms of the existing bilateral gas deal have the potential to escalate again, with negative consequences for E.U. consumers. The risk of high reliance on Russian gas has been a principal driver of European energy policy in recent decades. Among central and eastern European states, particularly those formerly aligned with the Soviet Union such as Poland, Hungary, and the Czech Republic, the issue of reliance on imports of Russian gas is a primary energy security concern and has inspired energy policies aimed at diversification of fuel sources for power generation. From the U.S. perspective such Russian influence in the affairs of these democratic nations is an impediment to efforts at political and economic reform. The market power of Gazprom, Russia’s state-owned gas monopoly, is evident in these countries. Although they are closer to Russia than other consumers of Russian gas in Western Europe, many countries in Eastern and Central Europe pay higher contract prices for their imports, as they are more reliant on Russian gas as a proportion of their energy mixes. In the larger economies of Western Europe, which consume most of Russia’s exports, there are efforts to diversify their supply of natural gas. The E.U. has formally acknowledged the need to put in place mechanisms to increase supply diversity. These include market liberalization approaches such as rules mandating third-party access to pipeline infrastructure (from which Gazprom is demanding exemption), and commitments to complete a single market for electricity and gas by 2014, and to ensure that no member country is isolated from electricity and gas grids by 2015.112 Despite these formal efforts, there are several factors retarding the E.U.’s push for a unified effort to reduce dependence on Russian gas. National interest has been given a higher priority than collective, coordinated E.U. energy policy: the gas cutoffs in 2006 and 2009 probably contributed to the acceptance of the Nord Stream project, which carries gas from Russia into Germany. Germany’s decision to phase out its fleet of nuclear reactors by 2022 will result in far higher reliance on natural gas for the E.U.’s biggest economy. The environmental imperative to reduce carbon emissions—codified in the E.U.’s goal of essentially decarbonizing its power sector by the middle of century—mean that natural gas is being viewed by many as the short-to medium fuel of choice in power generation. Finally, the prospects for European countries to replicate the unconventional gas “revolution” that has resulted in a glut of natural gas in the United States look uncertain. Several countries, including France and the U.K., have encountered stiff public opposition to the techniques used in unconventional gas production, while those countries, such as Poland and Hungary, that have moved ahead with unconventional-gas exploration have generally seen disappointing early results. Collectively, these factors suggest that the prospects for reduced European reliance on Russian gas appear dim. The one factor that has been working to the advantage of advocates of greater European gas diversity has been the increased liquidity of the global LNG market, discussed above. Russia’s dominant position in the European gas market is being eroded by the increased availability of LNG. Qatar’s massive expansion in LNG production in 2008, coupled with the rise in unconventional gas production in the United States as well as a drop in global energy demand due to the global recession, produced a global LNG glut that saw many cargoes intended for the U.S. market diverted into Europe. As mentioned previously, with an abundant source of alternative supply, some European consumers, mainly Gazprom’s closest partners, were able to renegotiate their oil-linked, takeor-pay contracts with Gazprom. As figure 10 illustrates, however, in the wake of the Fukushima natural disaster and nuclear accident in Japan and a return to growth in most industrialized economies, the LNG market is projected to tighten considerably in the short-term, potentially returning market power to Russia. However, there is a second, structural change to the global gas market that may have more lasting effects to Russia’s market power in the European gas market. LNG is one of the fastest growing segments of the energy sector. The growth of the LNG market, both through long-term contract and spot-market sales, is likely to put increasing pressure on incumbent pipeline gas suppliers. A significant addition of U.S. LNG exports will accelerate this trend. In addition to adding to the size of the market, U.S. LNG contracts are likely to be determined on a “floating” basis, with sales terms tied to the price of a U.S. benchmark such as Henry Hub, eroding the power of providers of long-term oil linked contract suppliers such as Russia. While U.S. LNG will not be a direct tool of U.S. foreign policy—the destination of U.S. LNG will be determined according to the terms of individual contracts, the spot-price-determined demand, and the LNG traders that purchase such contracts—the addition of a large, market-based producer will indirectly serve to increase gas supply diversity in Europe, thereby providing European consumers with increased flexibility and market power. Increased LNG exports will provide similar assistance to strategic U.S. allies in the Pacific Basin. By adding supply volumes to the global LNG market, the U.S. will help Japan, Korea, India, and other import-dependent countries in South and East Asia to meet their energy needs. The desire on the part of Pacific Basin countries for the U.S. to become a gas supplier to the region has been underlined by the efforts of the Japanese government, which has attempted to secure a free-trade agreement waiver from the United States to allow exports. As with oil price-linked Russian gas contracts in Eu-rope, U.S. LNG exports linked to a floating Henry Hub benchmark, have the potential to weaken the market power of incumbent LNG providers to Asia, increasing the negotiating power of consumers and decreasing the price. As U.S. foreign policy undergoes a “pivot to Asia,” the ability of the U.S. to provide a degree of increased energy security and pricing relief to LNG importers in the region will be an important economic and strategic asset. Beyond the basin-specific considerations of U.S. LNG exports, they would provide a source of predictable natural gas supply that is relatively free from unexpected production or shipping disruption. With Qatar representing roughly one-third of the global LNG market, a blockade or military intervention in the Strait of Hormuz or a direct attack on Qatar’s liquefaction facilities by Iran would inflict chaos on world energy markets. While the United States government will be unable to physically divert LNG cargoes to specific markets or strategic allies that are most affected (gas allocation will be made by the market players), additional volumes of LNG on the world market will benefit all consumers. international Environmental implications Proposed LNG exports from the United States have encountered domestic opposition on environmental grounds. As outlined in Part I, natural gas production causes greenhouse gas emissions in the upstream production process through leakages, venting, and flaring. The greenhouse gas footprint of shale gas production has been the subject of vigorous debate, with some studies suggesting that methane from the production process leads to shale gas having a higher global warming impact than that of other hydrocarbons including coal. While the methodology underlying such studies has been widely criticized, there is no doubt that leakage and venting of natural gas is a serious negative environmental consequence of natural gas production and transportation: EPA has estimated that worldwide leakages and venting volumes were 3,353.5 bcf in 2010.113 By contrast, some advocates of U.S. exports of LNG maintain that they have the potential to bring global environmental benefits if they are used to displace more carbon-intensive fuels. According to the IEA, natural gas in general has the potential to reduce carbon dioxide emissions by 740 million tonnes in 2035, nearly half of which could be achieved by the displacement of coal in China’s power-generation portfolio. Natural gas—in the form of LNG—also has the potential to displace more carbon-intensive fuels in other major energy users, including across the EU and in Japan, which is being forced to burn more coal and oil-based fuels to make up for the nuclear generation capacity lost in the wake of the Fukushima disaster. In addition to its relatively lower carbon-dioxide footprint, natural gas produces lower emissions of pollutants such as sulfur dioxide nitrogen oxide and other particulates than coal and oil. Natural gas—both in the form of LNG and compressed natural gas—is also being viewed as a potential replacement for oil in the vehicle transportation fleet, with large carbon dioxide abatement potential.114 However, as discussed in Part I, even the United States with its low gas prices is unlikely to see any significant move toward natural gas vehicles in the absence of government policies; the prospects for such vehicles entering the European or Asian markets, where gas is several times as expensive, are remote. On the other hand, additional volumes of natural gas in the global power generation fleet may also have longer-term detrimental consequences for carbon emissions. According to the IEA, by backing out nuclear and renewable energy generation, natural gas could add 320Mt of carbon dioxide by 2035.115 Whether U.S. LNG exports contribute to reduced carbon dioxide emissions through the displacement of coal fired power generation or to the crowding out of renewable and nuclear energy in the global energy mix is something of a moot point. According to the IEA, global power generation is projected to exceed 27,000 terawatt hours per year by 2020.116 Even assuming U.S. exports of 6 bcf/day (on the upper end of the range of expectations), zero losses due to transportation, regasification, and transmission, and a high natural gas power plant efficiency level of 60 percent, such volumes would account for just over one percent of total global power generation.117 Therefore, although the domestic environmental impacts associated with shale gas extraction may, pending the outcome of further study, prove to be a cause for concern with respect to greenhouse gas emissions, the potential for U.S. LNG exports to make a meaningful impact on global emissions through changes to the global power generation mix is negligible. Part III: Conclusions and Recommendations

