[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] THE NORTHERN NORTHERN BORDER: HOMELAND SECURITY PRIORITIES IN THE ARCTIC, PART II ======================================================================= HEARING before the SUBCOMMITTEE ON TRANSPORTATION AND MARITIME SECURITY of the COMMITTEE ON HOMELAND SECURITY HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ FEBRUARY 5, 2020 __________ Serial No. 116-59 __________ Printed for the use of the Committee on Homeland Security [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 41-304 PDF WASHINGTON : 2020 COMMITTEE ON HOMELAND SECURITY Bennie G. Thompson, Mississippi, Chairman Sheila Jackson Lee, Texas Mike Rogers, Alabama James R. Langevin, Rhode Island Peter T. King, New York Cedric L. Richmond, Louisiana Michael T. McCaul, Texas Donald M. Payne, Jr., New Jersey John Katko, New York Kathleen M. Rice, New York Mark Walker, North Carolina J. Luis Correa, California Clay Higgins, Louisiana Xochitl Torres Small, New Mexico Debbie Lesko, Arizona Max Rose, New York Mark Green, Tennessee Lauren Underwood, Illinois John Joyce, Pennsylvania Elissa Slotkin, Michigan Dan Crenshaw, Texas Emanuel Cleaver, Missouri Michael Guest, Mississippi Al Green, Texas Dan Bishop, North Carolina Yvette D. Clarke, New York Jefferson Van Drew, New Jersey Dina Titus, Nevada Bonnie Watson Coleman, New Jersey Nanette Diaz Barragan, California Val Butler Demings, Florida Hope Goins, Staff Director Chris Vieson, Minority Staff Director ------ SUBCOMMITTEE ON TRANSPORTATION AND MARITIME SECURITY J. Luis Correa, California, Chairman Emanuel Cleaver, Missouri Debbie Lesko, Arizona, Ranking Dina Titus, Nevada Member Bonnie Watson Coleman, New Jersey John Katko, New York Nanette Diaz Barragan, California Dan Bishop, North Carolina Val Butler Deming, Florida Jefferson Van Drew, New Jersey Bennie G. Thompson, Mississippi (ex Mike Rogers, Alabama (ex officio) officio) Alex Marston, Subcomittee Staff Director Kyle Klein, Minority Subcomittee Staff Director C O N T E N T S ---------- Page Statements The Honorable J. Luis Correa, a Representative in Congress From the State of California, and Chairman, Subcommittee on Transportation and Maritime Security: Oral Statement................................................. 1 Prepared Statement............................................. 3 The Honorable Debbie Lesko, a Representative in Congress From the State of Arizona, and Ranking Member, Subcommittee on Transportation and Maritime Security: Oral Statement................................................. 3 Prepared Statement............................................. 5 The Honorable Bennie G. Thompson, a Representative in Congress From the State of Mississippi, and Chairman, Committee on Homeland Security: Prepared Statement............................................. 5 Witnesses Admiral Charles W. Ray, Vice Commandant, U.S. Coast Guard: Oral Statement................................................. 6 Prepared Statement............................................. 8 Mr. Michael J. Murphy, Deputy Assistant Secretary for European and Eurasian Affairs, U.S. Department of State: Oral Statement................................................. 14 Prepared Statement............................................. 16 Ms. Marie A. Mak, Director for Contracting & National Security Acquisitions, U.S. Government Accountability Office: Oral Statement................................................. 18 Prepared Statement............................................. 20 THE NORTHERN NORTHERN BORDER: HOMELAND SECURITY PRIORITIES IN THE ARCTIC, PART II ---------- Wednesday, February 5, 2020 U.S. House of Representatives, Committee on Homeland Security, Subcommittee on Transportation and Maritime Security, Washington, DC. The subcommittee met, pursuant to notice, at 10:03 a.m., in Room 310, Cannon House Office Building, Hon. J. Correa (Chairman of the subcommittee) presiding. Present: Representatives Correa, Cleaver, Lesko, Katko, Bishop, and Drew. Mr. Correa. This committee will now come to order. The subcommittee is meeting today to receive testimony on the Northern Northern Border: Homeland Security Priorities in the Arctic, Part II. Without objection, the Chair is authorized to declare the subcommittee in recess at any point. I want to thank the Ranking Member Lesko and our panel of witnesses for joining us today, and I am going to take the credit, but I am going to give credit where credit is due. The Coast Guard had asked us to do this set of hearings on this issue months ago, and I think it is a good call. So thank you for bringing this issue to our attention. Today, we will discuss the U.S. Homeland Security priorities in the Arctic following a productive hearing with non-Government issues on this witness in September. We have seen the Arctic climate changing with diminishing ice openings and with maritime activity increasing in parts of the world that were essentially unnavigable and untouched in years before. It seems that we are ill-prepared for the changes brought about by a warmer climate in the Arctic. I am very concerned about the number of aggressive actions of other nations in the region, especially China and Russia. We in the United States, we have had a long history of supporting an internal rules-based order in order to foster a spirit of cooperation in the Arctic states. But in recent years, we have seen Russia expand its military installation in the area and expand its activities in the Arctic. They have invested heavily in assets to increase their maritime operations. Russia has the largest, or I should say a large fleet of icebreakers that numbers more than 50 and more on the way. China, that is more than 1,000 miles away from the area, has declared itself a near-Arctic state and is investing strategically in other Arctic nations to increase its presence and influence in the area. Russia and China seek economic interest in the region, rely heavily on opening up potential trade routes in the area as ice shelves continue to diminish. A new northern sea route would shorten the trip from east Asia to the western Europe area by more than 13,000 miles. Such a route would allow China to ship goods to Europe 2 weeks faster, I should say, than they can do it today. Russia has begun to demand a fee from ships to travel through international waters along the Northern Sea route over which it claims ownership. Along with new and additional maritime activities, melted ice in the Arctic will increase economic activities such as tourism, fisheries, energy exploration, infrastructure development, as well as other areas presenting major challenges to the United States. We must ensure development is sustainable with minimal environmental impacts and that it supports local communities, including the indigenous people. The presence of the Coast Guard, your presence in the Arctic and the State Department's diplomatic efforts to protect international cooperation will be critical to protecting our interests in the region. The Coast Guard's mission in the Arctic include regulation of shipping, fishing law, and ports of security, search and rescue, and support of scientific research. The Coast Guard is responsible for maintaining a U.S. presence in our territorial waters and defending our security and economic interests in the region. Right now, the Coast Guard is hampered by its Arctic mission because it only has 2 polar icebreakers and only one of which is a heavy-duty icebreaker. Congress has provided funding in 2019 for the Coast Guard to begin construction of its first new polar security cutter, a good initial investment in improving the Coast Guard's capabilities. But the Coast Guard has stated that 6 polar security cutters will be necessary to successfully execute its mission in the Arctic. Congress must continue to emphasize its supporting efforts with the Coast Guard and your needs as we will continue to value the Government Accountability's Office assistance in ensuring appropriate oversight of these acquisition programs. In the mean time, the Coast Guard will need to use other resources and capabilities to meet its mission in the Arctic. The lack of adequate Coast Guard resources will make the State Department's diplomatic work all that more important. Unfortunately, just when American leadership and cooperation in the Arctic is needed on the international stage, we have chosen to eliminate the State Department's position of the Special Representative for the Arctic. I look forward to hearing from the State Department and how it is ensuring appropriate leadership in the Arctic issues despite the loss of that position. My opinion, we need to invest more in our capabilities in the Arctic, not less, in order to ensure that the Coast Guard, the State Department, and its Government partners can secure the homeland at our northernmost border. I look forward to our discussion today, and I will now recognize the Ranking Member Lesko, of this subcommittee, for an opening statement. [The statement of Chairman Correa follows:] Statement of Chairman Lou Correa February 5, 2020 Today's hearing will discuss U.S. homeland security priorities in the Arctic, following a productive hearing with non-Government witnesses on this topic last September. Already we have seen the Arctic's climate changing--with diminishing ice opening up maritime activity in a part of the world that was largely unnavigable and untouched. It seems the Federal Government is ill-prepared for the changes brought about a warmer climate in the Arctic. I am very concerned about the number of aggressive actions of other nations in this region, primarily those of Russia and China. The United States has a long history of supporting an international rules-based order in the spirit of cooperation by all Arctic states. In recent years we have seen Russia expand its military installations and activities in the Arctic, investing heavily in assets to increase its maritime operations. Russia has a large icebreaker fleet of more than 50 icebreakers, with more on the way. China, located 1,000 miles away from the Arctic, has declared itself a ``near-Arctic state'' and is investing strategically in other Arctic nations to increase its presence and influence in the region. Russia and China's economic interests in the region rely on opening potential trade routes in the Arctic as ice shelves continue to diminish. A new Northern Sea Route would shorten the trip from East Asia and Western Europe from 13,000 miles to 8,000 miles. Such a route would allow China to ship goods to Europe 2 weeks faster than it can now. Furthermore, Russia has begun to demand a fee from ships to travel through international waters along the Northern Sea Route over which it claims ownership. Along with new and additional maritime activities, melted ice in the Arctic will increase economic activities such as tourism, fisheries, energy exploration, and infrastructure development, presenting major challenges. We must ensure development is sustainable, with minimal environmental impact, that it supports local communities, including indigenous people. The Coast Guard's presence in the Arctic and the State Department's diplomatic efforts to protect international cooperation will both be critical to protecting U.S. interests in the region. The Coast Guard's missions in the Arctic include regulation of shipping and fishing, law enforcement, port security, search and rescue, and support of scientific research. The Coast Guard is responsible for maintaining a U.S. presence in our territorial waters and defending our security and economic interests in the region. Right now, the Coast Guard is hampered in its Arctic mission because it has only 2 polar icebreakers--only 1 of which is a heavy-duty icebreaker. Congress provided funding in 2019 for the Coast Guard to begin construction of its first new Polar Security Cutter--a good initial investment in improving the Coast Guard's capabilities. But the Coast Guard has stated that 6 Polar Security Cutters will be necessary to successfully execute its missions in the Arctic. Congress must continue to prioritize supporting the Coast Guard's urgent needs, and we will continue to value the Government Accountability Office's assistance in ensuring appropriate oversight of these acquisition programs. In the mean time, the Coast Guard will need to use other resources and capabilities to meet its Arctic mission to the best of its ability. Additionally, the lack of adequate Coast Guard resources will make the State Department's diplomatic work all the more important. Unfortunately, just when American leadership and cooperation on the Arctic is needed on the international stage, the administration has chosen to eliminate the State Department position of the Special Representative for the Arctic. I look forward to hearing from the State Department how it is ensuring appropriate leadership on Arctic issues despite the loss of that position. We need to invest more in our capabilities in the Arctic--not less--in order to ensure that the Coast Guard, the State Department, and its Government partners can secure the homeland at our northernmost border. Mr. Correa. Mrs. Lesko. Mrs. Lesko. Thank you, Mr. Chairman, and I have to say I thought your opening statement was spot-on, and we have bipartisan agreement. In this whole partisan culture that is going on, I welcome bipartisan agreement on an issue. I also want to welcome a new Member to our subcommittee, Representative Van Drew. Welcome. Mr. Correa. Welcome, Mr. Van Drew. We do need another dentist on this committee. Mr. Van Drew. No such thing as too many dentists. Mrs. Lesko. There you go. Well, I am pleased to see the subcommittee meeting today to gain additional perspectives on this important topic facing the United States' National security. Our previous hearing on the Arctic gave the subcommittee valuable stakeholder perspectives on the Homeland Security implications of a changing strategic dynamic in the region, and I look forward to hearing today how the U.S. Coast Guard and State Department are responding. The many international, legal, economic, scientific, and security challenges facing the Arctic present a complex set of issues that require close interagency collaboration and a united effort to work with our partners and present strength to our adversaries. I hope to hear today how the Coast Guard and State Department are working together to advance U.S. interests and what work is being done with our allies and partners. As we heard from our witnesses at the first hearing on this topic, the Arctic is quickly becoming a region in which commerce comes face-to-face with great power competition. The United States must work to protect its interests in international norms surrounding freedom of navigation. For this reason, I am eager to hear from our panel today about what resources are needed to accomplish a diverse and critical mission set and what additional implications for Homeland Security we can examine. The Coast Guard is the sole operator of America's polar capable fleet, thus placing the service at a critical center of maintaining U.S. sovereignty in the Arctic. However, this reality also requires us to understand the Coast Guard's limitations related to an aging fleet consisting of a single heavy icebreaker, the Polar Star, which as we all know, suffers from age-related mechanical issues. I am pleased that Congress has finally funded a new polar security cutter and has begun funding for preparation of another. However, it is incumbent upon us to continue advocating for the resources and infrastructure needed by our men and women in uniform. As we ask more and more of the Coast Guard in the Arctic, we should be steadfast in our commitment to the service and its needs, and so I am glad that we are in agreement on this issue, Mr. Chairman. The Homeland Security implications of a changing Arctic dynamic present both challenges and opportunities for the United States, and I am glad that the subcommittee is ensuring that we are part of the conversation. Thank you, Mr. Chairman, thank you to our witnesses today. I yield back the balance of my time. [The statement of Ranking Member Lesko follows:] Statement of Ranking Member Debbie Lesko Feb. 5, 2020 Thank you, Mr. Chairman. I am pleased to see the subcommittee meeting today to gain additional perspectives on this important topic facing U.S. National security. Our previous hearing on the Arctic gave the subcommittee valuable stakeholder perspectives on the homeland security implications of a changing strategic dynamic in the region, and I look forward to hearing today how the U.S. Coast Guard and State Department are responding. The many international legal, economic, scientific, and security challenges facing the Arctic present a complex set of issues that require close interagency collaboration and a united effort to work with our partners and present strength to our adversaries. I hope to hear today how the Coast Guard and State Department are working together to advance U.S. interests and what work is being done with our allies and partners. As we heard from our witnesses at the first hearing on this topic, the Arctic is quickly becoming a region in which commerce comes face- to-face with great power competition. The United States must work to protect its interest and international norms surrounding freedom of navigation. For this reason, I am eager to hear from our panel today about what resources are needed to accomplish a diverse and critical mission set and what additional implications for homeland security we can examine. The Coast Guard is the sole operator of America's polar-capable fleet, thus placing the service at the critical center of maintaining U.S. sovereignty in the Arctic. However, this reality also requires us to understand the Coast Guard's limitations related to an aging fleet consisting of a single heavy icebreaker, the Polar Star, which suffers from age-related mechanical issues. I am pleased that Congress has finally funded a new Polar Security Cutter and has begun funding for preparation of another; however, it is incumbent upon us to continue advocating for the resources and infrastructure needed by our men and women in uniform. As we ask more and more of the Coast Guard in the Arctic, we should be steadfast in our commitment to the service and its needs. The homeland security implications of a changing Arctic dynamic present both challenges and opportunities for the United States, and I am glad that the subcommittee is ensuring that we are part of the conversation. Thank you, and I yield back the balance of my time. Mr. Correa. Thank you, Mrs. Lesko. Members are reminded that statements may be submitted for the record. [The statement of Chairman Thompson follows:] Statement of Chairman Bennie G. Thompson February 5, 2020 I would like to thank Chairman Correa and Ranking Member Lesko for holding today's hearing on homeland security priorities in the Arctic-- our Nation's northernmost border. I also would like to thank today's witnesses for sharing their valuable expertise. Under the current administration, a great deal of attention has been