The Economist - USA (2020-08-22)

The EconomistAugust 22nd 2020 United States 27

YouTubeto Bankof America.Cainiao,a

Chineselogisticsnetwork,iscapitalising

onthepandemictoexpand,aimingtode-

livergoodsanywhereintheworldwithin

72 hours.Itwillcollectlotsofdatainthe

process. Tencent, which owns WeChat,

makes some popular war-based video

gamesthroughsubsidiarycompanies.Itis

easytoconstrueallthisasa threat.

Thepandemichasinflatedtheshareof

American economic activity carried out

digitally.Thisraisesthestakes.Butthere

aresolutionsthatdonotrelyonresigna-

tiontoforeigninfluence.Oneistocarryout

thelessclandestinebitsofnational-securi-

typolicyinthedigitaldomainmoretrans-

parently,lettingthepublic,andtherebyin-

vestors,understandtherulesunderwhich

thegovernmentisoperating.Thoserules

oughtalsotobeappliedconsistently,creat-

inga stablebusinessenvironment.Where

thereisrealevidenceofstateespionage,or

cyber attacks, or where the welfare of

Americansisdirectlyatrisk,thefulltrap-

pingsofnationalsecurityshouldremain.

Multilateralismisalsoimportant.Bybind-

ingalliesintothesamesetofrulesforthe

digital economy,America could prevent

theself-harmthatcomeswithunilateral-

ism.Globalinvestorswouldhavenochoice

buttofollowtherules.

Withoutthesechanges,Americamay

onedayencountera paradox:theinvoca-

tion of national-security doctrine inits

currentformriskshavinga negativeim-

pactonthenation’ssecurity.Becausewhen

everythingbecomesamatterofnational

security,then,intheend,nothingis. 7

F

oramericansstillcoopedupbytheco-

vid-19 epidemic, the Arctic National

WildlifeRefugeinnorthernAlaskaisthe

stuffof dreams.Onarecent raftingtrip

downtheHulahulariverintherefugeRob-

ertThompson,anInupiaqguide,saw1,000

caribouanda dozenbearsandwolveson

tundrathatstretchedupintohighmoun-

tainpeaksundera bigsky.OnAugust17th

theusDepartmentoftheInteriorreleased

a plantomake1.6macresoftherefuge’s

coastalplainavailableforoilandgasexplo-

rationanddevelopment.

MrThompson,wholivesinKaktovik,a

tinyvillagewithintherefuge,seestheim-

pacteverydayofclimatechange,whichis

warmingtheArctictwiceasfastastherest

oftheplanet.Thegroundnearhishouse

has collapsed as the permafrost thaws.

Morepolarbearsareprowlingaroundbe-

causetheirsea-icehabitatisdisappearing.

MrThompsonhashadtoshoottwothat

chased him to his front door. And in-

creasedcoastalerosionhasswallowed 400

feetofhisfamily’sproperty.

Thefederalstudythatpavedthewayfor

thedrillingannouncementassumesthat

oilproductionintherefugewilllastfor 70

years. But a government assessment in

2018 hasalreadydeterminedthat,without

rapid reductions in carbon emissions,

warmingtemperatureswillkillthousands

ofAmericansannually.“Iwonderwhatthe

heck[ourdescendants]aregoingtothink

ofuswhenwe’resaying‘Drill,baby,drill’,”

says73-year-oldMrThompson.

ProductiononAlaska’sNorthSlopecur-

rentlysatisfiesabout 2% of the country’s

dailyappetiteforoil from existing fields,

whichlieabout 100 miles west of the ref-

uge.TheTrumpadministration is blazing

aheadwithnewdevelopment despite the

climate implications and polling that

showstwo-thirdsofAmerican voters op-

posedrillingintheArctic preserve.

Investmentinthe region also looks in-

creasinglydicey.North Slope crude prices

dippedintonegativeterritory in the spring

becauseofthepandemic shutdown, and

they remain weak. bp, one of the pioneers

on Alaska’s North Slope, is leaving the re-

gion. A number of big banks have bowed to

public pressure and stepped back from in-

vesting in Arctic oil development, includ-

ing Goldman Sachs, JPMorgan Chase, Wells

Fargo, ubsand Deutsche Bank.

Warming temperatures are also in-

creasing the already high cost of doing

business in this remote place. Existing oil

and gas infrastructure is designed for

freezing temperatures—a climate that is

becoming a relic of decades past. Winter—

the season of ice and snow-roads, which

ease transport and construction in this vast

northern terrain that is nearly equal parts

land and water—is a month shorter than it

used to be. Melting permafrost has already

triggered leaks and may put hundreds of

wellheads at risk of failure.

The Arctic refuge provides crucial habi-

tat for the Porcupine caribou herd, a critical

resource for the Gwich’in people, as well as

a useful one for coastal Inupiaq like Mr

Thompson. “Nobody has ever told me

where I’ll be able to do subsistence hunting

if they sell off the land to the oil compa-

nies,” he says.

In short, the project makes neither eco-

nomic nor environmental sense. As pure

politics it does have something in its fa-

vour, at least for the president. The push to

park drill rigs in the refuge would fulfil his

campaign promise to boost domestic ener-

gy production, whereas Joe Biden, the

Democratic nominee, promises net zero

greenhouse-gas emissions by 2050, in part

by reducing reliance on fossil fuels. The

president’s appetite for destruction in the

Arctic, in other words, probably has more

to do with winning Pennsylvania and other

swing states that pit frackers against envi-

ronmentalists than anything else. 7

KAKTOVIK,ALASKA

Drillingina wildliferefugeisthehydroxychloroquineofenergy policy

TheArctic

Drillmusic

Nice spot for a rig

2