This paper has attempted to answer two questions: Are U.S. LNG exports feasible? If so, what are the implications of U.S. LNG exports?

For exports to be feasible, several demand and supply-related conditions need to be met. On the supply side, adequate resources must be available and their production must be sustainable over the long-term. The regulatory and policy environment will need to accommodate natural gas production to ensure that the resources are developed. The capacity and infrastructure required to enable exports must also be in place. This includes the adequacy of the pipeline and storage network, the availability of shipping capacity, and the availability of equipment for production and qualified engineers.

On the demand side, LNG exports will compete with two main other domestic end uses for natural gas: the power-generation sector, and the industrial and petrochemical sector. According to most projections, the U.S. electricity sector will see an increased demand for natural gas as it seeks to comply with policies and regulations aimed at reducing carbon-dioxide

emissions and pollutants from the power-generation fleet. Cheaper natural gas in the industrial sector has the potential to lower the cost of petrochemical production and to improve the

competitiveness of a range of refining and manufacturing operations. Advocates of natural gas usage in the transportation fleet – particularly in heavy-duty vehicles (HDVs) – see it as a way to decrease the country’s dependence on oil, although absent major policy support, this sector is unlikely to represent a significant source of gas demand.

For increased U.S. LNG exports to be feasible, they will also need to be competitive with supplies from other sources. The major demand centers that would import U.S. LNG would be Pacific Basin consumers (Japan, South Korea, and Taiwan, and increasingly China and India), and Atlantic Basin consumers, mostly in Europe. The supply and demand balance in the Atlantic and Pacific Basins and, therefore the feasibility for natural gas exports from the United States, depend heavily on the uncertain outlook for international unconventional natural gas production. Recent assessments in countries such as China, India, Ukraine, and Poland indicate that each country has significant domestic shale gas reserves. If these reserves are developed effectively—which is likely to be difficult in the short-term due to a lack of infrastructure, physical capacity, and human capacity—many of these countries would dramatically decrease their import dependence, with negative implications for existing and newcomer LNG exporters.

Detailed analysis of the foregoing factors suggests that the exportation of liquefied natural gas from the United States is logistically feasible. Based on current knowledge, the domestic U.S. natural gas resource base is large enough to accommodate the potential increased demand for natural gas from the electricity sector, the industrial sector, the residential and commercial sectors, the transportation sector, and exporters of LNG. Other obstacles to production, including infrastructure, investment, environmental concerns, and human capacity, are likely to be surmountable. Moreover, the current and projected supply and demand fundamentals of the international LNG market are conducive to competitive U.S.-sourced LNG.

While LNG exports may be practically feasible, they will be subject to approval by policy makers if they are to happen. In making a determination on the advisability of exports, the federal government will focus on the likely implications of LNG exports: i.e. whether LNG exports are in the “public interest.” The extent of the domestic implications is largely dependent upon the price impact of exports on domestic natural gas prices. While it is clear that domestic natural gas prices will increase if natural gas is exported, most existing analyses indicate that the implications of this price increase are likely to be modest. Natural gas

producers will likely anticipate future demand from LNG exports and will increase production accordingly, limiting price spikes. The impact on the domestic industrial sector is likely to be marginal: to the extent that LNG exports raise domestic gas prices above the level at which they would have been in the absence of such exports, they will negatively affect the competitiveness of U.S. industry relative to international competitors. However, the competitiveness of natural-gas intensive U.S. companies relative to their counterparts is likely to remain strong, given the large differential between projected U.S. gas prices and oil prices, which are the basis for industrial feedstock by competitor countries. Further, LNG exports are likely to stimulate domestic gas production, potentially resulting in greater production of natural gas liquids such as ethane, a valuable feedstock for industrial consumers. LNG exports are also unlikely to result in an increase in price volatility. The volume of LNG exports is capped by the capacity limitations of liquefaction terminals. If liquefaction terminals are running at close to full capacity, an increase in international demand will do little to affect domestic demand for —and therefore domestic prices of —natural gas.