focused on our Southern Border. One thing that I appreciate about this committee, however, is our ability to simultaneously examine the vast range of security matters facing the homeland. Among these matters is the U.S. Coast Guard's mission to secure and protect the maritime domain--which includes U.S. Arctic waters. Many forget that the United States is, after all, an Arctic nation, given the geography of Alaska. The vastness of U.S. Arctic waters and a changing environment place increasing demands on the Coast Guard. The Coast Guard has identified its responsibilities in the Arctic as ensuring ``the homeland security, safety, and environmental stewardship of U.S. waters.'' Executing this mission in the region is becoming more difficult, as the Arctic's strategic importance is growing, and maritime activity is increasing. Studies show this increase in maritime activity is linked directly to climate change, as global warming has caused an overall decrease in the duration and thickness of sea ice coverage. Warmer temperatures are also inviting a rise in recreational activity and offshore exploration of natural resources. In addition to climate change, the Coast Guard has had to contend with the increased presence and aggression of geopolitical actors, like Russia and China, in the region. Both nations have identified increased presence in the Arctic as a strategic priority, motivated in part by the potential economic benefits that Arctic shipping routes could bring. Russia is increasing its military presence in the Arctic, building on what is already the world's largest number of icebreakers. With almost 50 icebreakers, Russia has the capabilities, personnel, and infrastructure needed to operate in the Arctic year-round. China has likewise shown its Arctic ambitions, directing Chinese companies and Government agencies to maintain an increased presence in the region to help create what it calls a ``Polar Silk Road.'' China has also announced its first domestically-built icebreaker and plans for a nuclear-powered icebreaker. As we learn about the emerging capabilities of other geopolitical actors in the region, I am concerned about the Coast Guard's capability gaps in the Arctic--including a need for additional icebreakers and long-range patrol vessels. The Coast Guard currently has just one heavy polar icebreaker, the Polar Star, and one medium icebreaker, the Healy. The Polar Star is well past its service life and conducts missions in Antarctica--not the Arctic. Thankfully, Congress has made significant investments in building new Coast Guard assets, including funds to begin construction on a new Polar Security Cutter. This first Polar Security Cutter will replace the Polar Star and its responsibilities in the Antarctic; only a second Polar Security Cutter to be delivered in 2025 or later would finally provide the Coast Guard with icebreaking capabilities in the Arctic. It is evident that the Coast Guard, and the U.S. Government as a whole, has some catching up to do to be able to protect U.S. interests in the Arctic. Without increased attention and investment in the strategies, resources, and personnel needed to operate at our northernmost border, the Coast Guard will risk falling further behind. I look forward to hearing from today's witnesses about homeland security priorities in the Arctic and how Congress can best support the Government's critical missions in the region. Mr. Correa. I will welcome our panel of witnesses. Our first witness, Admiral Charles Ray, is the vice commandant of the United States Coast Guard. I welcome you, sir, and I recognize you for 5 minutes of comments. You may begin. STATEMENT OF ADMIRAL CHARLES W. RAY, VICE COMMANDANT, U.S. COAST GUARD Admiral Ray. Yes, sir. Good morning, Chairman Correa, Ranking Member Lesko, distinguished Members of the subcommittee. On behalf of Admiral Shields and all the women and men of the United States Coast Guard, I want to thank you for your unwavering support of our service. Arctic is growing increasingly important, and I appreciate the opportunity to appear today and discuss the Coast Guard's proactive strategy to advance U.S. National security interests in the region. I ask that my previous written testimony be entered into the record. Mr. Correa. Without objection, sir. Admiral Ray. Thank you, sir. For over 150 years, your Coast Guard has been America's primary maritime presence in the Arctic, and the demand for our services is intensifying. As a result, the opening waters in America's northern coast commercial opportunities range from fishing to energy production, rare mineral extraction, cruise operations, ecotourism abound. There is an overall increase in human activity in this region, and it indicates the need for increasing Coast Guard presence. Also, this combination of events has led to the opportunity for nations, other nations, to seek to shape the security environment, expand their influence, and advance their own interests. As was stated by the Chairman, Russia's got the world's largest icebreaker fleet by large. Its ability to visibly project force, coupled with the renewed interest in their infrastructure in the Arctic region and increase in military activities, are indicative of the strategic significance they place on the region. As was also stated, China, a non-Arctic state, not even within 900 miles, is also investing heavily in the Arctic. They are emblematic of their global influence campaign. Whether from Africa to South America, anywhere on the planet you put it, they are working from the same playbook. This year, China took delivery of its first domestically- built icebreaker, Xuelong 2. They had the Xuelong 1 which they obtained from Ukraine and refitted, and so within about 2 years, they are going to surpass the United States in their icebreaker capability. If left unchecked, China and Russia's behavior risks fracturing the tenuous stability and rules-based governance in the Arctic. To address the Nation's expanding National security needs and built on our 150 years of experience, the Coast Guard published an updated Arctic strategic outlook in April 2019 which reaffirms our commitment to promoting U.S. leadership in the region and preserving a peaceful, cooperative, rules-based region. As you all have stated, leadership begins with presence, and that is a challenge. Our Nation's icebreaking fleet is aging, and we do not have the capacity to cover where we think we should be at the present time. But thanks to this subcommittee, the Congress, and the administration, we have turned the corner on that, and I am really pleased that we have started to rebuild our polar security cutter fleet. Leadership in this region also requires operations in communities, ports, and waters, and we demonstrate this yearly through an operation called Arctic Shield. It is mobile, it is scalable, and we connect with the indigenous people of the region and participate in all of our other missions. As many nations aspire to expand their roles, the Coast Guard, we work collaboratively with these multi-lateral international organizations and work with the State Department and particularly with the Arctic Coast Guard Forum, and we participate in things that we can agree on, fisheries and pollution response and things like that, so that is a look in the right direction. However, to continue to protect our region, we need other assets up there to improve communication, maritime domain awareness, navigation. I was up on the cutter Healy north of the North Slope about 60 miles. For almost a month this past summer, and there were 7 up there, they were without any communications other than HF radio. I mean, they were literally off the grid. That takes a whole-of-Government approach, and I am sure we will be able to do that. In summary, a strong United States Coast Guard empowers the Nation to lead in the Arctic and shape the region as a safe, cooperative, and prosperous domain. I thank you for your support and look forward to your questions. [The prepared statement of Admiral Ray follows:] Statement of Admiral Charles W. Ray February 5, 2020 introduction Good morning Mr. Chairman and distinguished Members of the subcommittee. It is my pleasure to be here to discuss the U.S. Coast Guard's strategy and operations to safeguard National security interests and advance safe, secure, and environmentally responsible maritime activity in the Arctic Region. The Coast Guard has been operating in the Arctic Ocean since 1867, when the United States purchased Alaska from Russia. Since that time, the state of affairs in the Arctic has evolved significantly. The ice is receding; storms are increasing in frequency and magnitude; the coast is eroding; and permafrost is thawing. Alaskan residents are striving to evolve their resiliency and to sustain their culture and way of life while residents and non-residents alike are pursuing emerging opportunities. For the Coast Guard, the demand signal for our services is expanding along with the operational environment, exacerbating the tyranny of distance of the region. The types of commercial activity are morphing, from oil and gas exploration a few years ago to the recent surge in cruise ship activity and expanding environmental tourism. These rapid changes in types and location of activity, along with the changes in the physical environment, magnify the challenges in executing the Service's mission to advance safety, security, sovereign rights, and stewardship across the Arctic. Simultaneously, the geopolitical environment is rapidly changing as state and non-state actors seek to advance their own interests in the Arctic. Allies, partners, and competitors alike increasingly compete for diplomatic, economic, and strategic advantage. The National Defense Strategy describes a world no longer at either peace or war but rather one of enduring great power competition. Shaping and influencing this competition continuum requires a mixture of diplomatic, informational, military, economic, financial, intelligence, and law enforcement efforts to achieve and sustain National strategic objectives. As the only U.S. Armed Force with both military and law enforcement authorities, combined with membership in the intelligence community, the Coast Guard seamlessly bridges the layers across this continuum. Specifically, the Coast Guard's constabulary function and broad authorities serve as a critical bridge between the hard-power lethality of the Defense Department and soft- power diplomacy of the State Department. This strategic versatility is well-suited for operating in ambiguous environments. This makes the Coast Guard a unique agency to cultivate strong international relationships and build a coalition of Arctic partners based on mutual interests and values that strengthen regional stability and enhance prosperity across the region. Our recently published 2019 Arctic Strategic Outlook reaffirms the Service's commitment to advancing and protecting National security interests in the region through American leadership, partnership, unity of effort, and continuous innovation. The Outlook establishes 3 lines of effort to achieve long-term success. First, we will enhance capability to operate effectively in a dynamic Arctic domain; second, we will strengthen the rules-based order; and third, we will innovate and adapt to promote resilience and foster prosperity. Meeting the Nation's needs and interests to secure the Arctic requires significant investment and a whole-of-Government approach across multiple Departments, agencies, and services. The Coast Guard's value in this whole-of-Government approach is our experience, leadership, model behavior, and ability to compete below the level of armed conflict. Therefore, strengthening the Coast Guard empowers the Nation to secure the Arctic against threats and shape the region as a safe, cooperative, and prosperous domain. national security interests in the arctic region The United States is an Arctic nation with extensive sovereign rights and responsibilities, and our National security interests in the Arctic are significant, in part due to the reemergence of great power competition in the region. As access to the region evolves, many Arctic and non-Arctic nations aspire to assert or expand their role in governing the region; the dynamic operational environment continues to present risks and opportunities for a broad spectrum of stakeholders. To safeguard our National interests, the United States must plan for a robust, year-round maritime presence commensurate with the expanding interest in the Arctic's strategic value, in its natural resources, and in its potential as a transportation corridor between Asia, Europe, and North America. If we are not vigilant and proactive, other Arctic and non-Arctic nations will outpace us in assuring their strategic interests in the region in ways that may adversely affect the United States' interests. Actions and intentions of Arctic and non-Arctic nations shape the security environment and geopolitical stability of the region. In particular, our 2 near-peer competitors, Russia and China, are demonstrably intent on exploiting the maritime domain to advance their interests. Twenty percent of Russia's landmass is north of the Arctic Circle, and both onshore and offshore resource (minerals, oil, and gas) development is crucial to the Russian economy. Russia is also advancing the growth of the Northern Sea Route (NSR) for trans-Arctic shipping and other commercial opportunities. The NSR continues to set new shipping records, last year reaching 29 million tons of goods transported along the route. Natural resource extraction is the main contributor to these increases, predominantly oil and gas shipments from their Yamal facilities. If their energy projections come to fruition, then transport volumes on the NSR could reach 100 million tons per year by 2030. From a military perspective, Russia's long Arctic coastline, once stripped of sea ice in the future, will be both vulnerable, and able to support naval fleets readily deployable between the Atlantic and Pacific. The Russian government is currently rebuilding and expanding military bases that had previously fallen into disuse. These renewed capabilities include air bases, ports, weapons systems, troop deployments, domain awareness tools, and search-and-rescue response. Additionally, Russia has the world's largest number of icebreakers. With over 50 icebreakers that include 4 operational, nuclear-powered heavy icebreakers, and plans to build an additional 7 nuclear-powered icebreakers, Russia maintains the capabilities, capacities, experienced crews, and infrastructure necessary to operate and surge into the Arctic year-round. China, a non-Arctic nation, has recently taken an active role in Arctic development, pursuing economic investments with every Arctic nation in key strategic areas, such as oil and gas development, ports, railways, and infrastructure. It has purchased numerous resource deposits throughout the region, including uranium, energy, and rare- earth elements. With the release of their Arctic Policy paper in January 2018, China declared itself a nation intrinsically tied to the Arctic, and signaled their intention to play a security and governance role in the region. China has directed Chinese companies and government agencies to become more involved in Arctic affairs, and is rapidly developing its ability to operate in the region. This year, China launched its first home-built icebreaker and has begun designing an even more powerful and potentially nuclear-powered Polar icebreaker expected to have twice the icebreaking capability of its newest vessel. With 3 icebreakers China will have greater access than the United States currently has to the Arctic, its ports, and its resources. The concern with Chinese activities in the Arctic is the potential to disrupt the cooperation and stability in the region. Around the globe, China uses coercion, influence operations, debt-trap diplomacy, and implied military threats to persuade other states to heed China's strategic agenda. China views the Arctic as a component of its One Belt, One Road initiative, recently dubbed the Polar Silk Road. China's ambitions and outreach are fraught with risk, often times diminishing the sovereignty of states and fracturing the rules-based governance currently employed in the region. National security interests extend to the local level as well. For example, economic, environmental, and human security and stewardship are also linked to the changes and expanding activity in the Arctic. Significant increases in natural resource extraction in the U.S. Arctic have not yet materialized, but industries continue to explore opportunities so that they are positioned to leverage economic prospects as they emerge. Current industry growth in the Arctic includes a significant increase in cruise tourism and transpolar flights, which could potentially increase search-and-rescue missions and risk to the pristine environment. Additionally, we have observed steady but measured growth of shipping through the Bering Strait over the past 10 years, across all sectors of industry. As the Arctic continues to experience longer and larger periods of reduced or ice- free conditions, commercial interest and exploitation will grow. A recent U.S. Committee on the Marine Transportation System report projects that by 2030, vessel traffic through the Bering Strait could increase to more than 370 transits, which is roughly 3 times the 2008 traffic levels. This potential rise will increase the demand for the Coast Guard to monitor, protect, and regulate increased maritime activity, such as de-conflicting shipping corridors in U.S. waters with subsistence hunting and fishing communities. Food security is another significant issue for Arctic residents and our Nation as a whole. The Bering Sea provides more than half of the wild-caught fish and shellfish in the United States, and the wildlife for subsistence harvesting. Alaska is ranked seventh in the world in global fish exporters, and their seafood industry accounts for almost $6 billion a year in total economic activity. Additionally, approximately 70 percent of the U.S. Arctic population relies on subsistence hunting and fishing for survival, the vast majority of which comes from the sea. Thus, changes occurring in the Arctic Ocean are increasing the risk to food security for the globe, from shipping that disrupts migration patterns, to increased risk of pollution incidents, to growth in illegal, unreported, and unregulated fishing as fish stocks migrate. As human activity continues to increase in the Arctic region, challenges associated with legal and illicit activity plus state and non-state actors are likely to increase. In the face of this competition continuum, the Coast Guard's value proposition is even more critical in the Arctic and around the globe. The Service upholds freedom of the seas and the rules-based order by setting and enforcing standards of behavior in the maritime domain. balancing national security interests across the globe The Coast Guard possesses a broad suite of authorities and capabilities unique