Arctic's strange bedfellows

As global warming exposes new territory on top of the world, a new land-grab is on for potential energy reserves previously trapped under Arctic ice.

When a Russian mini-submarine dropped a titanium metal flag under 4,200 metres of water at the North Pole in early August, it sparked off a scramble to lay claim to unknown oil and gas reserves that have only now become accessible.

"This has to be seen in context of Russia trying to reestablish itself as a global power based on resources," said Holly Pattenden, a senior oil and gas analyst at Business Monitor International in London.

"Russia is having problems meeting domestic demand and they have loads of export requirements. Therefore, they are trying to stake a claim to more and more territory," she added.

All five nations with territory north of the Arctic Circle — Canada, Denmark, Norway, Russia and the United States — are looking to expand their existing 320-kilometre economic zones.

Easier access

The United States and Canada are scrambling to reassert their claims in the region, which could contain 14 to 25 per cent of the world's undiscovered oil and gas reserves.

"There are three things operating here — one of course is that all indications are that the ice is retreating. Therefore access is becoming easier. The second thing is the oil and gas industry is making huge technological leaps in their exploration technology. Third is that sustained prices for commodities justify very expensive projects," said Don Gautier, a research geologist with the United States Geological Survey.

About a week after the Russian expedition, the Canadian government announced it would spend close to $94 million on a new port, purchase six new patrol ships and refurbish an Arctic military training facility.

And by mid-August, a US Coast Guard cutter was headed to the Arctic to map the sea floor on the northern Chukchi Cap, an underwater plateau that extends from Alaska's North Slope.

Russia, meanwhile, has hopes that the two submarines it sent beneath the Arctic ice will lay the groundwork for claiming that the Lomonosov Ridge is an extension of the Eurasian continent.

Only nations that have ratified the treaty are eligible to submit claims for expansion, and that too only ten years after the date they signed. Norway signed in 1996, followed by Russia a year later, Canada in 2003 and Denmark in 2004. The lone exception is the United States, which first stalled under the Reagan administration in 1982 over concerns that the law would damage US business interests.

"Reagan comes in and is convinced it is a Third-World communist plot," said Rob Huebert, associate director of the Centre for Military and Strategic Studies in Calgary, who said the offending section of the treaty was then reworked over the American concerns.

"By the time the new part of treaty was written [in 1994], Clinton is in the thick of Whitewater and Lewinsky and doesn't have the political power to get it through the Republican-dominated Senate."

The problem now, Huebert added, is figuring out how the treaty applies to the US, even though the nation hasn't signed it.

"No one has an answer," he said. "Everyone has opinion, but no answers."
The five nations eyeing the thawing Arctic are all looking for the same resources — untapped reserves of oil and gas.

While there has been frequent talk of a new cold war forming, analysts say it is more a case of mutual dependence than military detente.
"This is not like escalation in the 1970s and 1980s. Russia needs infrastructure improvements and Western investment to discover new reserves," Pattenden said.

It is also unclear if old Cold War allegiances will be reformed in the struggle to secure reserves, since Europe is now dependent on Russia for 25 per cent of its energy needs.

Already the European Union is frantically searching for alternate supplies of oil and gas after Russia's disputes with former Soviet states impacted European supplies.

A tax spat with Belarus cut off the flow of oil to parts of Europe for three days earlier this year and a price dispute with the Ukraine cut off natural gas in early 2006.

But with North Sea reserves dwindling, Europe may have few other options, Huebert said.

New friendships

The trend at the moment, according to Pattenden, is more about getting friendly with other potential suppliers in both Africa and Central Asian states like Kazakhstan, Turkmenistan and Azerbijan.

But old Cold War friendships may not carry much weight in the new Arctic race.

"The US has been making feelers with Canada and Denmark to work together,'' Huebert said. "There is no doubt in my mind there has been an attempt to reestablish West versus East. I'm not sure Canada and Denmark have bought into that."

Unknown reserves

The one thing that everyone seems to know is that no one knows for sure what lies under the Arctic.

Estimates of oil and gas reserves are just that, said Pattenden — estimates.

The potential of the entire Arctic is very uncertain, added Donald Gautier, who is also the principal investigator for the United States Geological Circum-Arctic Research Appraisal. The study is the US's first attempt to get an accurate picture of resources located within the Arctic Circle.

Until the results of that study are delivered in mid-2008, Gautier's best rough estimate is that the Arctic contains about 14 per cent of undiscovered reserves or 235 to 240 billion barrels of oil equivalent — a standard of measurement that accounts for both oil and gas reserves.

Gautier said that he only reached that estimate by cobbling together studies of six geographical areas that encompass parts of the Arctic.

Other estimates of the reserves have ranged as high as 25 per cent of undiscovered reserves, a number Gautier suspects came from the same studies. All of the projections, he said, are highly questionable.

"Most of undiscovered resources are going to be on the continental shelves in territorial waters that are already claimed," Gautier said. "You're not going to find a new Middle East where the Russians dropped their flag."