Article: Who owns the Arctic?

The Golden Circle
Published in The Sunday Business Post on February 13th, 2011, by Alex Meehan

In 2007,Russian politician and polar Explorer Artur Chilingarov planted a Titanium flag on the ocean bed below the North Pole, in an attempt to claim the Arctic for his native land. When he flew back to Moscow, Chilingarov was hailed as a hero, and was welcomed by supporters waving Russian flags and brandishing bottles of champagne.

“The Arctic always was Russian, and it will remain Russian,” he said. ‘‘We are happy that we placed a Russian flag on the ocean bed, where not a single person has ever been, and I don’t give a damn what some foreign individuals think about that.”

At the time, the act was widely dismissed as a stunt designed to boost Chilingarov’s profile in the run-up to Russian elections, and was dismissed by politicians such as Canadian foreign minister Peter Mackay, who told reporters: ‘‘This isn’t the 15th century. You can’t go around the world and just plant flags and say, ‘We’re claiming this territory’.”

Four years on, Chilingarov’s actions look less like a PR gambit and more like the beginning of what is likely to be a race to clearly define just who owns the Arctic and – crucially – the natural resources to be found there. If estimates are to be believed, there are vast quantities of oil and gas in the far north.

And while in the past this oil and Gas was inaccessible, climate change is now opening up areas of the Arctic for drilling during the summer months, potentially providing a lucrative source of energy for whoever can access it.

‘‘The sea ice is melting at an alarming rate, to the point where the Northwest Passage and the northern sea route are both now open in late summer,” says Michael Byers, professor and holder of the Canada Research Chair in global politics and international Law at the University of British Columbia in Vancouver.

‘‘That is a dramatic change in terms of the access that is now available in the Arctic for shipping, and also for oil companies looking for oil and gas.

The access has improved enormously as a consequence of the Arctic being on the front line of climate change. With that access, coupled with the fact that humanity is running out of easy sources of oil and gas, there is a major push to explore for and develop Arctic energy.”

In his book, Who Owns The Arctic, Byers examined some of the geopolitical difficulties likely to emerge as a result of these developments. Take the Northwest Passage, for example.

For most of recorded history, this waterway to the north of Canada was thought to be a myth, and when it was finally discovered in the early 20th century, it was found to be impassable due to ice.

However, in recent years, climate change has contributed to it melting to the point where it is increasingly passable in the summer months. As this route becomes more navigable, freight companies are eyeing up the potential to shave 7,000 kilometres off the trip from the Pacific to the Atlantic oceans, avoiding the need to go through the Suez and Panama canals.

All well and good, but Canada claims that this is an internal waterway, while many other countries, including the US, contend that it’s an international strait.

Meanwhile, the petrochemical industry – which is unable to get to most of the world’s unharvested oil and gas because it’s located in territories controlled by nationalist governments – is casting its eye north.

‘‘The international oil companies – Shell, Chevron, BP, Exxon Mobile – are being driven to the Arctic, among other places, to try to scrape the last drops of oil out of the barrel. But it’s not just because of climate change,” says Charlie Kronick, senior climate advisor with Greenpeace UK.

‘‘The reality is that the days of oil being easy to get to for these companies is long gone – what’s there is basically under the control of national oil companies in areas like Venezuela, Russia and the Middle East.

It’s very difficult for these international companies to get into those regions, where the bulk of what’s called conventional oil is still located.

As a result, they are being driven to places where it’s either expensive or environmentally difficult, or both, to find oil. The Arctic is the perfect example of one of these places.”

Opinions differ on just how much oil and gas is to be found in the Arctic, depending on the methodologies used to arrive at the numbers, but there is widespread consensus that the quantities involved are huge.

‘‘The most systematic estimate is from the United States Geological Survey, which is updated all the time, and it says that there are between 90 and 150 billion barrels of oil and a large quantity of gas in the Arctic,” says Manouchehr Takin, a senior petroleum upstream analyst with the Centre for Global Energy Studies.