from the other armed services and traditional instruments of National power. As previously noted, the Coast Guard's authorities expand beyond traditional military and intelligence roles, to include law enforcement and regulatory roles. This combination, along with a multitude of steady-state international bilateral agreements, offers a distinct compliment to conventional defense forces in the on-going struggle to compete below the level of armed conflict. Coast Guard international engagements complement more traditional U.S. military posturing. Regular and persistent Coast Guard presence and peaceful engagements support regional stability while positioning the United States as the global maritime security partner of choice. The Coast Guard operates around the world in accordance with over 60 international bilateral agreements, to include 11 with Oceania nations. Furthermore, the Service is also party to and, in many cases, serves in a leading capacity within a variety of multilateral forums including the North Pacific Coast Guard Forum, Arctic Coast Guard Forum, South East Asia Maritime Law Enforcement Cooperation, and the Africa Maritime Law Enforcement Partnership. This combination of access, authorities, and international acceptance, offers an indispensable opportunity of regional support and stability in this new era of competing influence. As the world's preeminent coast guard, the U.S. Coast Guard is logically the most suited to build partner capacity in maritime law enforcement, search and rescue, marine safety, fisheries management, and conservation--all of which are traditional Coast Guard missions. These missions, incidentally, are in growing demand across the globe. Illegal, Unreported, and Unregulated (IUU) fishing, in particular, is a priority issue impacting global stability, in the Atlantic, across the Pacific, and even in Antarctica, where many economies heavily depend on local fish stocks as a primary source of protein and personal income. The Service, through its internationally-recognized maritime law enforcement expertise and a multitude of bilateral and related ship rider agreements, offers viable options to augment partner nation law enforcement capacity to patrol their respective exclusive economic zones. These efforts are essential to preserving, protecting, and defending critical regional and migratory fish stock sustainability and economic vitality while simultaneously countering the malign influence and predatory practices of globally-spread powers such as China. the coast guard in alaska and the arctic region As stated, our 2019 Arctic Strategic Outlook reaffirms our commitment to American leadership in the region and articulates the ends, ways, and means to promote and safeguard National security in the Arctic. This includes waging a campaign for safety, all sovereign rights, and stewardship through cooperation; addressing competition below the level of conflict; and preparing for conflict should it arise. The following highlights some of the initiatives that have particular impacts on our National and international security, but these activities must be part of an integrated, whole-of-Government approach to security in the Arctic. strategic leadership As many nations and other stakeholders across the world aspire to expand their roles and activities in the Arctic, the Coast Guard is working collaboratively through international bodies to address the emerging challenges and opportunities in the region. One example is our support to the Arctic Council, which is a high-level international forum focused primarily on environmental protection and sustainable development issues in the Arctic region. The Council is composed of the 8 Arctic nations, 6 Arctic indigenous groups, observer nations (including China), and non-governmental organizations that have observer status. The Coast Guard plays a significant role in supporting our Nation's existing engagement in Arctic Council activities through representation on 2 standing working groups--Emergency Prevention, Preparedness & Response (EPPR), and Protection of the Arctic Marine Environment (PAME). Under the EPPR working group, the Coast Guard leads the U.S. Government delegation and serves as Chair of the Marine Environmental Response Experts Group. Within PAME, the Coast Guard participates in the Shipping Experts Group where we support projects such as mitigation of risks associated with the use and carriage of heavy fuel oil by vessels in the Arctic. The Coast Guard also served on the Council's Task Force on Arctic Marine Cooperation and has been active in other task forces that established the 2011 Arctic Search and Rescue Agreement, the 2013 Oil Spill Prevention and Response Agreement, and the 2015 Framework for Oil Pollution Prevention. The Coast Guard has also supported Arctic safety through other international bodies such as the International Maritime Organization (IMO). The Coast Guard was instrumental in the IMO's development and adoption of the International Code for Ships Operating in Polar Waters (Polar Code) to cover the design, construction, equipment, operational, training, and environmental protection matters relevant to ships operating in the Polar regions. In 2017, the Coast Guard completed a rulemaking process to issue Polar Ship Certificates to U.S. vessels. We also developed and promulgated guidance to industry and our Captains- of-the-Port on how to ensure compliance with the Polar Code. Additionally, in November 2017, the Coast Guard collaborated with the Russian Federation to jointly develop and submit a proposal to the IMO to establish a system of two-way routes in the Bering Strait and Bering Sea. The Coast Guard also submitted an associated proposal to establish ``Areas to be Avoided'' in 3 environmentally-sensitive areas. The objective was to advance the maritime transportation system in the region; promote the safe, responsible flow of commerce; and de-conflict the commercial uses of the waterways with subsistence activities. The IMO adopted these measures at the 99th session of its Maritime Safety Committee, and the provisions entered into force in December 2018. These are but two examples of the Coast Guard being proactive in addressing emerging international and domestic maritime concerns in the Arctic. Last, the Arctic Coast Guard Forum (ACGF) is a bridge between diplomacy and operations. Formally established in October 2015, the ACGF operationalizes all of the elements of our Arctic strategy as well as the objectives of the Arctic Council. It is a unique, action- oriented maritime governance forum where the Coast Guard and our peer agencies from the other 7 Arctic nations strengthen relationships, identify lessons learned, share best practices, carry out exercises, conduct combined operations, and coordinate emergency response missions. In April 2019, the ACGF conducted its second live exercise, POLARIS, which incorporated 6 ships and 5 aircraft from the ACGF member nations to respond to a simulated cruise ship in distress near Finland. The exercise was a successful demonstration of combined operations with the 8 ACGF nations and highlights the criticality of coordination in maritime environmental response and the responsibility to ensure search-and-rescue resources are prepared to respond. coast guard operations in the american arctic Operation ARCTIC SHIELD is the Coast Guard's year-round planning and operational endeavor that provides a flexible, mobile, and scalable presence in the Arctic domain. In 2019, ARCTIC SHIELD (AS19) operations advanced National and Coast Guard strategic goals by aligning operations to mitigate real-world threats and leverage opportunities of strategic interest. To promote regional resilience and strengthen the maritime transportation system, the Coast Guard spearheaded a Marine Safety Task Force (MSTF) to conduct missions in the remote regions of their Area of Responsibility (AOR). Employing active and reserve surge personnel, the MSTF deployed to and engaged with 102 local communities to perform marine safety and marine environmental protection missions in villages not on the road system in the Arctic and Western Alaska. In addition to the summer surge support, a major contributor to the MSTF success has been its partnerships: The Civil Air Patrol transportation saved valuable resources and allowed personnel to transit more seamlessly between remote villages. The MSTF teams inspected over 60 percent of the region's 380 regulated bulk oil facilities--a massive improvement over the prior annual average of 12 percent. Frequent inspections and proactive communications between the Coast Guard and facility operators will reduce the environmental risk to remote communities, help remote villages build capacity to respond, and set baselines for resilience and awareness as their environment rapidly changes. From July to October, MH-60 helicopters and crews deployed to Forward Operating Location Kotzebue and to Utqiagvik to conduct Coast Guard missions. This year, those helicopters completed 25 SAR cases, saved 13 lives, and assisted 28 others in an environment harsher than anywhere else the Coast Guard operates. Additionally these assets improved the Coast Guard's maritime domain awareness in the Arctic and provided critical support to Federal and State personnel studying marine mammals. The Coast Guard partnered with DoD to leverage their strategic lift capabilities to deploy the assets to Kotzebue and the North Slope. Additionally, when the helicopters made the unplanned shift to Utqiagvik in September, the Coast Guard leveraged a long- standing positive partnership with the North Slope Borough to gain critical hanger space and logistical support on short notice. The Coast Guard would not have been able to complete its scheduled deployment to the Arctic and provide SAR coverage to North Slope mariners without the efforts and support from both. The Coast Guard departed Utqiagvik on October 31, 2019, but subsistence whale hunting extended beyond the traditional season. This highlights the changing operational environment not only for the Coast Guard but also for Arctic residents. The lengthened ``shoulder'' seasons of open water are beyond the period in which the Coast Guard has the resources to be present. Without the Coast Guard's highly mobile expeditionary forces, risk to mariners and coastal residents will escalate as maritime activity and traffic expands throughout the vast Arctic. AS19 exercised the Coast Guard's expeditionary capability by deploying a team from our Deployable Specialized Forces in California to conduct shore-based law enforcement operations for the Kotzebue salmon state fishery that consists of nearly 100 small open skiffs. The enforcement operation reinforced several years of extensive marine prevention outreach, education, and training with these fishers. Planning and executing this mission highlighted the logistical and administrative challenges involved in supporting mission execution in the Arctic. This deployed law enforcement team provided 3 weeks of on- water presence and contacted 59 commercial fishing vessels and conducted 27 boardings with 5 voyage terminations. The operation bolstered community support from the mayor and local fishermen and rallied the community to improve their own safety and survivability at sea. In the absence of a consistent law enforcement presence in the region, the Coast Guard must develop and exercise expeditionary capability to project surface forces into the Arctic as the weather patterns are less predictable and maritime activity continues to evolve. This team's employment points to the urgent need to modernize assets, infrastructure, and platforms to effectively operate and provide presence in the Arctic. In 2020, operations will be supported with cutter, aircraft, and shoreside presence across Western and Northern Alaska. Specific activities include establishing a regional SAR response capability, conducting boardings to promote fishing vessel safety, facility and vessel inspections, gold dredge fleet inspections, maritime safety compliance enforcement, and ice rescue training. Planned activities also include testing and improving oil spill preparedness and response capabilities, conducting a commercial aircraft crash-related mass rescue exercise, and completing a joint maritime pollution contingency exercise with international partners. Year-round outreach efforts will continue to deliver education and awareness services to Arctic communities and outlying native villages. As presence equals influence, the Coast Guard must continue to evaluate options to advance our 2019 Arctic Strategic Outlook as well as National interests in the region. The resurgence of nation-state competition over the past 5-10 years has coincided with the dramatic changes in the physical environment of the Arctic. This reality has elevated the Arctic's prominence as a strategically competitive space. The Coast Guard, and the Nation, have limited means to respond to, intercept, or collect information on vessels operating in the Arctic region. icebreaking capacity and acquisition status The ability for the United States to lead in the Arctic, both strategically and operationally, hinges on having the capabilities and capacity (presence) to protect our National sovereignty and safeguard our homeland security interests. The foundation of the Coast Guard's operational presence and influence is U.S. icebreakers, whose purpose is to provide assured, year-round access to the polar regions for executing National security missions within existing Coast Guard authorities. Our heavy icebreakers must be fully interoperable with DoD, international allies, and partners to optimally carry out National maritime homeland defense and homeland security missions. Thus, they will include sufficient space, weight, and power to conduct the full complement of multi-mission activities that support our Nation's current and future National security interests in the Arctic. The 2010 High Latitude Mission Analysis Report (HL MAR) identified the need for 6 new polar icebreakers (at least 3 of which must be heavy) under the assumption that, in the future, the Coast Guard would be required to perform 9 of its 11 statutory missions year-round in the Arctic, and meet all icebreaking needs in support of the United States Antarctic Program. In 2017, the Coast Guard's Center for Arctic Study and Policy completed an addendum to the HL MAR. The objectives were to provide a broad overview of changes in the polar regions over the last 7 years and to provide specific information for use in determining potential impacts on mission areas in the polar regions. This addendum provides confidence in the original findings and encourages the sustained reliance on its initial recommendations on the Nation's need for 6 icebreakers, 3 of which must be heavy icebreakers. The current Coast Guard icebreaker capacity is 1 heavy polar icebreaker, CGC POLAR STAR--commissioned in 1976, and 1 medium icebreaker, CGC HEALY--commissioned in 2000. The primary differences between heavy and medium icebreakers are endurance and power. The Coast Guard considers a heavy icebreaker to be one that can break at least 6 feet of ice at a continuous speed of 3 knots and operate year-round in the Arctic, with the necessary systems and endurance to protect its crew in the event it has to ``winter-over'' in substantial ice conditions. Conversely, medium icebreakers are designed to operate seasonally in the Arctic. Due to the strong support of the administration and Congress, the fiscal year 2019 appropriation included full funding for the acquisition of our first Polar Security Cutter (PSC), and some long lead time materials for the second. This investment sends a strong message that the Nation is serious about our interests in the Arctic. In April of last year, the joint Coast Guard and Navy Integrated Program Office (IPO) awarded VT Halter Marine Inc., of Pascagoula, Mississippi, a fixed price incentive (firm) contract for the detail design and construction of the lead PSC. We are as close as we have been in over 40 years to recapitalizing our icebreaking fleet, and continued investment will ensure we meet our Nation's growing needs in the rapidly evolving and dynamic polar regions. The Coast Guard also understands that we must maintain our existing heavy and medium icebreaking capability while proceeding with recapitalization. Construction on the first PSC is planned to begin in 2021 with delivery planned for 2024; however, the contract includes financial incentives for earlier delivery. Maintenance of POLAR STAR will be critical to sustaining this capability until the new PSCs are delivered. Robust planning efforts for a service life extension project on POLAR STAR are already under way and initial work for this project will begin in 2020, with phased industrial work occurring annually from 2021 through 2023. The end goal of this process will be to extend the vessel's service life until delivery of at least the second new PSC. shore infrastructure In addition to having the necessary platforms to maintain our presence in the Arctic, the Coast Guard maintains a robust shore infrastructure laydown in Alaska. Shore facilities support all Coast Guard operations and personnel, as well as provide required infrastructure to support the needs of the Service's operational communities. Investments in shore infrastructure are critical to modernizing the Coast Guard and equipping our workforce with the facilities required to meet mission. With approximately 10 percent of the Coast Guard's real property inventory located in Alaska, the need for proper capital investments is all the more critical given the vast distances between shore facilities in that region. We are currently building waterfront facilities and shore infrastructure to support the delivery of 6 new Fast Response Cutters (FRC) and 2 Offshore Patrol Cutters (OPC) to Alaska, as well as the critical housing and family support facilities to accommodate the additional personnel and their families to operate and maintain these new assets. Additionally, over the last few years, we have built a new hangar to support forward-deployed helicopters in Cold Bay, 20 new housing units in Kodiak, as well as new facilities in Kodiak to enable our transition from C-130H to C-130J aircraft. conclusion These efforts reaffirm our commitment to the region and the Nation's need for capabilities, capacities, and infrastructure to protect our National security interests in the region. Arctic operations must be balanced with competing demands for Coast Guard capabilities both at home and abroad. However, the Coast Guard must remain flexible and scalable to adapt to the rapidly-evolving geopolitical and operational Arctic environments. Regardless, the Coast Guard will continue to lead across the National and international landscape to build a coalition of like- minded partners in order to shape the Arctic domain as an area of low tension, high attention, and great cooperation while preserving our National interests and rights. This leadership and collaboration across the National and international