Tag Archives: Arctic resource exploitation

Who Owns the Riches of the Melting North Pole

A competition for the North Pole heated up in May 2019, as Canada became the third country to claim—based on extensive scientific data—that it should have sovereignty over a large swath of the Arctic Ocean, including the pole. Canada’s bid, submitted to the United Nations’s Commission on the Limits of the Continental Shelf (CLCS), joins competing claims from Russia and Denmark. Like theirs, it is motivated by the prospect of mineral riches: the large oil reserves believed to lie under the Arctic Ocean, which will become more accessible as the polar ice retreats. And all three claims, along with dozens of similar claims in other oceans, rest on extensive seafloor mapping, which has proved to be a boon to science…

Coastal nations have sovereign rights over an exclusive economic zone (EEZ), extending by definition 200 nautical miles (370 kilometers) out from their coastline. But the 1982 United Nations Convention on the Law of the Sea opened up the possibility of expanding that zone if a country can convince CLCS that its continental shelf extends beyond the EEZ’s limits…..Most of the 84 submissions so far were driven by the prospect of oil and gas, although advances in deep-sea mining technology have added new reasons to apply. Brazil, for example, filed an application in December 2018 that included the Rio Grande Rise, a deep-ocean mountain range 1500 kilometers southeast of Rio De Janeiro that’s covered in cobalt-rich ferromanganese crusts.

The Rio Grande Rise, Brazil

To make a claim, a country has to submit detailed data on the shape of the sea floor and on its sediment, which is thicker on the shelf than in the deep ocean. …CLCS, composed of 21 scientists in fields such as geology and hydrography who are elected by member states, has accepted 24 of the 28 claims it has finished evaluating, some partially or with caveats; in several cases, it has asked for follow-up submissions with more data. Australia was the first country to succeed, adding 2.5 million square kilometers to its territory in 2008. New Zealand gained undersea territory six times larger than its terrestrial area. But CLCS only judges the merit of each individual scientific claim; it has no authority to decide boundaries when claims overlap. To do that, countries have to turn to diplomatic channels once the science is settled.

The three claims on the North Pole revolve around the Lomonosov Ridge, an underwater mountain system that runs from Ellesmere Island in Canada’s Qikiqtaaluk region to the New Siberian Islands of Russia, passing the North Pole. Both countries claim the ridge is geologically connected to their continent, whereas Denmark says it is also tied to Greenland, a Danish territory. As the ridge is thought to be continental crust, the territorial extensions could be extensive)

Lomonosov Ridge, Amerasian Basin

Tensions flared when Russia planted a titanium flag on the sea floor beneath the North Pole in 2007, after CLCS rejected its first claim, saying more data were needed. The Canadian foreign minister at the time likened the move to the land grabs of early European colonizers. Not that the North Pole has any material value: “The oil potential there is zip,” says geologist Henry Dick of the Woods Hole Oceanographic Institution in Massachusetts. “The real fight is over the Amerasian Basin” where large amounts of oil are thought to be locked up…

There’s also a proposal to make the North Pole international, like Antarctica (South Pole), as a sign of peace, says Oran Young, a political scientist at the University of California, Santa Barbara. “It seems a very sensible idea.”

Richard Kemeny, Fight for the Arctic Ocean is a boon for science, June 21, 2019

Fish, Gas and Minerals: the Arctic

Mr Xi has been showing a growing interest in Arctic countries. In 2014 he revealed in a speech that China itself wanted to become a “polar great power”..,,In January 2018 the Chinese government published its first policy document outlining its Arctic strategy.

China is also keen to tap into the Arctic resources that will become easier to exploit as the ice cap retreats. They include fish, minerals, oil and gas. The region could hold a quarter of the world’s as-yet-undiscovered hydrocarbons, according to the United States Geological Survey. Chinese firms are interested in mining zinc, uranium and rare earths in Greenland.

As the ice melts, it may become more feasible for cargo ships to sail through Arctic waters. China is excited by this possibility (its media speak of an “ice silk road”). In the coming decades such routes could cut several thousand kilometres off journeys between Shanghai and Europe. Sending ships through the Arctic could also help to revive port cities in China’s north-eastern rustbelt… China is thinking of building ports and other infrastructure in the Arctic to facilitate shipping. State-linked firms in China talk of building an Arctic railway across Finland.

Chinese analysts believe that using Arctic routes would help China strategically, too. It could reduce the need to ship goods through the Malacca Strait, a choke-point connecting the Pacific and Indian oceans. Much of China’s global shipping passes through the strait. It worries endlessly about the strait’s vulnerability to blockade—for example, should war break out with America.

There are no heated territorial disputes in the Arctic, but there are sensitivities, including Canada’s claim to the North-West Passage, a trans-Arctic waterway that America regards as international—ie, belonging to no single state.