‘‘That’s based on the geology, nearby exploratory wells that have been drilled, seismic activity and so on.

The Russians have done the same kinds of surveys, but their estimates are larger – they talk about something like 300 to 500 billion barrels of oil yet to be discovered in the area.

‘‘Either way, we’re talking about a few hundred billion barrels of oil and large quantities of gas. To put that into perspective, the reserves of Kuwait are 90 billion barrels, and Iraq has around 135 billion barrels.

These are huge quantities and the potential Is massive, so of course oil companies are going to be interested in looking for it.”

The issue o ownership and sovereignty in the Arctic is at once complex and simple. As the entire region comprises frozen ocean, rather than land, it’s governed by the 1982 UN Convention on the law of the sea.

This convention gives ownership of any natural resources present on or under the sea bed within 200 nautical miles of a country’s shores to that country.

In addition, countries on the edge of a continent can extend their claims by up to 350 nautical miles from shore to areas that they can show are extensions of the continental shelf.

‘‘That document has been ratified by four of the five Arctic Ocean countries and is accepted as customary law by the fifth – the US. It assigns without any controversy 99 per cent of the hydrocarbon-bearing areas – the areas that are commonly believed to be rich in oil and gas,” says Byers.

‘‘When people say they’d like to see a comprehensive Arctic treaty created and modelled on the Antarctic treaty, they overlook the point that the Arctic is essentially an ocean and we already have a comprehensive treaty for dealing with ownership of oceans.

The Arctic is frozen sea; increasingly less frozen than it once was, but sea nonetheless,” says Byers.

‘‘The real issue is over the continental shelves. Because they were once forests and dinosaurs, this is where the hydrocarbons are located. So the disputes that have arisen lately are about the fine detail of ownership – nobody can actually claim territory they’re not entitled to.”

One area that’s not so cut and dried is the Lomonosov Ridge, an underwater ridge that crosses the Arctic Ocean between the New Siberian Islands and Ellesmere Island.

Russia is currently collecting data to support its claim that this underwater area is an extension of the Asian continental shelf, while Canada and Denmark claim it is an extension of the North American continental shelf.

The country that manages to prove its claims conclusively, in front of the UN’s Commission on the Limits of the Continental Shelf, will gain control of a vast amount of seafloor resources in the central portion of the Arctic Ocean.

‘‘The result is that the push is now on to collect science which can be plugged into this legal formula to produce a result showing where the respective jurisdictions lie.

That’s the hidden good news story here – very wise diplomats foresaw issues like this and concluded a multilateral treaty back in 1982,” says Byers.

‘‘The multinational oil companies don’t want anyone grabbing territory, they want stability.

They’re mostly agnostic in terms of which country’s territory they actually drill in.

They have no allegiance to any particular nation-state, but they do want legal certainty and they’re the ones who have been pushing for dispute resolution, because they won’t drill in a disputed zone.”

For many observers of the Arctic situation, it’s not a matter of how oil and gas can be extracted, but whether it should be drilled for at all.

Kronick points out that the Arctic is one of the last remaining pristine environments on the planet, and the impact of an oil spill or leak in there would be even more catastrophic than elsewhere.

‘‘This is true for a number of reasons.

One is that it’s an important breeding ground for whales, halibut and cod, so the impact locally would be massive.

However, even though the ice is less pervasive than it was ten or 20 years ago, the window of operations in the Arctic is still only between three to five months in the summer.

For the rest of the year, because of sea ice and icebergs, it’s impossible to work or drill there,” he says.

‘‘This means that if an oil company experienced a leak at the end of a drilling period, that leak could be gushing oil into the sea under the ice for anywhere between seven and nine months. It would be an immeasurable catastrophe, not just in environmental terms but also in economic terms for those companies, because they could never afford to clean it up.”