spectrum will enable us to reinforce positive opportunities and mitigate negative consequences in the Arctic region. Failing to increase and focus our Nation's leadership in the Arctic will result in other powerful nations taking the lead in a region with critical geostrategic value. We understand the significant investment required to secure the Arctic, and we appreciate and embrace the trust the Nation has placed in the Service. Thank you for the opportunity to testify before you today and for all you do for the men and women of the Coast Guard. I look forward to answering your questions. Mr. Correa. Thank you, Mr. Ray. Without objection, your full statement will be inserted into the record. I now recognize Mr. Michael Murphy, the deputy assistant secretary for the Bureau of European and Eurasian Affairs, Department of State. Please summarize your comments in 5 minutes. Thank you. Welcome. STATEMENT OF MICHAEL J. MURPHY, DEPUTY ASSISTANT SECRETARY FOR EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF STATE Mr. Murphy. Mr. Chairman, Ranking Member Lesko, Members of the subcommittee, thank you for you inviting me to appear before you today to discuss the security situation in the Arctic. We are happy to work alongside our Coast Guard colleagues to deepen strategic partnerships in the region. Our goal is a secure and stable Arctic where U.S. interests are safeguarded, the U.S. homeland is protected, and Arctic states work cooperatively to address shared challenges. For more than 20 years, our principal focus in the Arctic has been on promoting cooperation, coordination, and interaction among Arctic states and communities on issues such as sustainable development and environmental protection. Much of this work has occurred through the Arctic Council. As Secretary Pompeo has underscored, the Arctic Council's work is an important part of our agenda. At the same time, we must adjust our Arctic policy to today's new strategic reality which is characterized by the return of great power competition, a change driven by the desire of Russia and the People's Republic of China to challenge the United States and the west. The Arctic is not immune from these implications. In fact, we should expect the rapidly-changing Arctic system to create greater incentives for Russia and the PRC to pursue Arctic agendas that clash with our interests. Russia views the development of the Arctic region as critical to its economic future, and Russia has legitimate Arctic interests. Within the Arctic Council, Russia has cooperated with the United States on issues including oil spill response and search and rescue. However, Russia's restrictions on the freedom of navigation in the Northern Sea route are inconsistent with international law. At the same time, Russia's military presence in the Arctic is growing. In recent years, Russia has established a new Arctic command, created 4 new Arctic brigades, refurbished old airfields and other infrastructure in the Arctic, and established new military bases along its Arctic coastline. It has also made a concerted effort to establish a network of air defense and coastal missile systems, early warning radars, rescue centers, and a variety of centers in the Arctic. The Russian military build-up in the Arctic has implications beyond its waters. From a geostrategic perspective, the Arctic and the North Atlantic are inextricably linked. The Arctic provides Russian ships and submarines with access to a critical Naval choke point, the GIUK gap, that plays an outsized role in NATO's defense and deterrent strategy. Underwater transatlantic cables also run through the area. In short, NATO's northern flank must once again command the attention of the United States and its allies. The PRC presents a different challenge. Its stated interest in the Arctic are primarily focused on access to natural resources and the opportunities offered by Arctic shipping routes. In 2018, the PRC outlined its plans to develop a Polar Silk Road as part of its Belt and Road Initiative. It declared itself a near-Arctic state and signaled an intention to play a role in Arctic governance. This is disconcerting given PRC behavior outside the Arctic where it often disregards international norms. The PRC is seeking greater influence in the Arctic by trying to grow its economic, diplomatic, and scientific presence. Over the past several years, the PRC has secured mining licenses for mineral deposits throughout the region, including uranium and other rare earth minerals. In 2019, it launched its first home-built icebreaker. The PRC is maintaining research stations in Iceland and Norway, and it operates 23 Confucius institutes in Arctic countries outside of Russia and the United States. But as we have seen across the globe, soft power tools have a sharp edge when deployed by the PRC. The PRC has weaponized state capitalism in an effort to secure control of critical dual-use infrastructure. The PRC has demonstrated willingness to use coercion, influence operations, and other methods to get what it wants. This pattern of behavior, particularly the way the PRC has used development of critical infrastructure to establish a permanent security presence, must inform our approach on the PRC's interests and activities in the Arctic. Security challenges exist in the Arctic, but the region is also full of opportunity. It is home to fish stocks critical to global food supply and deposits of minerals essential to the production of advanced technology. As navigation seasons open in the Arctic Ocean, new faster, cheaper, circumpolar navigation and shipping routes may emerge. The Department of State will work to ensure that this region remains open to shared economic and scientific interests and our security interests are protected. More broadly, we want the United States to be a partner of choice in the Arctic. We plan to increase our engagement with and investment in the region. We are working to establish a diplomatic presence in Greenland this summer. We have proposed a new $12.1 million funding package to jump-start our engagement in Greenland. We are also exploring the possibility of increasing the footprint of U.S. Embassy Reykjavik. As a department, we continue to support programs designed to increase the resilience of Arctic communities to malign actors, and we are continuing the good work and strong cooperation of the Arctic Council. Its work on non-security issues makes a vital contribution to Arctic security. Mr. Chairman, Ranking Member Lesko, distinguished Members of the subcommittee, thank you again for the opportunity to meet with you today and to discuss the challenges and opportunities we face in the Arctic. I look forward to your continued cooperation and your questions. [The prepared statement of Mr. Murphy follows:] Prepared Statement of Michael J. Murphy February 5, 2020 Mr. Chairman, Ranking Member Lesko, and Members of the subcommittee, thank you for inviting me to appear before you today to discuss the security situation in the Arctic. We are happy to work alongside our Coast Guard colleagues to deepen strategic partnerships and advance U.S. interests in the region. Our goal is a secure and stable Arctic where U.S. interests are safeguarded, the U.S. homeland is protected, and Arctic states work cooperatively to address shared challenges. The Department of State has fostered strong diplomatic ties with Arctic countries--even before the United States officially became an Arctic state in 1867 with the acquisition of Alaska. Our relationships with our Nordic partners are some of our most important and enduring in Europe, dating back to the earliest days of our Nation's history. Denmark, Iceland, Norway, and Canada are NATO Allies whose troops deploy alongside our own in war zones like Iraq and Afghanistan, while Finland and Sweden are important NATO partners with whom we work closely. Our Northern neighbors are essential to Transatlantic security both in the Arctic and beyond. During World War II, the United States worked with its Arctic Allies--particularly Canada and the Kingdom of Denmark--to establish bases that were critical to the war effort. During the Cold War, the United States and our Allies maintained a robust presence in the High North and the Arctic, which reflected the region's importance to our collective security in an era of strategic competition. With the fall of the Soviet Union, our attention turned to other security challenges, and our approach to the Arctic shifted. For more than 20 years, our principal focus in the Arctic has been on promoting cooperation, coordination, and interaction among Arctic States--with the involvement of Arctic indigenous communities and other Arctic inhabitants--on issues, such as sustainable development and environmental protection. This approach manifested itself in 1996 when the 8 countries with territory above the Arctic Circle--Denmark, Finland, Iceland, Norway, Sweden, Russia, and the United States--formed the Arctic Council. This body serves as the premiere multilateral forum for matters of regional governance. The Council operates based on consensus and addresses issues ranging from Search and Rescue, to maritime pollution, to the health of indigenous communities. Iceland currently serves as the Council's chair, but the chairmanship will transition to Russia in May 2021. The Department of State serves as the lead agency coordinating U.S. efforts in the Arctic Council and in multilateral fora focused on Arctic governance as well as maritime safety and security. As Secretary Pompeo has underscored, the good work that the Arctic Council is engaged in must continue; it is an important part of our Arctic agenda. The United States has no interest in seeing these cooperative activities end. At the same time, we must adjust our Arctic policy to today's new strategic reality, which is characterized by the return of great power competition--a strategic change driven by the desire of Russia and the People's Republic of China to rearrange the global security order by challenging the United States and the West. The Arctic is not immune from the implications of this change. In fact, we should expect the rapidly-changing Arctic system--diminishing sea ice coverage, declining snow cover, melting ice sheets, and thawing permafrost--to create greater incentives for Russia and the PRC to pursue Arctic agendas that clash with United States and Western interests. This could put at risk our collective efforts to ensure the Arctic remains a region of rules-based governance and low tension. Russia is the largest Arctic state in terms of population residing above the Arctic Circle and by geographic area, with over 53 percent of Arctic Ocean coastline. Russia views the development of its Arctic region as critical to the country's economic future, and it has legitimate Arctic interests. Within the Arctic Council, Russia has cooperated with the United States on a number of issues, including education, oil spill response, and search and rescue. However, Russia's restrictions on the freedom of the navigation in the Northern Sea Route (NSR) are inconsistent with international law as reflected in the 1982 Law of the Sea Convention. Since 1983, the United States has viewed the Convention as reflecting customary international law with regard to traditional uses of the ocean and, as such, binding on all States including the United States. The Russian government's threat to use military force to enforce its unilateral assertions about the NSR only further highlights its concerning behavior. Russia's military presence in the Arctic is also growing. In recent years, Russia has established a new Arctic command, created 4 new Arctic brigades, refurbished old airfields and other infrastructure in the Arctic, including deep water ports, and established new military bases along its Arctic coastline. Russia has also made a concerted effort to establish a network of air defense and coastal missile systems, early warning radars, rescue centers, and a variety of censors in the Arctic. In October 2019, we witnessed the largest Russian military exercise in the Arctic since the end of the Cold War. Last fall, Vice-Admiral Alexander Moiseyev of the Northern Fleet announced Russia's intention to deploy S-400's to create ``an air defense dome over the Russian Arctic.'' Russia also maintains the largest icebreaker fleet in the world with over 40 existing icebreakers and more in development. In fact, on January 15, 2020, Russia announced it will invest $2 billion for construction of the world's most powerful nuclear icebreaker. The Russian military build-up in the Arctic has implications well beyond its waters. From a geostrategic perspective, the Arctic and the North Atlantic are inextricably linked. The Arctic provides Russian ships and submarines with access to a critical naval choke point, the Greenland, Iceland, UK Gap (the GIUK Gap), that plays an outsized role in NATO's defense and deterrence strategy. Underwater transatlantic communication cables--the foundation of our communication system with Europe--cross the same waters. In short, NATO's Northern Flank must once again command the attention of the United States and its Allies. The People's Republic of China (PRC) presents a different challenge. Its stated interests in the Arctic are primarily focused on access to natural resources and the opportunities offered by the Arctic sea routes for shipping. As Admiral Ray highlighted, in 2018, the PRC launched its first Arctic Strategy, outlining plans to develop a ``Polar Silk Road'' as part of the Belt and Road Initiative. In that document, the PRC declared itself a ``near-Arctic'' state and signaled its intention to play a role in Arctic governance. This is disconcerting given the PRC's behavior outside the Arctic where it often disregards international norms, as it has in the South China Sea, for example. As Secretary Pompeo noted in a May 2019 speech, ``Beijing claims to be a `Near-Arctic state,' yet the shortest distance between China and the Arctic is 900 miles. There are only Arctic states and Non-Arctic states. No third category exists and claiming otherwise entitles China to exactly nothing.'' The PRC is pursuing greater influence in the Arctic by seeking to grow its economic, diplomatic, and scientific presence. The Department of State fully supports the conclusion of the fiscal year 2020 NDAA that ``China is projecting a physical presence in the Arctic through upgrading to advanced icebreakers, utilizing the Arctic Ocean more regularly through subsidizing arctic shipping, deploying unmanned ice stations, and engaging in large and sophisticated data collection efforts in countries of the Arctic region, including Iceland, Greenland, and Canada.'' Over the past several years, the PRC has secured mining licenses for several mineral deposits throughout the region, including uranium and other rare-earth minerals. In 2019, the PRC launched its first home-built icebreaker and has begun work on a new (potentially nuclear powered) icebreaker. The PRC maintains research stations in Iceland and Norway (on the island of Svalbard). It operates 23 Confucius Institutes in Arctic countries outside of the United States and Russia. As we have seen across the globe, ``soft power'' tools often have a sharp edge when deployed by the PRC. The PRC has weaponized its state capitalism in an effort to secure control of critical, dual-use infrastructure, such as ports, airports, and telecommunication networks. The PRC has demonstrated a willingness to use coercion, influence operations, and other methods to get what it wants, and we have seen this in the Arctic. The recent experience of the Faroe Islands, in which a PRC Ambassador threatened to drop a trade agreement if the Faroese government did not sign a 5G contract with Huawei, is one example. The PRC's objections to Norway's efforts to protect the integrity of the Svalbard Treaty and ensure the island remains a base for only legitimate scientific research is another. The PRC's patterns of aggressive behavior elsewhere in the world, the way the PRC has used Chinese money, Chinese companies, and Chinese workers to develop critical infrastructure in other parts of the globe to establish a permanent security presence must inform our approach to the PRC's interests and activities in the Arctic. The United States is not arguing that Chinese economic investment or scientific research in the Arctic is unwelcome. We welcome transparent, rules-based engagement by the PRC, but the United States and its Arctic Allies and partners must examine the PRC's activities much more closely than we have in the past. The PRC's behavior over the last decade underscores that we cannot and should not assume its good intentions. Security challenges exist in the Arctic, but the region is also full of opportunity. It is home to fish stocks critical to global food supply, oil reserves, and deposits of critical minerals essential to the production of advanced technology. As the navigation seasons in the Arctic Ocean increase, new, faster, and cheaper circumpolar shipping routes between Europe and the United States may emerge. The Department of State will work to ensure the region remains open to shared economic and scientific, and our security interests are protected. Our goal is for the United States to be the partner of choice in the Arctic. We hope to accomplish this by increasing our engagement with and investment in the region. We are actively working to establish a diplomatic presence in Greenland this summer--reopening a U.S. Consulate in Nuuk, which closed in 1953. We have proposed a $12.1 million funding package to jumpstart our engagement with Greenland. We are also exploring the possibility of increasing the footprint of U.S. Embassy in Reykjavik. As a Department, we support people-to-people exchanges to increase English language skills and programs focused on sustainable economic development--all to increase the resilience of Arctic communities to malign actors. We are continuing the good work and strong cooperation through the Arctic Council--a body that has directly contributed to the region's long history of peace and stability. Its work on non-security issues makes a vital contribution to Arctic security. Mr. Chairman, Ranking Member Lesko, and distinguished Members of this subcommittee, thank you, again, for the opportunity to meet with you today to discuss the challenges and opportunities we face in the Arctic. I look forward to our continued cooperation as we work to increase Arctic security. I look forward to your questions. Mr. Correa. Mr. Murphy, thank you very much. Without objection, your statement will also be inserted into the record. Ms. Marie Mak, our next witness, is director for Contracting & National Security Acquisitions with the GAO. Welcome. STATEMENT OF MARIE A. MAK, DIRECTOR FOR CONTRACTING & NATIONAL SECURITY ACQUISITIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE Ms. Mak. Thank you. Good morning, Chairman Correa, Ranking Member Lesko, and Members of the subcommittee. Thank you for inviting me here today to discuss the Coast Guard's role in the Arctic and some key challenges