Plenty of non-Arctic countries, including European ones, have similar dreams. But China is “by far the outlier” in terms of the amount of money it has pledged or already poured into the region, says Marc Lanteigne of Massey University in New Zealand. Its biggest investments have been in Russia, including a gas plant that began operating in Siberia in December 2017. Russia was once deeply cynical about China’s intentions. But since the crisis in Ukraine it has had to look east for investment in its Arctic regions.

The interest shown by Chinese firms could be good news for many Arctic communities. Few other investors have shown themselves willing to stomach the high costs and slow pay-offs involved in developing the far north…. The main concern of Arctic countries is that China’s ambitions will result in a gradual rewiring of the region’s politics in ways that give China more influence in determining how the Arctic is managed. Greenland is a place to watch. Political elites there favour independence from Denmark but resist taking the plunge because the island’s economy is so dependent on Danish support. The prospect of Chinese investment could change that. Should Greenland become independent, China could use its clout there to help further its own interests at meetings of Arctic states, in the same way that it uses its influence over Cambodia and Laos to prevent the Association of South-East Asian Nations from criticising Chinese behaviour in their neighbourhood.

Excerpts from The Arctic: A Silk Road through Ice, Economist, Apr. 14, 2018, at 37

The Arctic through China’s Eyes

China on  January 25, 2018 outlined its ambitions to extend President Xi Jinping’s signature Belt and Road Initiative to the Arctic by developing shipping lanes opened up by global warming.  Releasing its first official Arctic policy white paper, China said it would encourage enterprises to build infrastructure and conduct commercial trial voyages, paving the way for Arctic shipping routes that would form a “Polar Silk Road”…China, despite being a non-Arctic state, is increasingly active in the polar region and became an observer member of the Arctic Council in 2013.

Among its increasing interests in the region is its major stake in Russia’s Yamal liquefied natural gas project which is expected to supply China with four million tonnes of LNG a year.

Shipping through the Northern Sea Route would shave almost 20 days off the regular time using the traditional route through the Suez Canal. COSCO Shipping has also previously sailed vessels through the Arctic’s northeast passage.

China’s increasing prominence in the region has prompted concerns from Arctic states over its long-term strategic objectives, including possible military deployment…The white paper said China also eyes development of oil, gas, mineral resources and other non-fossil energies, fishing and tourism in the region. China’s Belt and Road initiative aims to connect China to Europe, the Middle East and beyond via massive infrastructure projects across dozens of countries…

Excerpts from China unveils vision for ‘Polar Silk Road’ across Arctic, Reuters, Jan. 25, 2018

Staying in Svalbard

Svalbard has an unusual status that makes it a flashpoint of an escalating face-off in the Arctic between Russia and the West.  Norway, a member of the North Atlantic Treaty Organization, and Russia subsidize unprofitable mines to keep a strategic footprint on an icy group of islands where Oslo and Moscow have been the main players since a 1920 treaty among multiple nations recognized Norwegian sovereignty but allowed other nations to develop some commercial interests. (pdf).

NATO has described its lack of maritime resources in the region as a weakness.  “Svalbard is part of Norway and therefore it’s part of NATO,” Secretary-General Jens Stoltenberg. “So, of course, all the NATO security guarantees apply to Svalbard. When it comes to the question of coal mining, that’s for the Norwegian authorities to decide.”…

Oslo is planning to buy new submarines and has increased the number of troops on its border with Russia.  But Norway, one of the world’s richest countries on a per capita basis, is debating whether to keep financing coal mining on Svalbard. A renewed commitment to mining would be controversial, not just for the cost but also because of Norwegians’ vision of themselves as champions of environmental causes…

“It’s a question of how much are we going to spend doing something irrational versus how great do we feel the need to counter Russian Arctic activity,” said Indra Overland, head of energy at the Norwegian Institute of International Affairs, a think tank that is partially funded by the state…

Some 800 miles from the North Pole, the islands are barren, with temperatures that dip to minus-20 degrees Celsius (minus-4 degrees Fahrenheit) in winter months when the sun doesn’t rise.  Miners on both sides are attracted by relatively high salaries. Barentsburg’s 400 inhabitants are also provided with health care, a school and low-cost housing.Russia, which started mining here in the 1930s, focused on Barentsburg and another settlement called Pyramiden. The towns housed swimming pools, 24-hour canteens and food products that were then largely unavailable elsewhere in the Soviet Union…

Russia’s government has ordered coal production to slow to stretch reserves out until 2032, and will then face a decision similar to Norway’s on whether to invest in a new mine…

Both countries are turning to tourism.  In Russia’s settlements, visitor numbers have doubled in the past four years, and income from tourism stood at $2.4 million last year, more than from mining. Arktikugol received $8 million in government subsidies in 2016….Norway has opened a university, and one closed coal mine has become a museum and film archive. Old miners’ cabins have been renovated for holiday accommodation and a warehouse is now a restaurant.