LNG exports strengthens the US-Japan alliance by locking in Japanese energy security---increases burden sharing, solves aggressive Chinese expansionism Itoh 13 Shoichi, Senior Analyst, Strategy Research Unit at The Institute of Energy Economics, Japan, "Energy Security in Northeast Asia: A Pivotal Moment for the U.S.-Japan Alliance", March, www.brookings.edu/research/opinions/2013/03/12-energy-security-itoh

China and Japan get oil from same place- SCS US exports means Japan gets it from US and China gets from SCS Russia also gives oil to China but as China needs more Russia fears and makes TNWs Aff solves that because China can just get energy from SCS

LNG as a fuel to increase Japan’s burden-sharing ¶ Increases of LNG exports from the U nited States to Japan will become a new way to strengthen the alliance, and the impacts extend beyond energy . Undoubtedly, Japan would benefit from prospective participation in the TPP, and co-designing the future framework of economic rules in the Asia-Pacific region would also reinforce the bilateral alliance. TPP membership for Japan would remove a potential obstacle to increase LNG exports from the lower 48 states. According to the U.S. Natural Gas Law, LNG exports to non-FTA trade partners must be authorized by the Department of Energy on a case-by-case basis (Japan has imported LNG from Alaska since

1969.) However, the meaning of increasing LNG supplies to Japan should be emphasized in a wider context, entail ing

geostrategic importance besides the economic benefits of improving the U.S. international balance of payments. LNG imports from the United States will beef up Japan’s economic muscle, better allowing it to play the role of the main

“bridgehead” of the U.S. strategy toward the Asia-Pacific region. With sound economic growth, Japan can be expected to contribute more to burden-sharing as it will be able to increase its budgets for defense, economic aid to developing countries, and many other issues that benefit the U.S.-Japan alliance.¶ Even if Tokyo decides in principle to restart nuclear reactors, both the political and technical processes will take some time. Public support will have to be nurtured in a step-by-step manner. This means that increased access to economically competitive LNG supplies remains urgent. As late as February 2013, Japan paid approximately five times more than the U.S. Henry Hub price per million Btu (British thermal unit), on average, for LNG purchases. Although of the price of future imports of LNG from North America remains uncertain, it is generally estimated that the final cost of LNG from the lower 48 states―including liquefaction costs, transportation fees, and other costs―are still lower than the average price of Japan’s current LNG

imports.¶ Aside from the price issue, securing new LNG supply routes from North America is also important to ensure the safety of Japan’s seaborne hydrocarbon transportation. Currently, approximately 80 percent of crude oil and 30 percent of LNG destined for Japan cut across the East China Sea, where Sino-Japanese tension is simmering .¶ Toward a joint architecture for Asian-Pacific energy security¶ Against the background of the shale revolution, there are rising expectations about “energy independence” in the United States, which is thought not only to boost the domestic economy with cheap energy prices and reduce vulnerability to international oil prices, but also to increase policy options for U.S. diplomacy. The ongoing debate about diplomatic implications of U.S. energy independence within the next decade

by and large tends to focus on the question of how it would affect the U.S. military presence in the Middle East. However, a blueprint for placing energy independence in the context of the so-called U.S. “pivot to Asia” has yet to emerge. New roles and

functions for the U .S.-Japan alliance should be designed in the context of U.S. energy independence. Today

in Northeast Asia, the energy security environment is rapidly changing with impending new challenges for the U.S.-Japan alliance to tackle.¶ First, the rise of China with its surging energy demand has raised concerns about its impact on the global energy market. According to estimates published by the International Energy Agency in its November 2012 World Energy Outlook 2012, China is forecasted to account for more than half of increases in global oil demand by 2030; its dependence on imported oil will increase from 54 percent in 2011 to 77 percent in 2030. Likewise, China is projected to account for about 28 percent of increases in global demand for natural gas with its import dependence to rise from 14 percent

in 2010 to 44 percent in 2030. Its impact on global oil prices and thus on the growth of the world economy would be considerable. Furthermore, Beijing’s anxiety about ensuring stable access to energy resources may stimulate the expansion of P eoples’ Liberation

Army Navy’s power projection capabilities, as a means to increase and secure access to overseas oil and natural gas supplies.¶ The deepening of

China’s economic interdependence with both the United States and Japan is unstoppable in the foreseeable future. Steady growth of the Chinese economy, which requires finding a solution to the upsurge in China’s energy demand , is of great significance to the U nited States and Japan . In this regard, the two allies should explore possibilities for strengthening cooperation with China in a number of areas, especially energy efficiency, clean energy, and nuclear power generation. Outside (or uninformed) observers of

Sino-Japanese relations tend to be overwhelmed by the contemporary geopolitical dispute and rising nationalism that fill the

headlines, and overlook the fact that Beijing and Tokyo have developed extensive cooperation in the energy sector, including on energy conservation and clean energy technologies, for more than three decades. Japan can share its rich experiences in

energy and environmental projects in China with the United States to capitalize on the recent success of Sino-U.S. clean energy cooperation. Beyond the business benefits, such collaboration could have invaluable political implications . If the

three biggest energy consumers in the world could find a joint flagship project it could help create a new international framework for engaging China.¶ From the standpoint of reducing hydrocarbon consumption and carbon dioxide emissions, the U.S.-Japan “nuclear twins” should pursue nuclear cooperation with China, which has 18 nuclear power plants currently in operation. The nuclear stakes in China are about to get much bigger: there are about 30 reactors under construction and more than 50 in the planning stage. This expansion is of global importance. Successful growth in nuclear power generation would reduce China’s hydrocarbon consumption and GHG emissions, and operational safety of the plants amidst such a rush of construction is an obvious concern.¶