it faces in the region. As in all U.S. waters, the Coast Guard is responsible for maritime safety, security, environmental protection, and National defense among other missions in the Arctic. As the ice continues to recede and human activity increases, the Coast Guard has faced and will continue to face expanding responsibilities in the region. Although ensuring the safety and security of this dynamic region requires a whole-of-Government approach, the Coast Guard's capabilities and capacities are also vital to ensure National security. It is with the icebreakers that the United States can have the assured access to the polar regions as well as to safeguard our National interests. With that said, the 3 areas that I would like to highlight today are first, the capability gaps the Coast Guard identified in the region; second, the current Coast Guard icebreaker capacity in the polar regions; and third, the key risks facing the Coast Guard's acquisition of the new polar security cutters. Specifically, with respect to capability, we found back in 2016 that the Coast Guard identified various gaps in the region which are still valid today. These include but they are not limited to communications, infrastructure, and icebreaking. The Coast Guard has worked to mitigate these gaps with its Arctic partners. But we found during our review that the Coast Guard does not systematically assess how the actions it takes in that area will affect those capability gaps. We made a recommendation to do so, the Coast Guard agreed, and since then has been developing an implementation plan which will provide the foundation for assessments of those capability gaps. Second. When it comes to polar icebreaking capacity, the Coast Guard currently only has 2 operational polar icebreakers, 1 medium, the Healy, and 1 heavy, the Polar Star. The Healy, commissioned in 2000, primarily supports Arctic research, but it cannot ensure timely access year round. The Polar Star, commissioned in 1976 and the only U.S. heavy icebreaker that can break at least 6 feet of ice continuously, is in dire condition and is limited to conducting an annual mission to resupply the McMurdo Station in Antarctica. The last 2 missions, the crew have admirably dealt with flooding and fires in creative ways to replace broken parts. Third. As the Coast Guard continues its effort to address the icebreaking capability and capacity gaps, through the acquisition of the polar security cutter, it is important to recognize that the United States has not built an icebreaker of this kind in over 40 years. As we have found time and time again in our shipbuilding and major defense acquisition work, programs, though well-intentioned, are incentivized and pressured to move forward before they have gained sufficient knowledge at various points throughout the acquisition process. In other words, not having a solid business case. As we found in 2018, the polar security cutter program did not start off with a sound business case either. However, in response to our recommendations, the Coast Guard has signaled a commitment to gaining key knowledge before proceeding. For example, the program assessed its key technologies and is planning to revise the schedule to be more realistic. This program is still early in its life cycle. A key milestone and test of the Coast Guard's commitment to a sound business case will be the start of construction on the lead ship which is slated to begin next year. In conclusion, the Arctic region has increased in strategic importance in recent years. As more nations look to the Arctic for both economic and geopolitical advantages, the demand for the Coast Guard presence will continue to grow. Both the Coast Guard and Congress should remain vigilant in ensuring that the program obtains key knowledge on the ship's design before authorizing construction on the lead ship. Chairman Correa, Ranking Member Lesko, Members of the subcommittee, this completes my prepared statement. I would be pleased to respond to any questions that you may have. Thank you. [The prepared statement of Ms. Mak follows:] Prepared Statement of Marie A. Mak Wednesday, February 5, 2020 gao highlights Highlights of GAO-20-374T, a testimony before the Subcommittee on Transportation and Maritime Security, Committee on Homeland Security, House of Representatives. Why GAO Did This Study The Coast Guard--a component of the Department of Homeland Security (DHS)--is a multi-mission, maritime military service that is responsible for maritime safety and National security, among other missions. Given the Arctic region's expansive maritime domain, the Coast Guard plays a significant role in Arctic policy implementation and enforcement. The Coast Guard is also the sole provider and operator of the U.S. polar icebreaking fleet--a critical component in ensuring year-round access to the Arctic. The Coast Guard is developing the first of 3 heavy polar icebreakers--the Polar Security Cutter--it has acquired in over 40 years. This statement addresses: (1) The Coast Guard's assessment of capability gaps in the region, and (2) key risks facing the Polar Security Cutter acquisition. This statement is primarily based on GAO's June 2016 report examining capability gaps in the Arctic and its September 2018 report examining the Coast Guard's polar icebreaker acquisition. What GAO Recommends In June 2016, GAO recommended, among other things, that Coast Guard develop measures for assessing how its actions have helped to mitigate Arctic capability gaps. In September 2018, GAO recommended that the Polar Security Cutter program develop a program schedule according to best practices. DHS concurred with all of the recommendations, and the Coast Guard is in the process of addressing them. arctic capabilities.--coast guard is taking steps to address key challenges, but additional work remains What GAO Found In fiscal year 2012, the Coast Guard--the primary Federal maritime agency in the Arctic--assessed its capability to perform its missions in the region and identified a number of capability gaps. These gaps, which still exist today, include communications, infrastructure, maritime domain awareness, and icebreaking. The Coast Guard has worked to mitigate these gaps with its Arctic partners, such as other Federal agencies. For example, during a 2015 annual operation in the Arctic, the Coast Guard took steps to enhance maritime domain awareness by testing the Department of Defense's communications equipment, extending communications capabilities further north than previously possible. However, in June 2016, GAO found that the Coast Guard did not systematically assess the extent to which its actions helped to mitigate these gaps. In response to GAO's recommendation, the Coast Guard is currently developing an implementation plan and corresponding metrics for its April 2019 Arctic Strategy. In September 2018, GAO found that the Coast Guard faced 4 key risks when it established the Polar Security Cutter program in March 2018: Technology, design, cost, and schedule. For example, the Coast Guard's initial planned delivery dates of 2023, 2025, and 2026 for the 3 ships were not informed by a realistic assessment of shipbuilding activities. The schedule was driven, instead, by the potential gap in icebreaking capabilities once the Coast Guard's only operating heavy polar icebreaker--the Polar Star--reaches the end of its service life (see figure). [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] GAO recommended in September 2018 that the program develop a realistic schedule and determine schedule risks for the program. In response, the Coast Guard is now tracking additional schedule risks for the program and is in the process of updating its program schedule. GAO will continue to monitor the Coast Guard's progress in addressing this recommendation and other recommendations GAO made to address key risks, such as design and cost, facing the Polar Security Cutter program. Chairman Correa, Ranking Member Lesko, and Members of the subcommittee: I am pleased to be here today to discuss key challenges that the Coast Guard faces in the Arctic, including its capability gaps in the region and efforts to recapitalize the Nation's polar icebreaker fleet--a key step in addressing these gaps. The Coast Guard, a component within the Department of Homeland Security (DHS), is the primary Federal maritime agency in the Arctic and is currently developing the first heavy polar icebreaker it has acquired in over 40 years. As we reported in September 2018, the Coast Guard, in collaboration with the Navy, plans to invest up to $9.827 billion for the acquisition, operation, and maintenance of 3 heavy polar icebreakers--also known as the Polar Security Cutters--over their entire 30-year life cycle.\1\ In April 2019, the Navy awarded an approximately $750 million detail design and construction contract to a shipbuilder for the first icebreaker. As the Coast Guard's only operating heavy polar icebreaker--the Polar Star--nears the end of its service life, the Polar Security Cutters will play a critical role in the Coast Guard's ability to ensure year-round access to the Arctic. Such access affects U.S. economic, maritime, and National security interests in this region. --------------------------------------------------------------------------- \1\ GAO, Coast Guard Acquisitions: Polar Icebreaker Program Needs to Address Risks Before Committing Resources, GAO-18-600 (Washington, DC: Sept. 4, 2018). --------------------------------------------------------------------------- My statement today will address: (1) The Coast Guard's role in the Arctic, including its assessment of capability gaps in the region, and (2) key risks facing the Coast Guard's acquisition of the Polar Security Cutters. This statement is based primarily on our June 2016 report examining capability gaps in the Arctic and our September 2018 report examining the Coast Guard's polar icebreaker acquisition.\2\ For the reports cited in this statement, among other methodologies, we analyzed Coast Guard and Navy guidance, data, and documentation, and interviewed Coast Guard and Navy officials. Detailed information on our scope and methodology can be found in the reports cited in this statement. Since the issuance of these reports, we received and reviewed information from the Coast Guard on the actions it has taken in response to our recommendations. In addition to our prior work, for this statement we reviewed the Coast Guard's 2019 Arctic strategic outlook.\3\ --------------------------------------------------------------------------- \2\ GAO-18-600 and GAO, Coast Guard: Arctic Strategy Is Underway, but Agency Could Better Assess How Its Actions Mitigate Known Arctic Capability Gaps, GAO-16-453 (Washington, DC: June 15, 2016). \3\ U.S. Coast Guard, United States Coast Guard Arctic Strategic Outlook (Washington, DC: April 2019). --------------------------------------------------------------------------- We conducted the work on which this statement is based in accordance with generally accepted Government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. the coast guard has taken actions to help mitigate arctic capability gaps but has not yet systematically assessed its progress in this effort The Coast Guard is a multi-mission, maritime military service that is responsible for maritime safety and security, environmental protection, and National security, among other missions. Given the Arctic region's expansive maritime domain, the Coast Guard plays a significant role in Arctic policy implementation and enforcement. Therefore, as we have reported, as more navigable ocean water has emerged in the Arctic and human activity increases, the Coast Guard has faced, and will continue to face, expanding responsibilities in the region.\4\ --------------------------------------------------------------------------- \4\ Other DHS components and Federal agencies--such as the Departments of Defense (DOD), Interior, and Commerce, and the National Science Foundation--as well as interagency groups also have responsibilities in the Arctic. We found in June 2015 that DOD's strategic guidance on the Arctic establishes a supporting role for DOD relative to other Federal agencies, based on a low level of military threat expected in the region. See GAO, Arctic Planning: DOD Expects to Play a Supporting Role to Other Federal Agencies and Has Efforts Under Way to Address Capability Needs and Update Plans, GAO-15-566 (Washington, DC: June 19, 2015). See also Arctic Planning: Navy Report to Congress Aligns with Current Assessments of Arctic Threat Levels and Capabilities Required to Execute DOD's Strategy, GAO-19-42 (Washington, DC: Nov. 8, 2018). --------------------------------------------------------------------------- In June 2016, we found that the Coast Guard assessed its capability to perform its missions in the Arctic in fiscal year 2012 and identified various capability gaps, including the following:Communications.--Including the lack of communications architecture. Harsh weather conditions, high latitude disturbances, and geomagnetic storms combine to make communications in the Arctic difficult. Arctic maritime domain awareness.--Including limited nautical charting, inadequate navigation systems, and insufficient surveillance. Extremely limited operational assets and support infrastructure in the Arctic, as well as the harsh operating environment, make achieving maritime domain awareness a challenge. Infrastructure.--Including limited aircraft infrastructure on the North Slope in northern Alaska and limited logistical support. Facilities located below the Arctic Circle, and even those within Alaska, provide limited capability to support Arctic missions due to the long transits to the Arctic region. No deepwater ports currently exist on the North Slope or near the Bering Strait that are capable of refueling and re- provisioning polar-capable cutters. This forces the Coast Guard's polar-capable cutters to expend significant time transiting long distances to and from replenishment ports. Development of infrastructure to support operations is challenging, in part, due to the high cost of transporting materials to the Arctic and short construction seasons.\5\ --------------------------------------------------------------------------- \5\ We previously reported on the efforts of the committee on the Marine Transportation System to prioritize Arctic infrastructure, and on the actions taken by Government entities in support of planning and developing U.S. Arctic maritime infrastructure; see GAO, Maritime Infrastructure: Key Issues Related to Commercial Activity in the U.S. Arctic Over the Next Decade, GAO-14-299 (Washington, DC: Mar. 19, 2014). We currently have on-going work examining maritime infrastructure gaps in the U.S. Arctic and expect to issue a report in 2020. --------------------------------------------------------------------------- Training and exercise opportunities.--Including a limited pool of Arctic-trained and experienced Coast Guard personnel, and limited training, exercise, and educational opportunities to enhance Arctic skills among staff. According to Coast Guard officials, few opportunities exist to train in the Arctic, in part, because of limited Coast Guard icebreaking capacity. Icebreaking.--Including limited icebreaking capacity given the Coast Guard's existing active inventory of 1 medium and 1 heavy polar icebreaker, as discussed later in this testimony.\6\ --------------------------------------------------------------------------- \6\ GAO-16-453. --------------------------------------------------------------------------- At the time of our June 2016 review, Coast Guard officials stated that the capability gaps were not the sole responsibility of the Coast Guard to mitigate and did not completely impair or eliminate their ability to perform operations. For example, while communications can be a challenge in remote regions, the risk of lost communications can be mitigated by using multiple assets working together to mitigate risk if lost communications is anticipated. Coast Guard officials also stated that given its activity levels at the time, the mobile and seasonal nature of its Arctic presence, and its ability to leverage partners' resources, the Coast Guard has had sufficient resources to fulfill its Arctic responsibilities. However, Coast Guard officials stated they would reassess their approach as Arctic activity and resulting mission requirements change over time. As we reported in June 2016, if Arctic activity continues to increase, as anticipated, the Coast Guard may have insufficient resources to meet expanded Arctic requirements. In June 2016, we also found that the Coast Guard worked with its Arctic partners--such as other Federal agencies--to carry out actions to help mitigate Arctic capability gaps. For example, the Coast Guard took steps to enhance Arctic maritime domain awareness by testing communications equipment belonging to DOD during a 2015 annual operation in the Arctic, extending communications capabilities further north than previously possible.\7\ However, we found that the Coast Guard did not systematically assess how its actions helped to mitigate these gaps. Such an assessment--which includes developing measures for gauging its progress, when feasible--is critical to the Coast Guard's understanding of its progress toward addressing these gaps. By systematically assessing and measuring how its actions have helped to mitigate capability gaps, the Coast Guard will be better positioned to effectively plan its Arctic operations, including its allocation of resources and prioritization of activities to target the gaps. --------------------------------------------------------------------------- \7\ The annual operation--also known as Operation ``Arctic Shield''--is a seasonal surge operation designed to help the Coast Guard learn how to operate in this increasingly active area of responsibility. Arctic Shield is intended to provide the Coast Guard with the opportunity to: (a) Perform Coast Guard missions and activities, (b) advance maritime domain awareness, (c) broaden partnerships in support of Coast Guard Arctic operations, and (d) enhance and improve preparedness, prevention, and response capabilities in the Arctic. It is also the primary operation through which the Coast Guard carries out activities in the Arctic region and includes the deployment of aircraft, cutters, and personnel to the Arctic region. --------------------------------------------------------------------------- As a result, we recommended in June 2016 that the Coast Guard: (1) Develop measures for assessing how its actions have helped to mitigate Arctic capability gaps and (2) design and implement a process to systematically assess its progress on this.\8\ DHS concurred with our recommendations. As of January 2020, the Coast Guard had not yet taken action to implement these 2 recommendations, in part because the Coast Guard issued its Arctic strategic outlook in April 2019 and is currently updating its corresponding implementation plan for this strategy.