Arctic hotspots

By bne IntelliNews August 11, 2008

Nicholas Watson in Prague -

When Russia planted a flag on the ocean floor beneath the North Pole, it highlighted the increasingly thorny problem of competing claims over the Arctic region's oil and gas deposits. And now researchers have drawn up the first detailed map of areas in the Arctic that could be subject to border disputes.

On August 5, experts from the International Boundaries Research Unit (IBRU) at Durham University in the UK released a map that shows the current boundaries in the Arctic and possible future claims by Canada, Russia, Denmark (Greenland), Norway and the US (Alaska). "There has been a lot written about this coming conflict, but it is largely based on rather poor geographic information," says Martin Pratt, director of research at the IBRU. "We wanted to give a clear visual guide to what the situation really is."

That situation has no country actually owning the North Pole or the surrounding ocean, because the Arctic states are limited to a 200-nautical-mile economic zone around their coasts. But upon ratification of the United Nations Convention on the Law of the Sea, a country is given 10 years to make claims to extend that 200-mile zone. Norway (ratified the convention in 1996), Russia (ratified in 1997), Canada (ratified in 2003) and Denmark (ratified in 2004) have all launched claims on certain Arctic sectors that they believe should belong to their territories. Both Russia and Denmark assert claims over the North Pole itself, though the IBRU doesn't rule out the possibility of Canada making a claim to the North Pole as well. A UN panel is supposed to decide on Arctic control by 2020.

Russia's latest research centres on the Lomonosov ridge beneath the Arctic Ocean, which Moscow argues is an extension of the Siberian continental shelf. The claim is disputed by Canada and Denmark, which believe the ridge is connected to their territory. Russia also has competing claims with Norway over parts of the Arctic Ocean.

Other contentious areas highlighted on the map include a 6,250-square-km section of the Beaufort Sea that both Canada and the US consider theirs. The disputed Northwest Passage, which connects the Atlantic and Pacific oceans, is shown on the map as part of Canada's internal waters rather than as the international strait that the US and other countries argue it is.


That Northwest Passage is illustrative of why the battle over the Arctic claims is hotting up. Global warming is opening up remote areas like the Arctic to more oil and gas exploration as the ice retreats; the European Space Agency stated that, based on satellite images, ice loss last year had opened up the Passage "for the first time since [satellite] records began in 1978." The economics of producing oil and gas is also being helped by the record high oil prices and a diminishing number of areas left to explore, especially for the international oil majors, which are being either pushed out or simply excluded from many areas by national oil companies.

And, if a recent survey by the US Geological Survey (USGS) is accurate, there would appear to be a lot more oil and gas in the Arctic than previously thought.

On July 23, the USGS said the area north of the Arctic Circle has an estimated 90bn barrels of undiscovered, technically recoverable oil, 1,670 trillion cubic feet of technically recoverable natural gas, and 44bn barrels of technically recoverable gas liquids. All told, the area accounts for about a fifth of the world's recoverable oil and gas reserves: 13% of the oil, 30% of gas and 20% of gas liquids. To put that in perspective, at today's consumption rate of 86m barrels a day, the Arctic could meet global demand for three years.

About 84% of the undiscovered oil and gas is offshore, the USGS estimates, but much of it is close enough to land to fall under national territorial claims. About a third of the oil found in the survey is off the coast of Alaska. The majority of the gas is concentrated in two Russian provinces.

The flag-planting stunt by Russia and sometimes hysterical media coverage notwithstanding, the idea that most of the reserves fall under already agreed territorial borders raises hopes skirmishes can be avoided. Indeed, on May 29, Denmark, Norway, Russia, Canada and the US met in Ilulissat, Greenland to discuss the competing claims in the Arctic. Russian Foreign Minister Sergei Lavrov told the Arctic Ocean Conference that he did not foresee any conflicts. "We do not share any alarming forecasts of an expected confrontation between the interests of the Arctic states and the nations beyond the region, a future 'battle for the Arctic Ocean' due to conditions of the warming climate facilitating access to the natural resources that are getting more expensive and to transportation routes. These forecasts are farfetched and subject to the political situation," Interfax quoted Lavrov as saying.

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Arctic hotspots

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