Secondly, Russia has devoted every effort to enhance its presence in the Asia-Pacific region , taking advantage of

hosting the 2012 APEC Summit in Vladivostok last September. Moscow is anxious to accelerate the development of untapped hydrocarbon resources in the eastern regions of the country as a way to gain new business opportunities while enhancing its geopolitical influence in Northeast Asia. The 4700 km crude oil pipeline from Eastern Siberia to the Pacific Ocean (ESPO) was completed in December 2012. Russia currently exports about 0.6 million barrels per day by the ESPO pipeline, but aims to increase the volume as much as possible.¶ The U.S. shale gas revolution came as a harsh blow to Moscow, given that Russia is frustrated by the gradual decreases of its natural gas exports to Europe as consumption there declines and the EU seeks diversification of natural gas supply routes. The Sakhalin-2 is the only LNG project in Russia, as of today, with a maximum capacity of exporting 9.6 million tons per year; a new LNG plant in Vladivostok is in the planning stages. In recent months Russia has aggressively approached Japan, China, and the Republic of Korea to strengthen partnerships in oil and gas sectors.¶ Meanwhile, the United States already has a bastion in the energy landscape of Northeast Asia, with ExxonMobil as the operator of the Sakhalin-1 project. The destination of natural gas exports from the project has remained undecided due to conflicts of interest between ExxonMobil and Russia’s state-owned gas company, Gazprom, which has monopolized Russia’s natural gas exports to date. Yet, while President Putin has recently disclosed a plan to liberalize the natural gas export market, the state-owned oil company, Rosneft, has galvanized itself to find new foreign partners. It has expanded agreements with ExxonMobil, addressing new oil and gas projects in Russia’s Far Eastern and Arctic regions, and has acquired a stake in Exxon’s gas project in Alaska.¶ However, Russia does not yet seem to have emerged as a factor in the U.S. pivot to Asia. Especially since the collapse of the former Soviet Union and the demise of the Soviet military threat in the Asia-Pacific, Washington’s approach to Russia has been overwhelmingly Euro-

centric. Russia’s aggressive move to the Asia-Pacific region in the energy sector should be taken into account, when we imagine diplomatic implications of U.S. energy independence for this region. Obviously,

one of the impetuses of Russia’s rapid move to the east is Moscow’s concern about the rise of China. Notwithstanding the economic benefit of the drastic increase in oil trade volumes with China, voices among the Russian power elite are gradually emerging to alarm that Russia might become a “resource appendage” to its neighboring geopolitical rival . It should be noted, however, that increasing hydrocarbon exports from Russia’s eastern regions would also be one of the ways in which the impact of China’s explosive energy needs upon the global energy market can be reduced peacefully. U.S. and Japanese policymakers should consider this point when they discuss Russia’s role as a big energy supplier in the context of energy security in the

Asia-Pacific region.¶ Energy security in the Asia-Pacific region entails numerous uncertainties in both energy markets and geopolitical dynamism. The robust U.S.-Japan alliance must be anchored in solving energy challenges, but this requires clarification of Tokyo’s post-Fukushima energy policies including an internationally responsible political decision on restarting Japan’s nuclear power plants. Wisdom

and long-term perspectives are needed to reduce the economic and security costs of ensuring regional stability in the years to come. It is high time for the U nited S tates and Japan to begin to design a roadmap for a n international framework of energy security in which other regional key players such as China and Russia are effectively engaged .

Scenario 1 is Senkaku Conflict

Senkaku conflict’s likely due to energy concerns --- escalates and goes nuclear --- only a reinvigorated US-Japan alliance solves Michael Klare 13 is a professor of peace and world security studies at Hampshire College, “The Next War”, http://www.realclearworld.com/articles/2013/01/23/the_next_war_100500.html

US-China War Due to nationalism and resources and geopolitical concerns

Don't look now, but conditions are deteriorating in the western Pacific. Things are turning ugly, with consequences that could prove deadly and spell catastrophe for the global economy.¶ In Washington, it is widely assumed that a showdown with Iran over its nuclear ambitions will be the first major crisis to engulf the next secretary of defense -- whether it be former Senator Chuck Hagel, as President Obama desires, or someone else if he fails to win Senate confirmation. With few signs of an imminent breakthrough in talks aimed at peacefully resolving the Iranian nuclear issue, many analysts believe that military action -- if not by Israel, then by the United States -- could be on this year's agenda.¶ Lurking just

behind the Iranian imbroglio, however, is a potential crisis of far greater magnitude , and potentially far more imminent than most of us imagine. China's determination to assert control over disputed islands in the potentially energy-rich waters of the East and South China Seas, in the face of stiffening resistance from Japan and the Philippines along with greater regional assertiveness by the United States, spells trouble not just regionally, but potentially globally . ¶ Islands, Islands, Everywhere¶ The possibility of an Iranian crisis remains in the spotlight

because of the obvious risk of disorder in the Greater Middle East and its threat to global oil production and shipping. A crisis in the East or South China Seas (essentially, western extensions of the Pacific Ocean) would, however, pose a greater peril because of the possibility of a U.S.-China military confrontation and the threat to Asian economic stability. ¶ The United States is bound by treaty to come to the assistance of Japan or the Philippines if either country is attacked by a third party, so any armed clash between Chinese and Japanese or Filipino forces could trigger American military intervention . With so much of the world's trade focused on Asia, and the American, Chinese, and Japanese economies tied so closely together in ways too essential to ignore, a clash of almost any sort in these vital waterways might paralyze international commerce and trigger a global recession (or worse).¶ All of this should be painfully obvious and so rule out such a possibility -- and yet the likelihood of such a clash occurring has been on the rise in recent months, as China and its neighbors continue to ratchet up the bellicosity of their statements and bolster their military forces in the contested areas . Washington's continuing statements about its ongoing plans for a "pivot" to, or "rebalancing" of, its forces in the Pacific have only fueled Chinese intransigence and intensified a rising sense of crisis in the region. Leaders on all sides continue to affirm their country's inviolable rights to the contested islands and vow to use any means necessary to resist encroachment by rival claimants. In the meantime, China has increased the frequency and scale of its naval maneuvers in waters claimed by Japan, Vietnam, and the Philippines, further enflaming tensions in the region. ¶ Ostensibly, these disputes revolve around the question of who owns a constellation of largely uninhabited atolls and islets claimed by a variety of nations. In the East China Sea, the islands in contention are called the Diaoyus by China and the Senkakus by Japan. At present, they are administered by Japan, but both countries claim sovereignty over them. In the South China Sea, several island groups are in contention, including the Spratly chain and the Paracel Islands (known in China as the Nansha and Xisha Islands, respectively). China claims all of these islets, while Vietnam claims some of the Spratlys and Paracels. Brunei, Malaysia, and the Philippines also claim some of the