\9\ The plan is expected to provide the foundation for systematically assessing efforts to address Arctic capability gaps. Coast Guard officials stated that they are also developing a strategic metrics framework for measuring progress in addressing the capability gaps. Coast Guard officials did not identify when they plan to complete the plan and framework, stating that these are longer-term efforts. --------------------------------------------------------------------------- \8\ GAO-16-453. \9\ U.S. Coast Guard, United States Coast Guard Arctic Strategic Outlook (Washington, DC: April 2019). --------------------------------------------------------------------------- The Coast Guard highlighted the Arctic capability gaps in its 2013 Arctic Strategy and again in its 2019 Arctic strategic outlook.\10\ The 2019 strategy highlighted the need to elevate the Arctic region's prominence as a strategically competitive space due to: (1) The resurgence of nation-state competition from the United States' 2 nearest-peer powers, Russia and China, and (2) reduced ice conditions in the Arctic which have led to increased human and economic activity in the region. --------------------------------------------------------------------------- \10\ U.S. Coast Guard, United States Coast Guard Arctic Strategy (Washington, DC: May 2013); and United States Coast Guard Arctic Strategic Outlook (Washington, DC: April 2019). --------------------------------------------------------------------------- In addition, the 2019 Arctic strategy highlighted 3 overarching goals: enhance capability to operate effectively in a dynamic Arctic domain, strengthen the rules-based order, and innovate and adapt to promote resilience and prosperity. Further, the 2019 Arctic strategy noted that the Coast Guard is the sole provider and operator of the U.S. polar icebreaking fleet--a critical component in achieving the Coast Guard's overarching goals in the strategy--but currently does not have the capability or capacity to ensure access in the Arctic region.\11\ The Coast Guard's polar icebreaking fleet comprises 2 operational polar icebreakers--the Polar Star and Healy of which only the Healy is currently active and operating in the Arctic.\12\ The Healy is a medium icebreaker that primarily supports Arctic research, and while it is capable of carrying out a wide range of activities, it cannot ensure timely access to some Arctic areas in the winter given that it does not have the icebreaking capabilities of a heavy polar icebreaker. See figure 1 for photographs of the Coast Guard's active icebreakers. --------------------------------------------------------------------------- \11\ Under Federal law, the Coast Guard has been responsible for carrying out the Nation's polar icebreaking needs since 1965--when it assumed primary responsibility for the Nation's polar icebreaking fleet. 14 U.S.C. 2 establishes that one of the Coast Guard's required primary functions is to maintain icebreaking facilities for use on the high seas and on waters subject to U.S. jurisdiction, as well as, pursuant to international agreements, to maintain icebreaking facilities on waters other than the high seas and on waters not subject to U.S. jurisdiction--specifically, the Antarctic region. Title 14 authorities do not prevent other agencies from owning or operating icebreakers or ice-capable vessels. For example, the ice-strengthened Research Vessel Sikuliaq, which was commissioned in March 2015 and operates in the Arctic Region, is owned by the National Science Foundation and operated by the University of Alaska Fairbanks. The Sikuliaq, however, is unsuitable for extended operation in the Arctic and can only operate in ice up to 2.5-feet thick. \12\ The Polar Sea has been inactive since 2010 when it experienced a catastrophic engine failure. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] In November 2018, the Coast Guard Assistant Commandant for Acquisition testified that the Coast Guard's current polar icebreaking fleet provides minimal capacity to carry out current icebreaking missions and that the Nation must take swift action to rebuild and enhance this critical National capability.\13\ To this end, DHS approved the Coast Guard's Polar Security Cutter acquisition program's cost, schedule, and performance baselines in February 2018.\14\ --------------------------------------------------------------------------- \13\ U.S. Coast Guard, Testimony of Rear Admiral Michael J. Haycock, Assistant Commandant for Acquisition and Chief Acquisition Officer, on Polar Icebreaker Acquisition before the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation (Washington, DC: Nov. 29, 2018). \14\ The corresponding acquisition decision memorandum was signed in March 2018. --------------------------------------------------------------------------- the coast guard has taken steps to address technology, design, cost, and schedule risks for the polar security cutters In September 2018, we found that the Coast Guard did not have a sound business case when it established the acquisition baselines for the Polar Security Cutter program in March 2018 due to risks in 4 key areas: Technology, design, cost, and schedule.\15\ Our prior work has found that successful acquisition programs start with solid, executable business cases before setting program baselines and committing resources.\16\ A sound business case requires balance between the concept selected to satisfy operator requirements and the resources-- design knowledge, technologies, funding, and time--needed to transform the concept into a product, which in this case is a ship with polar icebreaking capabilities. Without a sound business case, acquisition programs are at risk of breaching the cost, schedule, and performance baselines set when the program was initiated--in other words, experiencing cost growth, schedule delays, and reduced capabilities. --------------------------------------------------------------------------- \15\ GAO-18-600. \16\ GAO, Navy Shipbuilding: Past Performance Provides Valuable Lessons for Future Investments, GAO-18-238SP (Washington, DC: June 6, 2018); Weapon System Requirements: Detailed Systems Engineering Prior to Product Development Positions Programs for Success, GAO-17-77 (Washington, DC: Nov. 17, 2016); Best Practices: High Levels of Knowledge at Key Points Differentiate Commercial Shipbuilding from Navy Shipbuilding, GAO-09-322 (Washington, DC: May 13, 2009); and Defense Acquisitions: Realistic Business Cases Needed to Execute Navy Shipbuilding Programs, GAO-07-943T (Washington, DC: July 24, 2007). --------------------------------------------------------------------------- To address the key risks we identified and help establish a sound business case for the Polar Security Cutter program, we made 6 recommendations to DHS, Coast Guard, and the Navy in our September 2018 report.\17\ The agencies concurred with all 6 recommendations and have taken steps to address some of the risks, as noted below. --------------------------------------------------------------------------- \17\ GAO-18-600. --------------------------------------------------------------------------- Technology.--The Coast Guard planned to use proven technologies for the program, but did not conduct a technology readiness assessment to determine the maturity of key technologies prior to setting baselines.\18\ As a result, the Coast Guard did not have full insight into whether these technologies were mature and was potentially underrepresenting the technical risk of the program. We recommended that the program conduct a technology readiness assessment, which DHS completed in June 2019. DHS determined that 2 of the 3 key technologies were mature and the remaining technology was approaching maturity. The Coast Guard now has plans in place to use testing results to increase the maturity and reduce risks for the remaining technology--the hull form. --------------------------------------------------------------------------- \18\ A technology readiness assessment is a systematic, evidence- based process that evaluates the maturity of critical technologies-- hardware and software technologies critical to the fulfillment of the key objectives of an acquisition program. According to our best practices, a technology readiness assessment should be conducted prior to program initiation. For more information, see GAO Technology Readiness Assessment Guide: Best Practices for Evaluating the Readiness of Technology for Use in Acquisition Programs and Projects, GAO-20-48G (Washington, DC: Jan. 7, 2020). --------------------------------------------------------------------------- Design.--The Coast Guard set program baselines before conducting a preliminary design review. This review is a systems engineering event intended to verify that the contractor's design meets the requirement of the ship specifications and is producible. By not conducting this review before establishing program baselines, the program is at risk of having an unstable design, thereby increasing the program's cost and schedule risks. We recommended that the program update its baselines prior to authorizing lead ship construction and after completion of the preliminary design review. DHS and the Coast Guard agreed and plan to take these steps by fiscal year 2022. Cost.--The cost estimate that informed the program's $9.8 billion cost baseline--which includes life-cycle costs for the acquisition, operations, and maintenance of 3 polar icebreakers--substantially met our best practices for being comprehensive, well-documented, and accurate.\19\ But the estimate only partially met best practices for being credible. The cost estimate did not quantify the range of possible costs over the entire life of the program, such as the period of operations and support. As a result, the cost estimate was not fully reliable and may underestimate the total funding needed for the program. We recommended that the program update its cost estimate to include risk and uncertainty analysis on all phases of the program life cycle, among other things. Subsequently, in December 2019, we found that while the Coast Guard updated the cost estimate in June 2019 to inform the budget process, the estimate did not reflect cost changes resulting from the contract award 2 months prior.\20\ Coast Guard officials acknowledged these cost risks and plan to address them as part of the next update to the program's cost estimate. Coast Guard officials told us that they plan to update the cost estimate by the end of February 2020. --------------------------------------------------------------------------- \19\ The GAO Cost Estimating and Assessment Guide was used as criteria in this analysis. A cost estimate is considered reliable if the overall assessment ratings for each of the 4 characteristics-- comprehensive, accurate, well-documented, and credible--are substantially or fully met. For more information, see GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs, GAO-09-3SP (Washington, DC: Mar. 2, 2009). \20\ GAO, Homeland Security Acquisitions: Outcomes Have Improved but Actions Needed to Enhance Oversight of Schedule Goals, GAO-20-170SP (Washington, DC: Dec. 19, 2019). --------------------------------------------------------------------------- Schedule.--The Coast Guard's initial planned delivery dates of 2023, 2025, and 2026 for the 3 ships were not informed by a realistic assessment of shipbuilding activities. Rather, these dates were primarily driven by the potential gap in icebreaking capabilities once the Coast Guard's only operating heavy polar icebreaker--the Polar Star--reaches the end of its service life. In addition, our analysis of selected lead ships for other Coast Guard and Navy shipbuilding programs found the icebreaker program's estimated construction time of 3 years to be optimistic. An unrealistic schedule puts the Coast Guard at risk of not delivering the icebreakers when promised. As a result, the potential gap in icebreaking capabilities could widen. We recommended that the program develop a realistic schedule, including delivery dates, and determine schedule risks during the construction phase of the program. In response, the Coast Guard is now tracking additional schedule risks for the program and is in the process of updating its program schedule. Further, in December 2019, we found that the contract delivery date for the lead ship, May 2024, is 2 months after the delivery date in the program's schedule baseline.\21\ Coast Guard officials said they plan to address this risk when they update the program's schedule by the end of March 2020. --------------------------------------------------------------------------- \21\ GAO-20-170SP. --------------------------------------------------------------------------- In summary, the Arctic region has increased in strategic importance in recent years, and with the increase comes more responsibility for the Coast Guard. The Coast Guard has emphasized that as the Arctic continues to open and strategic competition drives more actors to look to the Arctic for economic and geopolitical advantages, the demand for Coast Guard leadership and presence will continue to grow. As the Coast Guard embarks on the acquisition of its new polar icebreakers, it faces a number of key acquisition risks. The Coast Guard has begun to take steps to address these risks and must remain committed to executing a sound business case for the program to mitigate capability gaps in the Arctic. To this end, we will continue to monitor the Coast Guard's progress in addressing our recommendations. Chairman Correa, Ranking Member Lesko, and Members of the subcommittee, this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time. Mr. Correa. Thank you, Ms. Mak, and I thank all the witnesses for their testimony. Now I will remind each Member that she or she will have 5 minutes to question the panel, and I will recognize myself for 5 minutes of questions. The first question to all of you. Listening to your testimony, I am trying to figure out where we start. It is such a huge issue with so many parts. So for each witness, I would ask what do you see as the single biggest challenge facing the United States, and in particular, the Coast Guard in your role in the Arctic? Admiral Ray. Admiral Ray. Sir, Mr. Chairman, I think as was stated by Ms. Mak, we have been a long time in coming, over 40 years, in building a polar security cutter or heavy icebreaker. So now that we have gotten started, we have got to get it right. In the meanwhile, Polar Star, as was stated, our current icebreaker, she right now is at McMurdo Station in the South Pole as we sit here today, and she successfully broke it out. By break it out, I mean they opened up the channel where they could get the resupply vessels in, and so she is doing her job. We have got a plan to extend her service life. We will start work on that so when she comes home in our summertime, their wintertime down at the South Pole, we will spend extra time in the yard, extra funds to extend her service life. So we have got to keep her in service until this new polar security cutter that Ms. Mak was talking about comes out of the yards which is projected in 2024. So that overlap time between now and then is critical time. We have got to maintain this aging ship and get the new ship going while being mindful of all the challenges of the first ship of a class coming off the way. Mr. Correa. Thank you. Mr. Murphy. Mr. Murphy. I would just echo what the Admiral said about presence equaling influence and leadership. Certainly the State Department shares the view that a greater Coast Guard presence in the Arctic would be a positive thing in terms of shaping the strategic environment in the United States' favor. With regards to the State Department itself, there is a change going on in the Bureau of European Affairs where seven of the Arctic states or 6 of the 7 Arctic states in the Arctic Council are located, we have have a new strategic environment with regard to the challenges we are seeing from China and Russia. In the past before the acknowledgment of the great power competition paradigm which we now find ourselves in, we saw Europe primarily as a platform for partnerships outside the region. We are now in a theater of operations ourselves much the same way that other parts of world have been, you know, prior to this. So the United States State Department, the Bureau of European Affairs, needs to make that transition from a platform for operations outside the continent, whether in the Arctic or elsewhere, to what I will call a war-fighting command in much the same way that UCOMM is doing in response to the challenges we are seeing from Russia and China. That is one of the reasons we are working on presence in the Arctic region itself. Mr. Correa. Ms. Mak. Ms. Mak. Both the Department of Defense and the Coast Guard Arctic strategies have highlighted some of the same capability gaps that I mentioned earlier like communications, maritime domain awareness, infrastructure, icebreaking, and training opportunities. So in order to really figure out what the top priorities for the United States should be, there needs to be a whole-of- Government approach to determine which priorities in these gaps are the most urgent and how to proactively address all these gaps, which one is most important to address first. But it is important that--we tend to be more reactive. It is really important as a Government that we be proactive. By the time the threats are imminent in the region, it will be too late. Mr. Correa. So we are kind-of chasing the issues as opposed to planning long-term anticipation of developments, yes? Ms. Mak. Yes. Correct. Mr. Correa. Thank you very much. I am going to yield the remainder of my time and ask Mrs. Lesko to engage her 5 minutes of questions. Mrs. Lesko. Thank you, Mr. Chairman. My first question is to both Admiral Ray and Mr. Murphy, and it has just kind-of a basic question. There are so many needs throughout the world and to protect us. Do you think this concern about the Arctic and competition in the Arctic, and making that sure we have a presence in the Arctic has risen high enough to the level to get the attention of top people as a priority? Mr. Ray. Well, I think it is certainly--it has not been but recently that we received the attention of subcommittees such as this one and the Congress and the people who have the opportunity to provide the resources to do what we need to do to have that presence that Mr. Murphy is talking about. I think likewise within the administration, we have got great support for the polar security cutter program, incredible support, and so right now, I think this has reached the highest levels of Government. In the Coast Guard, we have been talking about this for, I don't know, a decade, at least, and it was seen before as kind- of an Alaska problem. I don't see that as the situation any more. I see this as everybody understands it is a National priority, and both from the Congress and from the administration, we have got the support we need. It is just we have got to--there is additional things besides polar security cutters that we need to get after. As Ms. Mak talked about, there