Guggenheim Partners announces Arctic investment fund

Environmentalists fear the move by the privately held investment firm based in the US will accelerate exploitation of the region

Leo Hickman
guardian.co.uk

Guggenheim Partners, a privately held investment firm based in the US, which manages more than $125bn worth of assets on behalf of its clients, has confirmed it is setting up a new fund dedicated to making investments in the Arctic region.

The news has been criticised by environmentalists who fear that it will further accelerate the exploitation by oil and shipping companies of the region which is being made even more accessible by climate change.

The fund was first revealed over the weekend at a conference held by the Juneau World Affairs Council in the Alaskan capital on the “politics of climate change“. Alice Rogoff, the publisher of Alaska Dispatch who is married to one of America’s wealthiest men, Carlyle Group co-founder David Rubenstein, told the conference that she had learned Guggenheim Partners was planning a fund “worth billions”. She added that it might concentrate first on building a privately funded icebreaker, which could then be leased to the US coastguard.

There have been growing calls in Alaska for a $1bn “heavy” ice breaker which could be used not just to help tackle any possible oil spills and perform search and rescue duties, but also further secure new shipping routes into the area. Shell confirmed last year that it is already building two of its own icebreakers in preparation of it being granted an extended permit to drill in the Chukchi and Beaufort seas from next year onwards.

Mead Treadwell, Alaska’s lieutenant general, said the fund was a “major announcement” for the region, adding that the Alaskan Arctic also currently lacks a deepwater port. Without such a port available, he said, oil companies would incur extra costs by having to supply a “flotilla” of support vessels when drilling at sea.

The Guggenheim Partners website posted a link to an Alaska Dispatch story about the fund, but a company spokesman refused to provide any specific details. “We are in the very early planning stages for an Arctic investment fund,” said Jeffrey Kelley. “At this point in time it would be premature to comment further about potential structure or investment parameters.”

A permanently secured route through the Bering Strait up into the Arctic would be a major boon to shipping companies and resource extractors. Last month, Nordic Bulk Carriers, a Danish shipping company, said it would save a third of its usual costs and nearly half the time shipping goods if a route to China was available through the Arctic instead of via the Suez Canal and the Indian Ocean.

Ben Ayliffe, an Arctic campaigner for Greenpeace, criticized the fund: “We shouldn’t be surprised that the industry which got us into the worst global economic crisis in living memory now has the planet’s last great wilderness in its sights. But, even by its own standards, it would seem exceedingly short-sighted to pour billions of dollars into the extraction of climate-changing fossil fuels just as scientists warn that the Arctic’s summer sea ice is entering what they call a ‘death spiral’.”

Greenpeace is campaigning for the Arctic to be better protected.

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USA: BOEMRE Awards USD 5.6 Million for Environmental Study of Hanna Shoal

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) announced it has signed a cooperative agreement with the University of Texas at Austin and a team of highly qualified and experienced Arctic researchers for a comprehensive study of the Hanna Shoal ecosystem in the Chukchi Sea off Alaska’s northwest coast. The study will be conducted from 2011-2016 and is expected to cost $5,645,168.

Ongoing studies have highlighted Hanna Shoal as an important biological ecosystem between the Chukchi Sea and Arctic Ocean waters. BOEMRE analysts and decision makers will use the information developed by this study in future National Environmental Policy Act analyses and decision-making regarding potential energy development in the Chukchi Sea.

“Over the course of many years, we have devoted substantial resources to promote better understanding of the Arctic environment,” said BOEMRE Director Michael R. Bromwich. “This five-year study will greatly contribute to the body of knowledge regarding the biological diversity of the Hanna Shoal area and will provide additional valuable information about the ecosystem that supports marine life.”

The main objectives of the study are to identify and measure important physical and biological processes that contribute to the high concentration of marine life in the Hanna Shoal area. The study will document physical and oceanographic features, ice conditions, and information concerning local species. BOEMRE will integrate data gained from this study with other relevant Chukchi Sea studies to provide a more complete understanding of environmental considerations such as food web and contaminant bioaccumulations.

Dr. Kenneth H. Dunton, University of Texas at Austin, will serve as Principal Investigator. His team will include researchers from the Florida Institute of Technology, Old Dominion University, the University of Alaska Fairbanks, the University of Maryland, the University of Rhode Island​, and the Woods Hole Oceanographic Institution. BOEMRE will be involved in all phases of the study, including substantial input to the field research design and coordinating with other research efforts in the Chukchi Sea to ensure BOEMRE information needs are met. BOEMRE staff may also participate in field cruises, field data interpretations and analyses, and in writing articles that flow from research that will be conducted under this cooperative agreement.

Although BOEMRE developed the Hanna Shoal study parameters in 2010, the study will also address several issues raised by the U.S. Geological Survey June 2011 report, An Evaluation of the Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska.

Since the early 1970s, BOEMRE and its predecessor organizations have funded more than $340 million in studies in Alaska. The Hannah Shoal study is one of approximately 40 ongoing studies the bureau’s Alaska Region is currently coordinating and managing. The bureau’s Environmental Studies Program conducts and oversees world-class, scientific research to inform policy decisions regarding leasing and development of OCS energy and mineral resources.

Original Article

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