The Arctic Scramble

Figure 1. Arctic supply lines.

Source: B&C Alexander

Six nations border the Arctic Circle – Canada, Denmark, Greenland, Norway, Russia, and the USA – and they all are struggling to lay claim to every meter of that cold, harsh place. Why?

 

For marine-based tourism? Barely. In 2004, 1.2 million cruise ships traveled the Arctic. Three years later, this figure more than doubled.

For valuable fisheries? Maybe. Cod, herring, and pollock fisheries will also migrate northwards as seas warm.

For navigation? Hmm. Due to melting sea-ice in recent years, the Northwest Passage has opened up, connecting the Atlantic and Pacific Oceans. Tankers and icebreakers also travel along the Northern Sea Route, connecting Europe/West Russia and East Russia/Asia (NatGeo). 

Figure 2. The routes.

Source: National Geographic

For oil and gas? YES. The Arctic is believed to hold 13% of the world’s undiscovered oil and 30% of its undiscovered gas. That’s why every meter matters (Quirin, 2012).

Let’s take a look at how the Arctic Circle is divided up. In 2008, Durham University’s International Boundaries Research Unit released the region’s first detailed map, in order to highlight potential ‘hotspots’ for border disputes. A year earlier, Russian scientists planted a flag on the North Pole seabed, and not everyone was happy.

Figure 3. Marine borders. For more information on the key, please read on here.

Source: Durham University

Essentially, coastal states have unchallenged rights of resources up to 200 nautical miles offshore, called their Exclusive Economic Zone (EEZ). Some countries with landmasses extending into the sea may claim an area up to 350 nautical miles offshore. From this basis alone, there is overlap between USA and Canada, Norway and Russia. The map represents each country’s maximum claim, leaving the Arctic with two ‘patches’ of ocean left unconquered (BBC News).

Got land? Planting a flag is merely the beginning. Extracting oil and gas from these offshore zones involves high costs and high risks. The harsh climate will negatively affect staff and equipment. The projects will need entirely new ‘greenfield’ development due to little or no existing infrastructure. Spill containment and recovery are also harder to manage compared to conventional zones. 

So what are the countries’ current plans and future prospects?

Russia lay claim to forty-three out of sixty-one large Arctic oil/gas fields. They have begun to drill for hydrocarbons on continental shelves and are submitting an application to extend their borders to include an additional 1.2 million square km. Only two of their companies have license to operate: Gazprom and Rosneft, and with North America’s shale boom, they have to rethink their LNG project.

Canada began its exploration in 1972. The absence of infrastructure caused Arctic activity to cease in the 1990s, only to be rekindled this year by Chevron and Statoil in Beaufort Sea.

Norway also started its North Sea oil production thirty years ago. Its border dispute with Russia is pending parliamentary approval, so in the upcoming year, more of Barents Sea will be available for exploitation (optimistically).

The USA’s Alaskan Arctic region holds the largest oil deposits. This summer, Royal Dutch Shell began its operation, and oil is expected to be extracted from the Beaufort Sea by 2020 (Ernst & Young).

The Arctic Circle is fragile, and its ecology, environment, and indigenous people need protection (NatGeo). At the very least, a research program, including spill management and oil recovery techniques, now incorporate the nine major oil companies working in the Arctic. Neither Gazprom nor Rosneft is involved (BBC News).  

References: 

Schiermeier, Quirin. "The great Arctic oil race begins. "Nature. 31 Jan 2012.

"Arctic oil and gas." Ernst & Young.

 

"Aspen Commission: Amid Climate Change, Arctic Cooperation Urgently Needed." National Geographic. 16 Mar. 2011.

"Arctic Map shows dispute hotspots." BBC News. 5 Aug 2008.