is communication and other capabilities, and we can discuss those as you see, but I think generally speaking, this has gotten the attention now that we need it to have. Mr. Murphy. I would agree. When I started my job about 2 years ago, security in the Arctic really wasn't on my agenda at all. It was a traditional Nordic Baltic European security portfolio. That change has come about directly as a result of the secretary putting it on our agenda and making clear that we in the Bureau of European Affairs need to focus on the Arctic security piece of what is happening, you know, not just the Arctic Council-type issues that we focused on in the past, important as though they are. The work that we are doing now to put a permanent presence in Greenland, a new consulate there, and we are looking at, as I said in my remarks, expanding our presence in U.S. Embassy Reykjavik. I am working directly with the counselor who has been directed by the Secretary of State to make sure this happens. So I have seen a big change in both support at the top and in the energy behind these issues in my 18 months in the State Department in my current job. Mrs. Lesko. That is good to hear. It is good to hear. Another question for Admiral Ray is, Ms. Mak talked about in her testimony how, you know, the Coast Guard had problems tracking and measuring progress in the Arctic region, and she said that the Coast Guard has agreed to the recommendations. So can you expand upon that? Like, what has the Coast Guard been doing not only on that, but she also said like a business plan to purchase and acquire the Coast Guard cutters? Mr. Ray. Yes, ma'am. Well, I think there has been a combination of events that have allowed us to put forth the persuasive argument that the Nation--this is a National problem, that we need to operate there and that we are not--the resources that we had appropriated to this mission were insufficient for what the Nation needed to do. So I have worked with Ms. Mak over the last few years. What they do is kind of help us look at our plans moving forward, whether it is the acquisition of a National security cutter, and that is a tough thing to do. It is a specialized construction. So what we did, largely according to their advice, A, we partnered with the Navy in order to have an integrated program office. So the specialized ship work construction is really not that different than building a submarine which is a specialized construction. So we had Navy leadership that has experience in that working with us throughout the way. She also talked about our, you know, not really understanding the state-of-the-art with regards to technology. So we did industry studies which we paid for industry to analyze this problem before we put out the request for proposal, and that really made a big difference. It really narrowed us down with regard to technology that we would use different than what Polar Star has now with regards to what is available on the market, kind-of the state of the market. So I think we have been specifically following their guidance on this, and then the whole process of the acquisition. That requires attention. With regards to the other capabilities, Ms. Mak's exactly right. I mean, it is difficult to communicate. When you get north of the North Slope up in Alaska or north of that same latitude in Greenland or anywhere, it is difficult. It is difficult to navigate. It is difficult to do everything that you do down here. That is why this presence and being there in the interim--you don't just show up in the Arctic and decide to operate there. You need to be working on it every day. We have been about that through an operation called Arctic Shield that we have been doing for the last several years. So I think we have been not 100 percent with what GAO would have us to do, but we have been working down that path. Mrs. Lesko. Well, that is wonderful, and I want to thank all of you for working on this important issue, and I agree with Chairman Correa. We need to continue to support our efforts up there, and I yield back my time. Thank you. Mr. Correa. Thank you, Mrs. Lesko. Now I recognize Ms. Barragan for 5 minutes of questions. Ms. Barragan. Thank you. I want to thank the panel for being here today. Thank you, Admiral, for your work and that of the Coast Guard. I represent the Port of Los Angeles, and you are very--the work that you all do there, the men and the women, is remarkable, so I want to thank the Coast Guard for its work. We were handed out this little chart here that shows the icebreakers of the world, and it is pretty remarkable to see Russia at 53 plus 6 under construction and 12 planned and the United States only at 5. It is more than 10 times as many. That is quite remarkable. I am hoping we can talk a little bit about what that means. But before I get to that, Admiral, does the Coast Guard believe in climate change? Do they take a position on it? Mr. Ray. Ma'am, what we have stated pretty consistently over the years is we remain pretty agnostic about it. What we know is there is water where there used to be ice, and we have a job to do there. That is how we go about that. Ms. Barragan. So the Coast Guard's 2013 Arctic strategy attributed decreases in sea ice coverage explicitly to climate change. However, the 2019 Arctic strategy avoided such an attribution and merely acknowledged a changing climate. As the Coast Guard plans for its future needs over the coming years and decades, it must use the best scientific estimates for what the climate and sea levels will look like. How does the Coast Guard incorporate the scientific models and projections into its planning activities? Are the Coast Guard's projections for future needs driven by scientific consensus or politics? Mr. Ray. Well, we base it on science, and thanks to the support from this committee and others. In fact, what we have seen, as I know you're aware, the hurricane supplemental money we have received from the 3 years of storms we had down south, along the gulf and in Puerto Rico and the Virgin Islands. So what we are doing is we are building our stations back with an acknowledgment that in the future, the ocean conditions and the coastal conditions are going to be different than they are now. So we have got to build back in a more resilient type infrastructure. So we are, I think, clearly acknowledging that it is a changing environment, and we need to be able to operate in it, and we don't have the luxury of not being close to the coast because that is where our business is. So we are building back more resilient facilities. Ms. Barragan. So you mentioned that the ice is melting. Is there any other environmental changes that occurred in the Arctic? What type of changes do you project for the future in the Arctic? Mr. Ray. Yes, ma'am. There are multiple things that are changing. One of the things that I talked to the Chairman about the other day is the fish stocks are--we have got indications from working with NOAA that fish stocks are migrating further north as there is a slight warming in the Bering Sea. The fish stocks are moving north. So the Bering Sea is a really important fishery to the Nation. Probably better than 50 percent of the Nation's, you know, seafood products that we consume come from the Bering Sea. So those fish stocks migrating north that is a---- Mr. Correa. Can you repeat that again, that statement you just mentioned? Mr. Ray. Yes, sir. About 52 percent of the seafood products that American consumes, you know, sells that we harvest from the ocean come from the Bering Sea which is just south of the Arctic Circle, the biggest part of it is. I have been up there, you know, quite a bit, operated up there, and that is a well- managed fishery. There is a lot of cooperation where there is a rarely- defined border between us and the Russians, so it is a well- managed fishery. Then as those fish stocks migrate north, those that would take advantage of a less well-defined structure, they will do that, and so we have to be mindful of that. So fish stock is moving north. There are changes, if you talk to the indigenous people which I have many times, there are changes to the migration patterns of marine mammals that they depend on for subsistence living. They go further offshore to look for whales. I could go on and on, but suffice it to say there is changes. Then equally with regards to the environment, there are changes to the permafrost that they depend on, they built on, and that has been frozen for eons. As that has, you know, it has changed, then you have got to watch some of the infrastructure that they have got in those native villages out there. So that is the summary of the changes I am aware of, ma'am. Ms. Barragan. Great. Well, thank you. I am definitely concerned with climate change and what it is doing to the region and the impact it is going to have on National security. With the time remaining left, you know, if you take a look at the chart, as I mentioned, there is a pretty remarkable difference between the icebreakers that Russia has and China has. Should the United States be concerned that it is lagging so far behind Russia and China? Maybe one of the other panelists want to start. Mr. Murphy. I won't speak to Coast Guard-specific points, but yes is the short answer to the question. One of the reasons the State Department is working to enhance its presence in the region and diplomatic engagement is precisely because we see our adversaries doing the same. We have to move beyond a point where we are focused solely on the one element of Arctic policy that we have been focused on over the past 20 years, as important as it is, the work of the Arctic Council, to ensuring we inject respect for and concern about Arctic security into what we do every day. That is precisely what the Secretary has asked us to do, and that is what lay behind, for example, our decision to open a new consulate in Greenland. Ms. Barragan. Admiral, do you want to chime in before I yield back? Mr. Ray. Well, I think what we propose in the Coast Guard is 6-3-1, so I think trying to catch the 53 is not something that we think that is aspirational for us. We talked about 6 icebreakers total we need to do the job. We need to do both poles. Three of them need to be heavy icebreakers, and we need the first one right now as we have talked about. We will reassess that as we move forward, but the critical thing is to get that first one off the ways at the shipyard. Mr. Correa. Thank you, Ms. Barragan. Now I recognize Mr. Katko for 5 minutes of questions, sir. Mr. Katko. Thank you, Mr. Chairman. First of all, I never want to miss an opportunity to tip my hat to the Coast Guard. I have worked with you for 20 years when I was in Puerto Rico and back in upstate New York and around the world, and you do a remarkable job, and you have to wear many hats. From a law enforcement and organized crime standpoint, you do an awesome job. I just want to thank you to you and all the men and women who work under you for the great job that they do, so thank you for that. I am absolutely convinced that we obviously need to plus up the forces up and the icebreakers and the ships. I agree with you, Admiral. We can't get to where Russia is, nor do I think we need to, to be effective. I think my colleagues have pointed that out pretty well as well. But I want to take a step back and understand from a bigger picture standpoint, maybe we can start with Mr. Murphy on this issue, and that is I want to understand the interplay with Russia better, and China, and the United States as I understand it, Russia does have somewhat of a decent working relationship to some extent with the United States on this issue. China seems to be trying to elbow their way in. So what do you see are the issues going forward if you can summarize them for us the best you can and the interplay between all 3? What are the real threats? Mr. Murphy. Sure. You are right. Russia does have a good working relationship with the United States and the other Arctic States within the Arctic Council, and we have done some great work on search and rescue, good scientific collaboration, responses to oil spills, things of that nature. That has been positive, and we want to make sure we don't lose that. There is no reason to want to lose that. The Russian challenge is, of course, the military build-up that is not just occurring, of course, in the Arctic. This is all related. It is occurring in the east and sort of the you know, the Russian behavior in Europe more broadly in terms of, you know, violating international rules and norms and the actions it has taken in the Donbass and Crimea and Georgia. I mean, we have seen that Russia can flip a switch and go from--you know, to a military--take a military approach to pursuing its interests if it wishes to, and we need to respond as allies and in the United States within, you know, NATO to the challenges that the Russians are now posing to us in the Arctic and North Atlantic militarily. With regards to China, it is a bit different, of course. They have not established a military presence in the Arctic. But they are very aggressively pursuing economic and other interests in the Arctic in ways that are disconcerning given some of the claims that they are making about where they want to be involved in Arctic governance as a near Arctic state. Mr. Katko. A near-Arctic state. Yes, yes. Mr. Murphy. Which is malarkey. There is no such thing as a near-Arctic state. There are Arctic states and non-Arctic states. China is the latter, not the former. The Arctic Council works fine, thank you very much, without China. But we have to be cognizant of the fact that what looks relatively benign on the surface, an economic investment, here a piece of scientific cooperation there, may have long-term military purposes. We know from reading some of the journals, the scholarly journals, the Chinese have been quite clear about their intentions there, and we need to begin countering that influence now. We don't want to wait and wake up and find some day that we have lost control of a port somewhere or an airfield somewhere that we need for our own security and defense or that we need to protect and defend our allies. Those are the challenges. Mr. Katko. So--thank you. That is a great summary. It is very helpful. Just a couple follow-up questions and one observation and one question. The observation is China has got the money to do the build- up. I question whether Russia has the ability to sustain itself given the fact that oil is remaining at a low price on the international market, and their economy is not as strong as it once was and maybe never was. Just how much money can they dedicate to this constant build-up that they are contemplating? Mr. Murphy. The challenge is one of near-term and long- term. Mr. Katko. Right. Mr. Murphy. They are really short-handed. As we have seen from Russian behavior not just in Europe or in the Arctic but in the Middle East and in South America and in Africa, they have the resources to be very aggressive and to challenge our interests where they want to when they want to despite the challenges you allude to facing their economy and their long- term prognosis of their economy. So we need to--we can't wait and hope that history is going to bend into a particular direction. We have to help shape our forces in our own favor, and that is one of the reasons I think we still need to continue to pay attention to Russia and push back where it is necessary. Mr. Katko. This is very helpful. Thank you very much. I yield back, Mr. Chairman. Mr. Correa. Thank you very much, Mr. Katko. I recognize Mr. Bishop for 5 minutes of questions. Mr. Bishop. Thank you, Mr. Chairman. You know, being very new in Congress and listening to this, even if you didn't have anything about the climate change and new routes in the Arctic and increased global great power competition as you put it, Mr. Murphy, it would be easy for me to see that the need for a heavy icebreaker, if you have got one and it is flooding and burning as it is exercising its mission, it has got to be replaced. I get that. That seems to be largely what we are talking about, at least in the immediate future. I understand there is a plan that goes farther out. I understand, Mr. Murphy, that you are talking about responding to the challenges by having a new consulate in Greenland. But when you describe the phenomenon and characterize it as a great power competition, the same sort of phenomenon we are seeing in the South China Sea and so forth, those responses sound to me, just as a matter of common-sense, a little inadequate. Now, that doesn't mean that I believe that I think we have the means to project American power in a much bigger way because that consumes a tremendous amount of resources. But I do wonder about that. Could you, Mr. Murphy, maybe first and then, Admiral Ray, if you would address that apparent mismatch between what is being suggested as the response and the nature of the dynamic that you are describing? Mr. Murphy. I think, you know, we have to look at this as something that doesn't happen in a week or a month. It takes time. We went through pivot points in our strategic in the past and strategy when in 1945, 1989, and, you know, 2001, and it took time to get from where we wanted to be--from where we were to where we wanted to be. I mean, Germany didn't join NATO until 1953. It didn't come out of whole cloth in 1945 at the end of the war. I think what you are seeing is the U.S. Government and the Legislative and the Executive branch making adjustments to this new strategic reality. So I would argue that the consulate in Greenland is an example of that, but it is not all that we are doing. The Bureau of Economic and Business Affairs in my department and the Bureau of Energy Affairs are vigorously involved in dealing with the threats posed by 5G networks coming from China, for example. We have been very forceful in pushing back against unfair Chinese trade practices, for example. It is not just--you know, when you talk about it in the context of the Arctic, it is in part about presence now because we haven't been as present as we need to be. So it is just one piece of the puzzle. I wouldn't characterize it as the whole. Mr. Bishop. That is helpful. Admiral Ray maybe, I think what maybe we are seeing here is a glimpse of a piece given this committee's jurisdiction of the response to that new dynamic. Can you characterize how it is that, you know, for the immediate near future, 1 new heavy cutter in relationship, you know, to Russia's assets that have been described, how that materially changes the way America has a presence in the region. Mr. Ray. Yes, sir. It is really pretty--what our strategy and the number that sticks that I talked about earlier, the first one being important, is it allows us to be present there. So we have got--the Department of Defense has great assets, and they protect us under the ocean and in the skies, the greatest in the world, but you have got to have an on-surface presence to contest these folks. We can talk about in a different setting, you know, exactly what has happened in the past where