As the Arctic ice retreats, the region’s commercial potential is heating up – leading to an increase in international tensions, says Simon Wilson.
Who owns the Arctic?
No nation claims exclusive territorial rights over the polar region itself, and unlike the Antarctic landmass spread around the south pole, there is no formal international treaty regulating commercial activities in the Arctic Ocean. But that is set to change because global warming means the Arctic Ocean’s icy layer is rapidly thinning.
According to David Barber of the Centre for Earth Observation Science at the University of Manitoba, the pace of the thaw is so great that the Arctic is likely to be ice-free in the summer months within three or four decades – the first time this has happened for a million years.
What does this mean for business?
There are two implications. First, it means there’s a realistic prospect of a navigable Northwest Passage in the near future, allowing oil tankers, freighters and other vessels to ply their trade in an unfrozen ocean.
This has always been the elusive dream – that of a short-cut from Europe to Asia across the top of North America – that provided the original impetus for European exploration of Canada’s Arctic waters more than 400 years ago. The names of some of the the British sailors who have failed in that quest over the centuries – Frobisher, Hudson, Davis, Baffin – are still prominently commemorated on the region’s maps.
And the second implication?
The prospect of oil and gas riches. As the ice retreats and access improves, it may become cost effective to exploit more of the region’s huge natural resources. According to the US Geological Survey, a quarter of the world’s undiscovered reserves of oil and natural gas lie under the Arctic Ocean, and the pace of exploration is being stepped up.
Gazprom’s Shtokman field, 300 miles off the Russian Arctic coast in the Barents Sea, is already the largest offshore gas reservoir in the world. Norway’s Statoil is developing a gasfield 90 miles from its most northerly outpost, Hammerfest, also in the Barents Sea.
And BP Amoco is developing an Alaskan offshore oilfield called Northstar. The new interest in the Arctic is already turning up the diplomatic heat in a region where seemingly minor territorial disputes could now have big commercial implications.
Who claims what?
Under international law, all nations may lay claim to the seabed up to 350 miles off their coasts. But this distance, crucially, is measured from the edge of a nation’s continental shelf.
Existing oceanographic surveys show that no country’s shelf gives it a claim on the north pole itself. However, Denmark has been trying for two years to convince the other polar nations – Russia, Canada, the United States, Norway, Sweden, Finland and Iceland – that Greenland (a self-governing territory under the Danish crown) is connected to a 1,100-mile ridge that stretches towards the pole. Canada and Russia also disagree over the extent of their respective continental shelves.
What else is disputed?
The region has a number of cartographic loose ends that occasionally lead to diplomatic spats, such as that over rival Canadian and Danish claims to Hans island, a tiny barren rock high in the far northern Arctic. Far more serious is the rising tension between Canada and the United States.
First, the two nations disagree over the maritime boundary between Alaska and Canada’s Yukon Territory in an area of the Beaufort Sea covering 6,250 square nautical miles that is believed to be rich in natural resources. Second, and even more seriously for Canada’s territorial integrity, they disagree over the status of the Northwest Passage.
What is at stake over the Northwest Passage?
For Canada, this is a vital issue of national sovereignty. As far as the Ottawa government is concerned, the sea route through its Arctic archipelago is unquestionably part of its internal waters. The United States, however, claims the route is an international strait open to all – and is backed in its belief by the European Union.
Canada’s new PM Stephen Harper – the Conservative Party leader who came to power in February, 2006 – has been highly vocal in pledging his commitment to protecting Canada’s sovereignty in the Arctic. He is right to be concerned, since the US and other nations have repeatedly challenged Canadian sovereignty by sending ships and submarines through the Northwest Passage without the consent (and often without the knowledge) of Canada’s government.
In response, Ottawa is planning a new Arctic military training centre and enhancing its aerial and undersea surveillance. It is also planning a new deep water port in the Arctic as a means of encouraging the growth in traffic, trade and mining that everyone now anticipates.
Are there other sparkling prospects?
Yes – diamond mining. Canada’s three Arctic provinces are Yukon, Northwest Territories and Nunavut. They cover an area the size of western Europe, with a population of around 100,000, more than half of whom are Inuit or other aboriginal people.
More than half of Northwest Territories’ economy is accounted for by diamond mining – an industry that only started in 1998. Tahera Diamond Corporation’s new mine at Jericho in the Arctic province of Nunavut is the third diamond mine in Canada, which is the world’s third-biggest producer of diamonds behind Botswana and Russia. BHP Billiton and Rio Tinto both have diamond mines in northern Canada, and De Beers aims to start production at its mine next year.