Greenpeace argues that the environmental consequences of a spill in the Arctic would be far more serious than in warmer seas such as the Gulf of Mexico.

The organisation points out that the impact of the Exxon Valdez spill in Alaska is still being felt over 20 years later.

But according to Kronick, even people who aren’t concerned about the environment should care about this issue. ‘‘If you couldn’t care less about the Arctic, you should still be worried about the extra cost that drilling there or in other environmentally sensitive places will involve,” he says.

‘‘The problem with working in areas like The Arctic is that it inevitably drives the price of oil and gas up and, as we all know, when oil prices get to a certain level, they tend to tip consuming economies around the world into global recession.

If you invest in any of these big international oil companies – and people with a pension or insurance policy probably already do, because most of these policies are backed by funds invested in petrochemical portfolios – then you should know that this kind of exploration is very risky.”

According to Greenpeace, activity in the Arctic can only serve to keep a dying industry artificially alive, and the sooner global economies move away from fossil fuels, the better. ‘‘It might not happen for five, ten or even 20 years, but the move away from fossil fuels is going to happen.

The reality is that, the higher the price of existing oil and gas, the more likely it is that economies will say it’s no longer worth the trouble.

The move to other forms of power will leave these investments looking less attractive,” says Kronick.

‘‘You only have to look at what happened last year in the Gulf of Mexico to see the kicking that BP took there. But it’s not just BP – all the major companies are involved in these risky areas, and I think that increasingly the public is alert to the risks they are running, and are aware of what the implications are for them.

The oil age may be coming to an end, but there are plenty of interests competing for the last scraps.”

It’s certainly true that the major oil companies are painfully aware of the cost in environmental, financial and PR terms of spills and accidents. BP recently reported a loss of €3.5 billion for 2010 – its first annual loss in more than two decades – as a direct result of the Gulf of Mexico spill.

The company estimates that the final total cost of cleaning up the spill will be close to €30 billion.

‘‘The environmental story is really a story that has followed the oil companies throughout their history,” says Manouchehr Takin. ‘‘In the late 19th and early 20th century, the oil companies were largely ignorant of the damage they caused, but in the last 50 years, thanks to environmental activists like Greenpeace and others, public opinion has changed and has put a lot of pressure on these companies.

‘‘The Gulf of Mexico was obviously an accident, but no matter how careful the companies are, accidents occur. It’s like flying – we may have a tragic airline accident from time to time, but do we stop flying altogether?

No, we don’t. ‘‘The enquiry that was held after the Piper Alpha accident in the North Sea in 1988 made many recommendations that resulted in significant improvements in safety and regulation. But activity in the North Sea continued after that disaster, both from the British and Norwegian sides.

That will be the same in the Gulf of Mexico, and it will be the same in the Arctic.”

History of the Arctic

The Arctic Circle’s infamous Northwest Passage confounded explorers for hundreds of years until Norwegian explorer Roald Amundsen successfully navigated it in 1903.

Once thought a myth, the route offered a potentially invaluable way to shorten the sea voyage from Europe to the Far East and many ill fated expeditions were launched throughout the 18th and 19th centuries to find the route.

When Amundsen eventually proved it was real, he claimed a place in the history books, but at the time he made it through, the passage was commercially useless for shipping purposes – it was mostly frozen and where navigable it was too shallow for shipping.

However since then, the effects of climate change have resulted in the passage opening up during the summer months and in recent years it’s become increasingly usable.

Much of the history of arctic exploration is also the history of scientific discovery and of the urge for mankind to push back the boundaries of its knowledge of the natural world. However many of the expeditions that set out to chart the arctic and locate the North Pole were doomed from the outset.

One of the most famous yet ill fated expeditions to attempt the Northwest Passage was that of Sir John Franklin in 1845. He departed England with two Royal Navy vessels and a crew of 128 but was never seen again, despite over 40 expeditions subsequently launched to attempt to locate him.