they just kind-of push the envelope, push the envelope. If you are not there to stand up to them and say, ``Hey, what are you doing?'', that becomes a challenge. So really, what happens when you build a heavy icebreaker, that allows you to be up there anywhere you want to be in the Arctic pretty much year round. There are certain times that would be a little too bad, but you can be there any time. Do we need to be there this winter? Probably not. But if you look at the way it is trending, we need to have the capability to operate up there all year round. That is what these will do for us. Mr. Bishop. Thank you, Admiral. Mr. Murphy, one other question, I think. Can you characterize, maybe, what does the interagency partnership look like across the Government to respond to the Arctic, the situation in the Arctic, and which agency spearheads it? Is it State? Mr. Murphy. It depends on the issue, of course, but in general, the Department of State leads in preparing and managing the relationships that occur within the Arctic Council which brings together a whole slew of agencies, including the Coast Guard, with whom we partner greatly and coordinate greatly in the work that they are doing in the Arctic Council working groups on things like search-and-rescue and oil spills and whatnot. We work very closely with the National Science Foundation and NOAA which are also involved in the Arctic Council work. My team, in my office, work very closely with the Pentagon, the civilian side and the military side, to deal with the challenges in the Arctic as they look through the lens of NATO which is one of my areas of responsibility. The interagency has been pulled together several times, many times, by the National Security Council to discuss how we respond to and what we do in the context of the new challenge in terms of Arctic security, so it is myriad and multi-faceted. What is interesting, and I say this as someone who has been learning about this myself over the last 8, 9 months, is there are a lot of strands here. But what I am consistently impressed with is the dedication and the commitment of the people with whom I work right across the interagency process to getting this right for the United States which is what I think they get up every morning and try to do. Mr. Bishop. No doubt. Thank you, sir. Thank you, Mr. Chairman. Mr. Correa. Thank you Mr. Bishop. I recognize Mr. Van Drew for 5 minutes of questions. Mr. Van Drew. Thank you, Chairman. I want to thank all of you for the work that you do. Particularly, I have had a relationship with the Coast Guard as well and wanted to echo Congressman Katko's words. As you know, we have the training center for the entire United States in Cape May in my district, actually, only a few minutes from my house. So we really do appreciate the work that you do. I am going to ask an elemental question, a basic question. You know, they say there is no such thing as a stupid question, so here we go. How is this governed? In other words, how does this operate? Like, what gives China the right to just be up there or Russia or us? How does this whole system work? Mr. Murphy, I guess I would start with you on that. Mr. Murphy. That is fair enough. Well, obviously within the context of the Arctic Council which is the principal form for the Arctic states to---- Mr. Van Drew. Which is made up of those states---- Mr. Murphy. The Arctic states. That is exactly right. There are 8 of them. Canada, the United States, of course Denmark, Norway, Iceland, Finland, and Sweden, and Russia. That, by design, the remit of the council is not on security issues. It is focused on things like environmental protection, search and rescue, scientific research. It was deliberately designed that way when it was inaugurated in 1996. They have been engaged in partnerships across the board on those types of issues, and they sort-of set the rules, if I can put it that way. The lawyers probably will probably tell me that is too strong a word, but they more or less set the rules for Arctic governance. Now, they don't have the ability to enforce those rules. It is up to the individual member states of Arctic Council themselves which has happened. That partnership occurs also with indigenous peoples and indigenous groups across the Arctic states and non-indigenous Arctic communities that are living in the Arctic. Mr. Van Drew. So it is a little complicated. Mr. Murphy. It is a little complicated, but it works. The most important thing to remember is it works. For 20 years, it has produced results. Mr. Van Drew. So let me ask this question, exactly how it happens. So China, of late, has been more involved, correct? Mr. Murphy. They have been more assertive in pushing their presence into the Arctic. Mr. Van Drew. To whom did they have to go to get permission to do that? Mr. Murphy. They don't have to ask, for example, to seek investments in critical infrastructure in Finland or Norway or---- Mr. Van Drew. But the group that is there, that council agreed that they could be there. Mr. Murphy. Every nation has the right to seek investments in foreign countries. What we need to do as the governments of the Arctic states ourselves is make sure that we are looking at those and asking ourselves are we screening them? Should we allow control of a port or an airport to fall to the Chinese? Should we allow them to obtain controlling stakes in sensitive minerals and mining areas? That is on us. One of the things the Department of State has been doing with others in the interagency is pressing not just these states but countries world-wide to put in place exactly these kinds of investment screening mechanisms, for example. Do we want them to control information technology, and you know, 5G networks where they might use for nefarious purposes, and we are pressing in those areas. Mr. Van Drew. Each person has 1 vote? Mr. Murphy. In the council, yes, and it is a consensus- based organization. So we have to distinguish between the individual projects the member states agree to take up in the working groups that they are engaged in and then the broader set of challenges, you know. China can sail in international waters, and I am really going to defer to the Coast Guard on this, just as we can. What we wanted to do is to respect the rules-based order and be transparent in the way that it goes about, you know, asserting its--being present or engaging in economic---- Mr. Van Drew. A little bit more than most modern governments interactions in cities, it seems a little bit more of a little--I am exaggerating a little bit here, but Wild West type of atmosphere compared to what you see in most of the world or at least a good part of the world. It seems like an open territory where people can kind of go in and, to some degree, do what they want. Mr. Murphy. I think because the Arctic is changing, there are opportunities opening up that weren't there before in terms of shipping and other places that create these potential challenges you are alluding to, yes. Mr. Van Drew. In the future because of that, and then I will just wrap up, but two things. No. 1. I agree with you, absolutely it is unbelievable. We need these Coast Guard cutters for sure, you know. We need to make sure that we have this equipment. Second, I think it is important probably as we go forward that the scrutiny might be greater because of what is going on and the changes that are occurring on our earth. Third, I do think that there are changes, climate changes that are occurring, but regardless of the climate changes, we have a responsibility as far as the resources that are up there, and we have a responsibility as far as safety and governance to ensure that we have our rightful role of having some control over what is going on in the future because, you know, the one thing we can talk about climate change all we want. Whatever you believe and whatever is going to happen, it is not going to be cured like that. So this process, to some degree, is going to go on, and we have to be able to control it. I think that is what you are trying to say, and I think you are absolutely right. Mr. Murphy. I think a secure and stable Arctic where U.S. interests are safeguarded, where our homeland is protected, and where Arctic states work cooperatively on some of these challenges is exactly what we are aiming for. It is irrespective of any other sort-of issue going on, you know. Mr. Van Drew. Last question on this. What is the time frame--I know Russia has been involved a long time, but for China. What is the time frame where they have really gotten active there? Mr. Murphy. It goes back---- Mr. Van Drew. Just a ballpark. Mr. Murphy [continuing]. Several years, 3 or 4 years, at least. Mr. Van Drew. So yes. This is a relatively new activity on their part. Mr. Murphy. You know, I think the administration's National security strategy does an outstanding job highlighting this geostrategic shift that has occurred in the world. I think it was happening before 2014 with regards to Russia, for example, before a 2016 attempt by the Chinese to make a purchase in Greenland of what was a formal Naval base of the United States. But it crystallized everyone's thinking. It is a new frame. I see, you know, strong bipartisan support in my job from this body but also outside in think tanks and the NGO community moving forward to put in place the tools that we need to succeed in that frame and protect our interest and our security and ensure the prosperity for the American people as we did for the last 75 years. Mr. Van Drew. Absolutely. I think we have to keep an eye on them. Thank you. Mr. Correa. Thank you Mr. Van Drew. I would like to move into a second round of questions, if we can, and I wanted to start out by asking, Admiral Ray without getting into political issues of global warming, I would ask specifically. I presume the Coast Guard has a plan, has some projections in terms of what assets will be needed in that area of the world based on less ice the next 5, 10, 15, 20, 50 years. Am I correct in that assessment? Mr. Ray. Yes, sir. We have talked a lot about the polar security cutters, but there are other assets that we will need to operate up there as well. Mr. Correa. So coming back to that chart Ms. Barragan put up and that shows that we are way behind when it comes to icebreakers when you compare us to the Russians and some of the others, but there is other ways to multiply, so to speak, our assets to make sure that we have other non-icebreaker capabilities to assure that we have some kind of a semblance of control and enforcing rule of law in that area? Mr. Ray. Yes, sir. As was stated previously, the ability to communicate up there requires use of new technology. We did an experiment--not an experiment. We did a test starting 2 years ago with small satellites that were launched with SpaceX to a lower polar orbit to allow us to communicate, and this was, you know, pretty--it was funded by DHSST, and it was--we learned a lot during that. It wasn't intended to become operational. We learned a lot. So that is an example of things that we need to do to get into that line of business. There are things we need to do with our aviation assets that we need to operate up there. I think the most important thing that we kind-of believe is the secret to the Coast Guard's ability to be agile is you can't cover the whole thing from fixed bases is to have these movable resources that you can---- Because in 2015, it was all about Shell drilling for oil, and we were all stationed over in what I will call northwest of Utqiagvik. More recently, the ecotourist traffic is further to the east, you know. When I say further east, several hundred miles. So we have got to be agile and able to move around. Mr. Correa. Mr. Murphy, you made a statement that the administration now understands the importance strategically of this area to our Nation. But I would say--just from a gut reaction here, I would say that we as a Nation do not appreciate the importance of this region to our country. Unless you are on the front page of the newspapers every day, unless you begin--you know, really push this in front of the public, our policy makers are probably not going to look at this. This committee, this is the second hearing we have had on this issue, and we are trying to push this information out to the rest of our colleagues. It is important because long-term, pennies invested today will save us a lot of headaches and a lot of dollars in the future. We talked earlier, Admiral, about the fish stock and the Bering Sea, 52 percent of our fish and a huge percentage of our protein coming from that area. You talked about the fish migrating north, so my question is are they migrating north, or are they expanding north? Mr. Ray. Probably the--I think it is more toward--I will call it relocating, at least from the signs we have seen thus far. So the fish stocks are---- Mr. Correa. That would concern me a little bit because we are talking about food stock. Twenty, 30 years' worth of food will be a strategic weapon in the world. We want to make sure that the United States has its food supply secure. Finally, I would just say planning for the future, what can we do as a committee to make sure that we inform our public, our constituents, our colleagues of your important--and not only in the region but of the Coast Guard. I just got back from New Zealand. Those folks were talking raving reviews about the Coast Guard and how they work on these vast swaths of water to protect, to rescue folks. We look at North Korea, how you are involved in the blockade, OK, of North Korea to make sure that we are enforcing international law. You are working everywhere; South America, Central America, the Caribbean. Yet your resources are very limited. How can we get that message out to our colleagues that we need to take care that you do have the resources and the assets to do your job? Mr. Ray. Well, thank you for your observations, Mr. Chairman. I think, you know, as we look over the support that we have received, the resources recently, the thing that we come back to is talking about our readiness. Our readiness allows us to take resources from New England and surge them down to the Gulf Coast to respond to a hurricane. It is what allows us to do this Arctic work. So when we talk about readiness, that is the kind-of the day-to-day operational and maintenance funding that the Congress provides us. While the Department of Defense got a plus-up of about 12 percent as they plussed-up their readiness, we were not much above flatline. So if I was going to, you know, focus on one thing and a general subject, it is operational and maintenance funding to go toward improving our day-to-day readiness. Mr. Correa. Thank you very much. Now Ranking Member Lesko. Mrs. Lesko. No further questions Mr. Chair. Mr. Correa. Mr. Bishop. Mr. Bishop. Thank you, Mr. Chairman. Just very briefly. Mr. Murphy, you offered some helpful comments about sort-of the overall picture and it being a gradual and intentional process to expand resources, consulates, icebreakers, but many other things. I am curious how--you know, whether there is a similar process going on vis-a-vis allies. So you have on this sheet of the icebreakers that was made reference to earlier Canada, the Nordic states, Finland, Sweden, Denmark. They are all making investments. They seem rather modest. Can you character--and of course, we are looking at icebreakers here and all of that. But can you characterize that picture too? How about--you mentioned the Arctic Council, and I assume we do work--all those Nations do work there. But do our allies engage and are they prepared to expend the resources that the United States is expected to expend to respond to this problem? Mr. Murphy. That is a good question, and I think the answer to that question is yes. I mean, there has been a tremendous bump in investment in shared burden sharing challenges by the allies over the last several years, and that is a real positive. This administration deserves a lot of credit for affecting that change. But I also see, to use a specific example in the context of dealing with some of the emerging military challenges that the Russians are posing in the Arctic and in the North Atlantic. You see the Icelanders, for example, making investments in the Keflavik platform which we are using with our allies to conduct P8 missions. You have seen the Norwegians making investments in sensor technology and other areas so we know what is going on, situational and domain awareness. The United Kingdom is going to get back into the P8 antisubmarine warfare mission, something they had gotten out of at the end of the Cold War, so there are changes taking place. They take longer to come on- line than we would all like, but they are happening. Mr. Bishop. Thank you, Mr. Chairman. I yield back. Mr. Correa. Mr. Van Drew. Mr. Van Drew. Just one quick question and one remark. Ms. Mak, you said, you know, obviously we have to get these things accomplished and done before it is too late. I agree with you, by the way. What would you characterize as too late, just complete control of the area by all these other nations, or how would you characterize that? Ms. Mak. My perspective is really from an acquisition perspective and really meaning that as the Coast Guard is pursing the polar security cutter, it needs to do things the right way and have the right appropriate knowledge before it moves forward to construction because we have seen a lot of other--a lot of work in our shipbuilding reviews where there is pressure to move forward and award construction. They start building the ship before the design is complete numerous times on Navy ships and Coast Guard ships. It ends up costing more and taking longer in the long run because they have to rework it, or the contractor has to pull a part out because the design got changed later on, and all that ends up-- there is a lot of back and forth, and it ends up taking a lot longer and costing longer. As a Nation, as a country that needs to project in the Arctic, I think we can't afford to have those kind of delays, so we are asking the Coast Guard to be committed, and they have shown indications of that, to do it right the first time around. Mr. Van Drew. OK. Thank you. The Chairman had made note of how much the Coast Guard is doing all over the world and with limited resources and how amazing it is. I would just remind him that their initial training is in Cape May, New Jersey, so that might explain part of it. Mr. Correa. Are you arguing for more training or less? Mr. Van Drew. I am arguing for anything I can get down there. Mr. Correa. Good answer. I want to thank our Members of the committee, our witnesses for their valuable testimony. Members of the committee may have additional questions for the witnesses, and I would ask that you respond expeditiously in writing to those questions when they do present them. Without objection, the committee record will be kept open for 10 days. Seeing no further business for this committee, this committee stands adjourned. Thank you very much. [Whereupon, at 11:13 a.m., the subcommittee was adjourned.]