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Which Nation Will Win the Race for the Arctic’s Oil and Gas?

The Arctic Frontier

As the Earth continues to warm from increasing global carbon emissions, the Arctic will endure a multitude of impacts from melting ice caps, a race to extract natural resources, and conflicts surrounding political boundaries. According to research conducted by U.S. Geological Survey, data extracted by petroleum engineers, and projections from global energy analysts, the Arctic could hold some of the largest remaining untapped fossil fuel reserves in the world. The harsh and frigid Arctic environment hosts significant oil and natural gas reserves that can be found throughout remote onshore and offshore location (USGS, 2008). Until recent decades, the unforgiving Arctic climate, severe weather, extremely remote locations, and inadequate physical infrastructure has made the process of fossil fuel exploration and production too expensive and hazardous for even the world’s most advanced oil companies. However, as a result of warmer summer temperatures and decreased sea ice, an international race has begun to explore for oil and gas in the Arctic.

Canada, China, Russia, and the United States are the main international players in the battle for the Arctic’s fossil fuels. As the international race for natural resources heats up, some are calling it the 21st century’s cold war because of rising tensions and quite literal frigid temperatures. Research suggests that over $35 trillion worth of untouched oil and natural gas resources could be located within vast onshore and offshore reserves (Dillow, 2018). With more than half of the Arctic’s total coastline located along its northern shoreline, Russian leaders are convinced that their continued economic and military presence will ensure that much of the Arctic’s fossil fuel reserves can be extracted by Russian oil companies. On the other hand, China has also been making a push for additional Arctic presence with President Xi Jinping’s recent Belt and Road Initiative, which is projected to open up numerous new shipping lanes through previously inaccessible routes that have been opened up due to the impacts of global warming.

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Boundary Conflicts

For decades, the Arctic has been encircled in a number of boundary-related conflicts. Throughout the early to mid-20th century, the Canadian government exploited indigenous populations through a series of resettlement programs that were aimed at maintaining an effective occupation of the region to convey Canada’s sovereignty over the Arctic. The absence of well-defined physical or political borders led the Canadian government to unethically exploit indigenous populations throughout the 1930s and the 1950s in order to secure territorial claims over exclusive economic zones (Mowat, 2002). While this example took place many decades ago, today’s political climate has initiated new transboundary tensions with regards to the possibility of a warming Arctic making large reserves of oil and gas more accessible for extraction.

The U.S. Geological Survey estimates that there are around 412 billion barrels of oil in the Arctic waiting to be discovered (Macalister, 2015). As the ice continues to melt in the Arctic, the region’s stakeholders will continue to scramble to access these untapped reserves. In addition to Canada, China, Russia, and the United States being the main players vying for control, Denmark, Norway, and Iceland have also been working to negotiate more control over the region. These stakeholders have been systematically applying for rights to access oil and gas reserves through territorial claims under the United Nations Law of the Sea Treaty (Macalister, 2015).

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Russian Aggression

With estimates suggesting that the Arctic may hold almost 13 percent of the world’s remaining untapped oil reserves and over 25 percent of the remaining natural gas reserves, Russia is making some of the most aggressive moves to convey authority over the region (Bryce, 2019). In 2017, Russia made international media headlines after sending a pair of military submarines down nearly two and a half miles below the Arctic Ocean in an effort to plant the country’s national flag on a section of the vast continental shelf that is recognized as the Lomonosov Ridge. While experts in international law and policy say that this move is more of a symbolic gesture than a sign that Russia actually intends to claim natural resources rights within the region surrounding the Lomonosov Ridge, some American defense analysts have labeled this as a sign that Russia may continue to escalate hostility in the region.

In addition to making symbolic moves to stake a claim on oil and gas reserves, Russia has become the world’s leader in Arctic infrastructure development. As the Arctic ice continues to pull back, Russia has been quick to reopen numerous abandoned Soviet-era military bases and add additional airfields and military facilities along its northern territory, while also developing a series of ports along its northern border with the Arctic Ocean. In 2017, Russia’s Rosneft state-controlled oil company initiated a drilling operation with the Arctic’s northernmost oil rig in an attempt to extract oil from a reserve that could hold over half a billion barrels of oil (Dillow, 2018). In addition to Rosneft’s operations, other Russia fossil fuel giants like Gazprom Neft have already been pumping Arctic oil in the Pechora Sea and the Laptev Sea. By 2050, Russia hopes to have Arctic oil from offshore reserves account for at least 20 to 30 percent of all Russian oil production (Dillow, 2018).

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U.S. Arctic Operations

In recent years, the United States has also moved forward with plans to extract fossil fuels from the Arctic. In January 2018, leaders from the Trump administration revealed plans to open up much of America’s outer continental shelf for offshore oil drilling, which would include areas off the northern coast of Alaska. Moreover, government plans also show how policymakers plan to start leasing land in Alaska’s Arctic National Wildlife Refuge to fossil fuel companies, because the refuge contains a massive 1.5 million-acre coastal plain that’s been shown to be rich in fossil fuel reserves (Bryce, 2019). However, these plans have been met with a significant amount of pushback from scientists, environmentalists, and organizations like the Natural Resources Defense Council, because of concerns related to the region’s vast array of plant and animal biodiversity.