Spratlys.¶ Far more is, of course, at stake than just the ownership of a few uninhabited islets. The seabeds surrounding them are believed to sit atop vast reserves of oil and natural gas. Ownership of the islands would naturally confer ownership of the reserves -- something all of these countries desperately desire . Powerful forces of nationalism are also at work: with rising popular fervor , the Chinese believe that the islands are part of their national territory and any other claims represent a direct assault on China's sovereign rights; the fact that Japan -- China's brutal invader and occupier during World War II -- is a rival claimant to some of them only adds a powerful tinge of victimhood to Chinese nationalism and intransigence on the issue. By the same token, the

Japanese, Vietnamese, and Filipinos, already feeling threatened by China's growing wealth and power, believe no less firmly that not bending on the island disputes is an essential expression of their nationhood. ¶ Long ongoing, these disputes have escalated recently . In May 2011, for instance, the Vietnamese reported that Chinese warships were harassing oil-exploration vessels operated by the state-owned energy company PetroVietnam in the South China Sea. In two instances, Vietnamese authorities claimed, cables attached to underwater survey equipment were purposely slashed. In April 2012, armed Chinese marine surveillance ships blocked efforts by Filipino vessels to inspect Chinese boats suspected of illegally fishing off Scarborough Shoal, an islet in the

South China Sea claimed by both countries.¶ The East China Sea has similarly witnessed tense encounters of late. Last September, for example, Japanese authorities arrested 14 Chinese citizens who had attempted to land on one of the Diaoyu/Senkaku Islands to

press their country's claims, provoking widespread anti-Japanese protests across China and a series of naval show-of-force operations by both sides in the disputed waters. ¶ Regional diplomacy, that classic way of settling disputes in a peaceful manner, has been under growing strain recently thanks to these maritime disputes and the accompanying military encounters. In July 2012, at the annual meeting of the Association of Southeast Asian

Nations (ASEAN), Asian leaders were unable to agree on a final communiqué, no matter how anodyne -- the first

time that had happened in the organization's 46-year history. Reportedly, consensus on a final document was thwarted when Cambodia, a close ally of China's, refused to endorse compromise language on a proposed "code of conduct" for resolving disputes in the South China Sea. Two months later, when Secretary of State Hillary Rodham Clinton visited Beijing in an attempt to promote negotiations on the disputes, she was reviled in the Chinese press, while officials there refused to cede any ground at all.¶ As 2012 ended and the New Year began,

the situation only deteriorated. On December 1st, officials in Hainan Province, which administers the Chinese-claimed islands in the South China Sea, announced a new policy for 2013: Chinese warships would now be empowered to stop, search, or simply repel foreign ships that entered the claimed waters and were suspected of conducting illegal activities ranging, assumedly, from fishing to oil drilling. This move

coincided with an increase in the size and frequency of Chinese naval deployments in the disputed areas.¶ On December 13th, the Japanese military scrambled F-15 fighter jets when a Chinese marine surveillance plane flew into airspace near the

Diaoyu/Senkaku Islands. Another worrisome incident occurred on January 8th, when four Chinese surveillance ships entered Japanese-controlled waters around those islands for 13 hours. Two days later, Japanese fighter jets were again scrambled when a Chinese surveillance plane returned to the islands. Chinese fighters then came in pursuit, the first

time supersonic jets from both sides flew over the disputed area. The Chinese clearly have little intention of backing down , having indicated that they will increase their air and naval deployments in the area, just as the Japanese are doing. ¶ Powder Keg in the Pacific ¶ While war clouds gather in the Pacific sky, the question remains: Why, pray

tell, is this happening now?¶ Several factors seem to be conspiring to heighten the risk of confrontation , including leadership changes in China and Japan, and a geopolitical reassessment by the United States. ¶

* In China, a new leadership team is placing renewed emphasis on military strength and on what might be called national assertiveness . At the 18th Party Congress of the Chinese Communist Party, held last November in Beijing, Xi Jinping was named both party head and chairman of the Central Military Commission, making him, in effect, the nation's foremost civilian and

military official. Since then, Xi has made several heavily publicized visits to assorted Chinese military units, all clearly intended to demonstrate the Communist Party's determination, under his leadership, to boost the capabilities and prestige of the country's army, navy, and air force. He has already linked this drive to his belief that his country should play a more vigorous and assertive role in the region and the world. ¶ In a speech to soldiers in the city of Huizhou, for example, Xi spoke of his "dream" of national rejuvenation: "This dream can be said to be a dream of a strong nation; and for the military, it is the dream of a strong military." Significantly, he used the trip to visit the Haikou, a destroyer assigned to the fleet responsible for patrolling the disputed waters of the South China Sea. As he spoke, a Chinese surveillance plane entered disputed air space over

the Diaoyu/Senkaku islands in the East China Sea, prompting Japan to scramble those F-15 fighter jets.¶ * In Japan, too, a new leadership team is placing renewed emphasis on military strength and national assertiveness. On December 16th, arch-nationalist Shinzo Abe returned to power as the nation's prime minister. Although he campaigned largely on economic issues,

promising to revive the country's lagging economy, Abe has made no secret of his intent to bolster the Japanese military and assume a tougher stance on the East China Sea dispute . ¶ In his first few weeks in office, Abe has already announced plans to increase military spending and review an official apology made by a former government official to women forced into sexual slavery by the Japanese military during World War II. These steps are sure to please Japan's rightists, but certain to inflame anti-

Japanese sentiment in China, Korea, and other countries it once occupied.¶ Equally worrisome, Abe promptly negotiated an agreement with the Philippines for greater cooperation on enhanced "maritime security" in the western Pacific, a move intended to counter growing Chinese assertiveness in the region. Inevitably, this will spark a harsh Chinese response -- and because the United States has mutual defense treaties with both countries, it

will also increase the risk of U.S. involvement in future engagements at sea. ¶ * In the United States, senior officials are debating implementation of the "Pacific pivot" announced by President Obama in a speech before the Australian Parliament a little over a year ago. In it, he promised that additional U.S. forces would be deployed in the region, even if that meant cutbacks elsewhere. "My guidance is clear," he declared. "As we plan and budget for the future, we will allocate the resources necessary to

maintain our strong military presence in this region." While Obama never quite said that his approach was intended to constrain the rise of China, few observers doubt that a policy of "containment" has returned to the Pacific. ¶ Indeed, the U.S. military has taken the first steps in this direction, announcing, for example, that by 2017 all three U.S. stealth planes, the F-22, F-35, and B-2, would be deployed to bases relatively near China and that by 2020 60% of U.S. naval forces will be stationed in the