But Norwegian politicians and academics admit that without a coal mine, their country’s presence will diminish, in part because tourism is so seasonal.  “To put it bluntly, the purpose of the Norwegian settlements is to assert Norwegian sovereignty over Svalbard,” said Torbjørn Pedersen, a political scientist at Nord University in Bodø, Norway

Excerpts from A New Cold War Grip Arctic Enclave, Wall Street Journal, Oct. 11, 2017

Claim of Denmark on the Arctic

In 2007 a Russian-led polar expedition, descending through the icy waters of the Arctic Ocean in a Mir submarine, planted a titanium Russian tricolour on the sea bed 4km (2.5 miles) beneath the North Pole… Over the next few years the Arctic Council (a talking shop for governments with territories inside the Arctic Circle, and others who attend as observers) became much more influential and one of the few remaining border disputes there (between Norway and Russia) was settled.

Now Denmark has staked a claim to the North Pole, too. On December 15th it said that, under the UN Convention on the Law of the Sea (UNCLOS), some 900,000 square kilometres of the Arctic Ocean north of Greenland belongs to it (Greenland is a self-governing part of Denmark). The timing was happenstance. Claims under UNCLOS have to be made within ten years of ratification—and the convention became law in Denmark on December 16th 2004. But its claim conflicts with those of Russia, which has filed its own case under UNCLOS, and (almost certainly) Canada, which plans to assert sovereignty over part of the polar continental shelf (see map).

The prize for these countries is the mineral wealth of the Arctic, which global warming may make more accessible. Temperatures in the region are rising at twice the rate of the rest of the Earth. According to the United States Geological Survey, the area has an eighth of the world’s untapped oil and perhaps a quarter of its gas….

The melting of the summer sea ice has also opened up trade routes between Asia and Europe via the top of the world; 71 cargo ships plied the north-east passage last summer, up from 46 in 2012. And trade requires rules. Moreover, under UNCLOS, most of the known energy and mineral reserves are within countries’ 200-nautical mile economic zones anyway. So everyone has an interest in minimising conflicts and amicably settling those that crop up.

But… in the summer of 2014 it carried out extensive combat exercises in the Arctic for the first time since the end of the cold war. It is re-equipping old Soviet bases there and in July tested the first of its new-generation rockets, called the Angara, from a cosmodrome in the high north. Sweden spent part of the summer searching for a Russian submarine that it suspected of slipping into its territorial waters.

Denmark’s claim will test whether Russia is willing to stick to the rules in the Arctic. It is based on a provision of the law of the sea which says countries may control an area of seabed if they can show it is an extension of their continental shelf. (Denmark argues that the Lomonosov ridge, which bisects the Arctic, starts in Greenland.) All Arctic countries, Russia included, have promised to respect this law.

Excerpts, The Arctic: Frozen conflict, Economist, Dec. 20, 2014, at 89

China in the North Pole

China is interested in the Arctic. On July 11th, 2014 its icebreaker, Xue Long (“Snow Dragon”), embarked on the country’s sixth Arctic expedition, with 65 scientists on board. A new 1.3 billion yuan ($210m) icebreaker will soon be launched, and last December  [2013] a China-Nordic research centre was opened in Shanghai.

New freight opportunities interest China along the Northern Sea Route (NSR) as ice recedes. In 2010 four ships took the route. Last summer 71 vessels did so. Each ship that takes the route must, at certain points, be accompanied by an ice-breaker, so it is unclear how soon the NSR will be suitable for mass transit, if at all.

Some climate models predict the Arctic Ocean could be ice-free in summer by the middle of this century. The route cuts the distance between Rotterdam and Shanghai by 22% and Yang Huigen of the Polar Research Institute of China has predicted that 5-15% of China’s international trade will use the NSR by 2020. But Linda Jakobson, of the US Studies Centre at the University of Sydney, says that is a “rather optimistic assessment” and that talk of the NSR as a new Suez Canal is overblown. Weather conditions and environmental sensitivities will make the route a difficult one.

As for energy, China is one of the biggest investors in mining in Greenland. A deal with Rosneft, a state-controlled Russian company, will explore offshore Arctic fields for oil. But the undersea resources in the Arctic are largely within the Exclusive Economic Zones of the littoral states (notably Russia), so if China wants to look for energy it will have to do so jointly…

But the new Chinese presence is not without concerns. Huang Nubo, a tycoon, recently bought 100 hectares (250 acres) of land in northern Norway and has bid for a plot on the island of Svalbard, where China has a research station. He aims to develop a resort for Chinese tourists. Mr Huang had similar plans in Iceland in 2011, but local protests quashed them. A Norwegian newspaper has called him a “suspected imperialist”.

China and the Arctic: Polar bearings, Economist, July 12, 2014, at 39