It wasn’t until 1857 that evidence emerged to show his ship had become stuck in the ice near King William Island for two years. The crew seem to have abandoned it and attempted to walk to safety but none survived.

As for the North Pole itself, few areas of exploration have been as hotly contested as the claim to have been the first to the pole. American Robert Peary claimed to have been the first to reach it on April 6th, 1909, but his claim is now widely discredited.

Equipped with dogsleds and three separate support crews, he made record time travelling 250 kilometres in the last five days of his trip but he did so without witnesses. Modern explorers, including Olympic skiers using modern equipment, have been unable to equal this feat and in 1988 the New York Times published a correction of its initial report on Peary’s expedition, discrediting him some 79 years later.

Roald Amundsen notched up another Arctic first when he became the first person, along with his American sponsor Lincoln Ellsworth, to sight the North Pole from an airship in 1926, but the first people to have reached the north pole without any doubt were the crew of a soviet aircraft under the command of Alexander Kuznetsov who landed near the pole and walked up to it in 1948.

Since then, the North Pole has continued to exert an attraction to explorers and record seekers, with further expeditions taking place regularly after 1948. Explorers got there by a variety of means — in 1958, a US submarine sailed to the north pole under the icepack, while in 1959 a second submarine actually surfaced there through the ice.

In 1968, American Ralph Plaisted became the first person to reach the North Pole overland via snowmobile, while in 1969 UK explorer Wally Herbert became the first man to get there on foot and by dogsled.

The last significant North Pole record to have been clinched happened in 1995, when a pair of explorers from Canada and Russia, Richard Weber and Misha Malakhov became the first people to get there and back on foot and with no outside help in the form of dog teams, aircraft or resupplies. No one has equalled this feat since.

Arctic facts and climate change

Unlike the Antartic, which is a landmass surrounded by sea, the Arctic is not actually solid land, it’s a sea surrounded by landmasses, albeit a sea which is mostly frozen.

The smallest of the world’s five great oceans, the Arctic is around 14 million square kilometres in size, or approximately one and a half times the size of the United States. The bulk of the surface is covered by a perennially drifting polar icepack which averages around three metres thick which floats free in the summer but more than doubles in size and extends to meet the surrounding landmasses in winter.

Bordered by eight countries – Canada, Russia, Greenland, the US, Norway, Sweden, Finland and Iceland — the Arctic is particularly vulnerable to the effects of global warming, with the result that significant parts of the arctic ice pack have already melted. Climate models predict that Arctic shrinkage could contribute to a substantial rise in sea levels worldwide.

As to when this might happen, current estimates predict the total disappearance of Arctic sea ice in the summer at anywhere from 2040 to 2100, with one notable 2007 survey concluding that summer ice loss could occur as early as 2029.

Already the early signs of this are effecting local wildlife, with a recent study linking decreases in polar bear litter sizes with reductions in the amount of sea ice in the arctic. Polar bears move from ice flow to ice flow, feeding on seals during the eight coldest months of the year, and fast on land during the four warmer months. With less ice available to them, there’s less time for them to eat and store food.

The study, published in the biology journal Nature Communications, predicted this trend will continue over the next few decades, potentially threatening the survival of the species in parts of the Arctic.

“The climate has changed before but always on a geological timescale. But now the Arctic is changing on human time – over the space of a human lifetime,” says Michael Byers of the University of British Columbia in Vancouver.

“I’ve seen it myself. I’ve been to a national park in Canada, on Balfin island, in each of the last four summers and in that time I’ve seen virtually an entire glacier disappear. This is a piece of ice that’s existed for thousands of years and has literally melted away in just four. It’s staggering.”

“There is an additional factor at work here and that has to be the human hand. There’s no debate here and I regularly tell people that every arctic issue is connected to climate change. It is one thing to learn from temperature gauges and remote sensing satellites that climate change is accelerating beyond all scientific expectations, and another thing to see the change unfold before your eyes,” says Byers.

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