Pacific (compared to 50% today). However, the nation's budget woes have led many analysts to question whether the Pentagon is actually capable of fully implementing the military part of any Asian pivot strategy in a meaningful way. A study conducted by the Center for Strategic and International Studies (CSIS) at the behest of Congress, released last summer, concluded that the Department of Defense "has not adequately articulated the strategy behind its force posture planning [in the Asia-

Pacific] nor aligned the strategy with resources in a way that reflects current budget realities."¶ This, in turn, has fueled a drive by military hawks to press the administration to spend more on Pacific-oriented forces and to play a more vigorous role in countering China's "bullying" behavior in the East and South China Seas. "[ America's Asian allies] are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia , or whether the region will again be dominated by belligerence and intimidation," former Secretary of the Navy and former Senator James Webb wrote in the Wall Street Journal. Although the administration has responded to such taunts by reaffirming its pledge to bolster its forces in the Pacific, this has failed to halt the calls for an even tougher posture by Washington. Obama has already been chided for failing to provide sufficient backing to Israel in its struggle

with Iran over nuclear weapons, and it is safe to assume that he will face even greater pressure to assist America's allies in Asia were they to be threatened by Chinese forces. ¶ Add these three developments together, and you have the makings of a powder keg -- potentially at least as explosive and dangerous to the global economy as any

confrontation with Iran. Right now, given the rising tensions, the first close encounter of the worst kind, in which,

say, shots were unexpectedly fired and lives lost, or a ship or plane went down, might be the equivalent of lighting a fuse in a crowded, over-armed room. Such an incident could occur almost any time . The Japanese press has reported that government officials there are ready to authorize fighter pilots to fire warning shots if Chinese aircraft penetrate the airspace over the Diaoyu/Senkaku islands. A Chinese general has said that such an act would count as the start of "actual combat." That the irrationality of such an event will be apparent to anyone who considers the deeply tangled economic relations among all these powers may prove no impediment to the situation -- as at the beginning of World War I -- simply spinning out of everyone's control . ¶ Can such a crisis be averted? Yes , if the leaders of China, Japan, and the U nited S tates, the key countries involved, take steps to defuse the belligerent and ultra- nationalistic pronouncements now holding sway and begin talk ing with one another about practical steps to resolve the disputes . Similarly, an emotional and unexpected gesture -- Prime Minister Abe, for instance, pulling a Nixon

and paying a surprise goodwill visit to China -- might carry the day and change the atmosphere. Should these minor disputes in the Pacific get out of hand , however, not just those directly involved but the whole planet will look with sadness and horror on the fail ure of everyone involved.

It will escalate --- accidents, unwillingness to back down, 2 biggest armies --- destabilizes the whole region Michael Auslin 13, scholar at the American Enterprise Institute, “The Sino–Japanese Standoff”, 1-28, http://www.nationalreview.com/blogs/print/338852

What was more dangerous, however, was a game of chicken that began in the waters off the Senkakus . Beijing

dispatched private fishing boats and maritime patrol vessels on a near-daily basis to the islands, and Japan responded with its coast guard. The two countries have now face d off regularly in the waters around the Senkakus, sometimes with a dozen ships or more. ¶ Beijing’s goal seems to be to undercut Tokyo’s claim of administrative control over the islands. That would then invalidate Japan’s right to expel ships from the exclusive economic zone around the Senkakus. In recent weeks, though, the Chinese have become more aggressive, and very visibly escalated tensions. For the first time ever, they have flown maritime patrol planes into Japanese airspace around the islands. A predictable cycle thus emerged: The Japan ese responded by scrambling F-15s, and last week, the Chinese sent two J-10 fighter jets to “monitor” Japanese military aircraft, according to the South China Morning Post. Now, the new

Japanese government of Prime Minister Shinzo Abe is preparing to go one step further: giving Japanese pilots the authority to fire warning shots with tracer bullets across the nose of any Chinese aircraft that doesn’t heed warnings to leave Japanese-controlled airspace.¶ It was barely a dozen years ago that the U.S. and China faced a crisis when a hotshot Chinese pilot collided with a U.S.

electronic-surveillance plane over the South China Sea, crashing both aircraft. Japan and China are now on a metaphorical collision course , too, and any accident when tensions are so high could be the spark in a tinderbox . It’s not difficult to see Beijing issuing orders for Chinese fighters to fire their own warning shots if Japanese jets start doing so. Even though leaders from both countries promise to meet and keep things cool, a faceoff at 20,000 feet is much harder to control than one done more slowly and clearly on the ocean’s surface. ¶ This Sino–Japanese standoff also is a problem for the U nited States, which has a defense treaty with Tokyo and is pledged to come to the aid of Japan ese forces under attack . There are also mechanisms for U.S.–Japanese consultations during a crisis, and if Tokyo requests such military talks, Washington would be forced into a difficult spot, since Beijing would undoubtedly perceive the holding of such talks as a serious provocation. The Obama administration has so far taken pains to stay neutral in the dispute; despite its rhetoric of “pivoting” to the Pacific, it has urged both sides to resolve the issue peacefully. Washington also has avoided any stance on the sovereignty of the Senkakus,

supporting instead the status quo of Japanese administration of the islands. That may no longer suffice for Japan, however, since its government

saw China’s taking to the air over the Senkakus as a significant escalation and proof that Beijing is in no mind to back down from its claims. ¶ One does not have to be an alarmist to see real dangers in play here.

As Barbara Tuchman showed in her classic The Guns of August, events have a way of tak ing on a life of their own (and one

doesn’t need a Schlieffen Plan to feel trapped into acting). The enmity between Japan and China is deep and pervasive; there is little good will to try and avert conflict . Indeed, the people of both countries have abysmally low perceptions of the other. Since they are the two most advanced militaries in Asia , any tension-driven military jockeying between them is inherently destabilizing to the entire region. ¶ Perhaps of even greater

concern, neither government has shied away from its hardline tactics over the Senkakus, despite the fact that trade between the two has dropped nearly 4 percent since the crisis began in September. Most worrying, if the two sides don’t agree to return to the status quo ante, there are only one or two more rungs on the ladder of military escalation before someone has to back down or decide to initiate hostilities when challenged.

