The Arctic Resource Rush Is On

By Ed Struzik, Yale Environment 360. Posted July 10, 2008.

In spring, the shores of the Arctic Ocean in Canada's Northwest Territories are buried deep in snow and ice, seemingly devoid of all life and resources. But not far under the surface, in the relatively shallow permafrost, lies what could be one of the largest sources of energy ever discovered, a slushy mix of water, ice, and natural gas known as methane hydrates. These days, Arctic geologists are scrambling to find methods to tap into this abundant store of energy.

Gas hydrates -- lattice-like ice structures that trap large quantities of methane, the major component of natural gas -- are just one of a trove of natural resources in and around the Arctic Ocean. Vast reserves of oil, natural gas, and minerals also lie beneath the frozen sea and land. For centuries, these riches lay out of reach. Indeed, as recently as five years ago, few companies dreamed of investing in the Canadian Arctic because there was no safe and economical way of extracting these resources and shipping them out. In an area nine times as large as California, there was -- and is -- only one highway, a third of it gravel, which goes to the Arctic Ocean. There is no seaport and no railway.

All that, however, is about to change, as a fast-moving confluence of events is turning the Canadian Arctic -- and some northerly regions of Russia and other Arctic nations -- into the next Klondike: Just as the Arctic's summer sea ice is melting at an unprecedented rate, soon opening up the fabled Northwest Passage and other shipping lanes, the booming global economy has created a soaring demand for natural resources, sending prices sky-high. The wealth that has lain untapped beneath the Arctic is now rapidly being opened for exploration.

Soon, not only will ships be steaming across the top of the world, shaving 7,000 kilometers off a Europe-to-Asia voyage that now takes them through the Panama Canal -- these vessels will also be able to penetrate previously inaccessible expanses of the Arctic to explore for, extract, and transport natural resources.

These developments will have profound environmental, economic, and global security impacts. Unlike Antarctica, where exploitation of minerals has been indefinitely banned under the Antarctic Treaty System, the Arctic is ripe for exploitation. And the environmental implications of this resource rush are sobering, with fleets of ships and oil tankers moving through a pristine marine environment and legions of workers on land drilling and digging for all manner of mineral wealth.

"It's only a matter of time before a single tramp steamer takes a run through the Northwest Passage," says Michael Byers, who holds the Canada Research Chair in International Law and Politics at the University of British Columbia. "Our ability to stop that ship or clean up if it runs aground and spills its load is severely lacking. We have the longest coastline in the world in a region that is covered by ice for most of the year, and we don't even have an all-weather icebreaker."

With so much money at stake, the Arctic has become a hotbed of territorial disputes as the surrounding countries spar for control of resources. In a report issued earlier this year, two of the European Union's top foreign policy officials warned of the looming international struggle over this energy rich region. The Bush administration, however, is more sanguine, arguing that existing maritime treaties and regular meetings of the five major nations bordering the Arctic Ocean -- Canada, Russia, the United States, Norway, and Denmark -- will ensure the Arctic's peaceful and responsible development.

This focus on the Far North comes as a result of the stunningly swift disappearance of ice in the Arctic Ocean. Scientists estimate that summer sea ice has declined by about 50 percent since the 1950s. Last year, summer sea ice extent reached a record low, and thick, multi-year sea ice now covers less than 30 percent of the ocean, down from more than 50 percent in the mid-1980s. Experts who once believed that the Arctic Ocean would not be largely free of summer ice until mid-to-late century now concede that the ice could be gone within a decade.

As a result, in nearly every corner of this icy world, resource companies are investing heavily. Energy and mining firms have announced a $17 billion Arctic exploration agreement with Russia. Exxon's Canadian subsidiary, Imperial, has formed a consortium to construct a $16 billion pipeline to send Arctic natural gas to southern Canada and the United States. Last summer, Exxon spent nearly $600 million for the rights to explore a tiny lease in the Beaufort Sea, and this year BP paid $1.2 billion to explore in the same region. French mega-uranium miner Areva, which is one of 40 companies looking for uranium in Nunavut, Canada's new Inuit territory, is considering developing a huge mine. Theirs is just one of 200 development and exploration proposals the once-neglected territory is grappling with these days.

See more stories tagged with: resources, global warming, climate change, ice, mining, oceans, artic

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