As oil and gas exploration is becoming increasingly prevalent in an area that is already experiencing swift environmental changes as a result of global warming, scientists say that it is vital for global leaders to weigh the economic benefits of Arctic fossil fuel extraction with the risks associated with increased exploration and production efforts. In the past, the 50-year-old National Environmental Policy Act required that federal agencies consider potential impacts on sociocultural, economic, or other natural resources prior to moving forward with significant plans to expand fossil fuel production (Allison & Mandler, 2018).

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Federal Regulations

In coordination with gutting numerous other policies and environmental regulations for the benefit of the fossil fuel industry, the Trump administration has announced that his administration has been working to disassemble the National Environmental Policy Act to decrease obstacles related to fossil fuel infrastructure development, which could vastly increase opportunities for American oil and gas companies to explore for energy in the Arctic. The Trump administration hopes that removing mandatory social and environmental reviews will work to streamline fossil fuel production and jumpstart American efforts in the race for Arctic oil and gas.

Throughout federal waterways, the U.S. Bureau of Ocean Energy Management is charged with conducting resource assessments to evaluate the potential value of fossil fuel reserves, review oil and gas drilling plans, and perform necessary environmental assessments. Following assessments conducted by the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement is tasked with regulating all offshore oil and gas drilling and production activities. Furthermore, a series of rigorous safety controls are upheld to ensure that leaking oil is captured, and environmental impacts are minimized. As a member nation of the United Nations Convention on the Law of the Seas, the U.S. has been granted with exclusive access to economic zones up to 200 nautical miles off mainland coasts, which would allow the U.S. to exercise legal jurisdiction over portions of the Arctic (ASP, 2019). However, even with a rigorous system of federal environmental oversight and legal access to exclusive economic zones, there are numerous other challenges associated with Arctic oil and gas exploration.

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Indigenous Communities

There are numerous indigenous communities (other than those forcibly moved to the Arctic by the Canadian government) that still inhabit the region. Estimates suggest that there are over 500,000 indigenous Arctic residents that reside in the region throughout communities that extend beyond modern political borders (Roston & Migliozzi, 2017). In recent years, a significant number of the indigenous communities have started to come together in an effort to be recognized as a stakeholder within the international negotiations. Some organizations focused on societal equity say that it is imperative for these communities to be given a seat at the international negotiation table because their way of life and culture could be impacted by enhanced economic activity in the area. Moreover, many indigenous community leaders view the expansion of the oil and gas industry in the Arctic as a significant environmental threat.

Environmental Degradation

To address concerns related to environmental degradation caused by the oil and gas industry, the Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic was ratified in 2014 by Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States in order to strengthen the coordination of emergency management operations in the event of an Arctic oil spill. The international agreement established a series of recommendations and best practices to provide mutual aid if an oil spill surpasses one nation’s ability to effectively address it alone (Government of Canada, 2017).

While the Agreement on Cooperation on Marine Oil Pollution Preparedness and Response is a step in the right direction, it does not effectively address the prevention of oil spills in the first place. Rather than designing an international agreement that establishes guidelines on how to adequately work together across political boundaries to clean up spills, some environmentalists say that it would be more prudent to establish a rigid agreement with the aim of working together to prevent oil and gas spills from occurring in the first place. A stronger agreement would establish a set of policies that all stakeholders would employ as part of any oil and gas extraction project to better ensure that the Arctic ecosystems and the indigenous communities are sufficiently protected from the adverse impacts of the industry.

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Future Geopolitical Tensions

In the coming decades, the social, economic, and environmental implications of Arctic oil and gas exploration will become more visible. Moreover, as the emerging economic and strategic value of Arctic occupation is realized, the potential for escalating geopolitical tensions is expected to rise substantially. As a result of these tensions, the U.S. military is already taking actions to safeguard American assets in the region. U.S. Coast Guard Commandant Adm. Paul Zukunft recently unveiled plans that showed how a state-of-the-art heavy icebreaker will be added to the Coast Guard’s fleet by 2023, where it will be deployed to the Arctic to counter increased military activity from China and Russia. As boundary disputes continue into the future, it will be essential for the world’s leaders to maintain international cooperation rather than increase tensions. Enhanced negotiation efforts over the oil and gas reserves will ensure that the race for the Arctic doesn’t turn into a modern cold war.

Sources

Allison, E., & Mandler, B. (2018). “Oil and Gas in the U.S. Arctic: Managing resources in an oil- and gas-rich but harsh and fragile environment.” American Geosciences Institute.

ASP. (2019). “The Arctic – America’s Last Energy Frontier.” American Security Project.

Bryce, E. (2019). “Why Is There So Much Oil in the Arctic?” LiveScience.

Dillow, C. (2018). “Russia and China vie to beat the US in the trillion-dollar race to control the Arctic.” CNBC.

Government of Canada. (2017). “Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic.” Canadian Ministry of Environment and Climate Change.

Macalister, T., (2015). “The New Cold War.” The Guardian.

Mowat, F., (2002). “White man’s Law.” Canadian Geographic. September/October: 66-74.

Roston, E., & Migliozzi, B. (2017). “How a Melting Arctic Changes Everything.” Bloomberg.

USGS. (2008). “Circum-Arctic Resource Appraisal: Estimated of Undiscovered Oil and Gas North of the Arctic Circle.” Fact Sheet 2008-3049. U.S. Geological Survey.

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