Whoever does back down will lose an enormous amount of credibility in Asia, and the possibility of major domestic demonstrations in response.¶ The prospect of an armed clash between Asia’s two largest countries is one that should bring both sides to their senses, but instead the two seem to be maneuvering themselves into a corner from which it will be difficult to escape. One trigger-happy or nervous pilot, and Asia could face its gravest crisis perhaps since World War II.

1AC – Plan The United States federal government should substantially increase its leases for drilling in its exclusive economic zone.

1AC – Solvency98% of oil is off limits nowPyle 12 President of the Institute for Energy Research and the American Energy Alliance (Thomas, “PYLE: Energy Department sneaks offshore moratorium past public”, 7/9/12, The Washington Times, http://www.washingtontimes.com/news/2012/jul/9/energy-department-sneaks-offshore-moratorium-past-/)

While the Obama administration was taking a victory lap last week after the 5-4 Supreme Court decision to uphold

the president’s signature legislative accomplishment, Obamacare, the Interior Department was using the media black hole to release a much-awaited five-

year plan for offshore drilling. That plan reinstitutes a 30-year moratorium on offshore energy exploration that will keep our most promising resources locked away until long after President Obama begins plans for his presidential library. Given the timing, it is clear that the self-described “all of the above” energy president didn’t want the American people to discover that he was denying access to nearly 98 percent of America’s vast energy potential on the Outer Continental Shel f (OCS). The Outer Continental Shelf Lands

Act (OCSLA) of 1953 provided the interior secretary with the authority to administer mineral exploration and development off our nation’s coastlines. At its most basic level, the act empowers the interior secretary - in this

case, former U.S. Sen. Kenneth L. Salazar of Colorado - to provide oil and gas leases to the highest-qualified bidder while establishing guidelines for implementing an oil and gas exploration-and-development program for the Outer Continental Shelf. In 1978, in the wake of the oil crisis and spiking gasoline prices, Congress amended the act to require a series of five-year plans that provide a schedule for the sale of oil and gas leases to meet America’s national energy needs. But since

taking office, Mr. Obama and Mr. Salazar have worked to restrict access to our offshore oil and gas resources by canceling lease sales, delaying others and creating an atmosphere of uncertainty about America’s future offshore development that has left job creators looking for other countries’ waters to host their offshore rigs . More than 3 1/2

years into the Obama regime, nearly 86 billion barrels of undiscovered oil on the Outer Continental Shelf remain off-limits to Americans. Alaska alone has about 24 billion barrels of oil in unleased federal waters. The Commonwealth of Virginia - where Mr. Obama has reversed policies that would have allowed offshore development - is home to 130 million barrels of offshore oil and

1.14 trillion cubic feet of natural gas. But thanks to the president, Virginians will have to wait at least another five years before they can begin creating the jobs that will unlock their offshore resources. Once you add those restrictions to the vast amount of shale oil that is being blocked, the

administration has embargoed nearly 200 years of domestic oil supply. No wonder the administration wanted to slip its plan for the OCS under the radar when the whole country was focused on the health care decision. But facts are stubborn things, and the Obama administration cannot run forever from its abysmal energy record . In the past three years, the government has collected more than 250 times less revenue from offshore lease sales than it did during the last year of the George W. Bush administration - down from $9.48 billion in 2008 to a paltry $36 million last year. Meanwhile, oil production on federal lands dropped 13 percent last year, and the number of annual leases is down more than 50 percent from the Clinton era . Under the new Obama plan, those numbers will only get worse. The 2012-17 plan leaves out the entire Atlantic

and Pacific coasts and the vast majority of OCS areas off Alaska. It cuts in half the average number of lease sales per year, requires higher minimum bids and shorter lease periods and dramatically reduces lease terms. Yet, somehow, we’re supposed to believe that our “all of the above” president is responsible for increased production and reduced oil import. With oil hovering around $85 a barrel and nationwide gas prices nearly double what they were when Mr. Obama took office, you’d think the administration might implement a sensible plan to promote robust job

creation and safe offshore energy development. Instead, what we get is the latest phase in the Obama administration’s war on affordable energy, filed under cover of media darkness while the nation was swallowing its Obamacare medicine.

Academic debate over energy policy in the face of environmental destruction is critical to shape the direction of change and create a public consciousness shift---the K’s esoteric abstractions allow for extinction---action now is keyCrist 4 (Eileen, Professor at Virginia Tech in the Department of Science and Technology, “Against the social construction of nature and wilderness”, Environmental Ethics 26;1, p 13-6, http://www.sts.vt.edu/faculty/crist/againstsocialconstruction.pdf)

Yet, constructivist analyses of "nature" favor remaining in the comfort zone of zestless agnosticism and noncommittal meta-discourse. As David Kidner suggests, this intellectual stance may function as a mechanism against facing the devastation of the biosphere—an undertaking long underway but gathering momentum

with the imminent bottlenecking of a triumphant global consumerism and unprecedented population levels. Human-driven extinction—in

the ballpark of Wilson's estimated 27,000 species per year—is so unthinkable a fact that choosing to ignore it may well be the psychologically risk-free option. Nevertheless, this is the opportune historical moment for intellectuals in the humanities and social sciences to join forces with conservation scientists in order to help

create the consciousness shift and policy changes to stop this irreversible destruction . Given this outlook, how students in the human sciences are trained to regard scientific knowledge, and what kind of

messages percolate to the public from the academy about the nature of scientific findings, matter immensely . The "agnostic stance " of constructivism toward "scientific claims" about the environment—a stance supposedly mandatory for discerning how scientific knowledge is "socially assembled"[32]—is, to borrow a

legendary one-liner, striving to interpret the world at an hour that is pressingly calling us to change it.

Lifting the moratorium balances supply forcesGriles 3 [Lisa, Deputy Secretary, Department of the Interior, “Energy Production on Federal Lands,” Hearing before the Committee on Energy and Natural Resources, United States Senate]

Mr. GRILES. America’s public lands have an abundant opportunity for exploration and development of renewable and nonrenewable

energy resources. Energy reserves contained on the Department of the Interior’s onshore and offshore Federal lands are very important to meeting our current and future estimates of what it is going to take to continue to

supply America’s energy demand. Estimates suggest that these lands contain approximately 68 percent of the undiscovered U.S. oil resources and 74 percent of the undiscovered natural gas resources. President Bush has developed a national energy policy that laid out a comprehensive, long-term energy strategy for America’s future. That

strategy recognizes we need to raise domestic production of energy , both renewable and nonrenewable, to meet our dependence for energy.

For oil and gas, the United States uses about 7 billion barrels a year, of which about 4 billion are currently imported and 3 billion are domestically produced. The President proposed to open a small portion of the Arctic National Wildlife Refuge to environmentally responsible oil and gas exploration. Now there is a new and environmentally friendly technology, similar to directional drilling, with mobile platforms, self-containing drilling units. These things will allow producers to access large energy reserves with almost no footprint on the tundra. Each day, even since I have assumed this job, our ability to minimize our effect on the environment continues to improve to where it is almost nonexistent in such areas as even in Alaska. According to the latest oil and gas assessment, ANWR is the largest untapped source of domestic production available to us. The production for ANWR would equal about 60 years of imports from Iraq. The National Energy Policy also encourages development of cleaner, more diverse portfolios of domestic renewable energy sources. The renewable policy in areas cover geothermal, wind, solar, and biomass. And it urges research on hydrogen as an alternate energy source. To advance the National Energy Policy, the Bureau of Land Management and the DOE’s National Renewable Energy Lab last week announced the release of a renewable energy report. It identifies and evaluates renewable energy resources on public lands. Mr. Chairman, I would like to submit this for the record.* This report, which has just come out, assess the potential for renewable energy on public lands. It is a very good report that we hope will allow for the private sector, after working with the various other agencies, to where can we best use renewable resource, and how do we take this assessment and put it into the land use planning that we are currently going, so that right-of-ways and understanding of what renewable resources can be done in the West can, in fact, have a better opportunity. The Department completed the first of an energy inventory this year. Now the EPCA report, which is laying here, also, Mr. Chairman, is an estimate of the undiscovered, technically recoverable oil and gas. Part one of that report covers five oil and gas basins. The second part of the report will be out later this year. Now this report, it is not—there are people who have different opinions of it. But the fact is we believe it will be a good guidance tool, as we look at where the oil and gas potential is and where we need to do land use planning. And as we update these land use plannings and do our EISs, that will help guide further the private sector, the public sector, and all stakeholders on how we can better do land use planning and develop oil and gas in a sound fashion. Also, I have laying here in front of me the two EISs that have been done on the two major coal methane basins in the United States, San Juan Basis and the Powder River Basin. Completing these reports, which are in draft, will increase and offer the opportunity for production of natural gas with coal bed methane. Now these reports are in draft and, once completed, will authorize and allow for additional exploration and development. It has taken 2 years to get these in place. It has taken 2 years to get some of these in place. This planning process that Congress has initiated under FLPMA and other statutes allows for a deliberative, conscious understanding of what the impacts are. We believe that when these are finalized, that is in fact what will occur. One of the areas which we believe that the Department of the Interior and the Bureau of Land Management is and is going to engage in is coordination with landowners. Mr. Chairman, the private sector in the oil and gas industry must be good neighbors with the ranchers in the West. The BLM is going to be addressing the issues of bonding requirements that will assure that landowners have their surface rights and their values protected. BLM is working to make the consultation process with the landowners, with the States and local governments and other Federal agencies more efficient and meaningful. But we must assure that the surface owners are protected and the values of their ranches are in fact assured. And by being good neighbors, we can do that. In the BLM land use planning process, we have priorities, ten current resource management planning areas that contain the major oil and gas reserves that are reported out in the EPCA study. Once this process is completed, then we can move forward with consideration of development of the natural gas. We are also working with the Western Governors’ Association and the Western Utilities Group. The purpose is to identify and designate right-of-way corridors on public lands. We would like to do it now as to where right-of-way corridors make sense and put those in our land use planning

processes, so that when the need is truly identified, utilities, energy companies, and the public will know where they are Instead of taking two years to amend a land use plan, hopefully this will expedite and have future opportunity so that when the need is there, we can go ahead and make that investment through the private sector. It should speed up the process of right-of-way permits for both pipelines and electric transmission. Now let me switch to the offshore, the Outer Continental Shelf. It is a huge contributor to our Nation’s energy and economic security. The CHAIRMAN. Mr. Secretary, everything you have talked about so far is onshore. Mr. GRILES. That is correct. The CHAIRMAN. You now will speak to offshore. Mr. GRILES. Yes, sir, I will. Now we

are keeping on schedule the holding lease sales in the areas that are available for leasing. In the past year, scheduled sales in several areas were either delayed,

canceled, or put under moratoria, even though they were in the 5-year plan. It undermined certainty . It made investing, particularly in the Gulf, more risky. We have approved a 5-year oil and gas leasing program in July 2002 that calls for 20 new lease sales in the Gulf of Mexico and several other areas of the offshore, specifically in Alaska by 2007.

Now our estimates indicate that these areas contain resources up to 22 billion barrels of oil and 61 trillion cubic feet of natural gas. We are also acting to raise energy production from these offshore areas by providing royalty relief on the OCS leases for new deep wells that are drilled in

shallow water. These are at depths that heretofore were very and are very costly to produce from and costly to drill to. We need to encourage that exploration. These deep wells, which are greater

than 15,000 feet in depth, are expected to access between 5 to 20 trillion cubic feet of natural gas and can be developed quickly due to existing infrastructure and the shallow water . We have also issued a final rule in July 2002 that allows companies to apply for a lease extension, giving them more time to analyze complex geological data that underlies salt domes. That is, where geologically salt overlays the geologically clay. And you try to do seismic, and the seismic just gets distorted. So we have extended the lease terms, so that hopefully those companies can figure out where and where to best drill . Vast resources of oil and

natural gas lie, we hope, beneath these sheets of salt in the OCS in the Gulf of Mexico. But it is very difficult to get clear seismic images. We are also working to create a process of reviewing and

permitting alternative energy sources on the OCS lands. We have sent legislation to Congress that would give the Minerals Management Service of the Department

of the Interior clear authority to lease parts of the OCS for renewable energy. The renewables could be wind, wave, or solar energy, and related projects that are auxiliary to oil and gas development, such as offshore

staging facilities and emergency medical facilities. We need this authority in order to be able to truly give the private sector what are the rules to play from and buy, so they can have certainty about where to go.