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Geo Briefing: Arctic Tension

A Nato live fire excercise in Skjold, Norway A Nato live fire excercise in Skjold, Norway (Image: Robert Nickelsberg)
23 Mar
2015
As the Arctic heats up, so does the debate surrounding its ownership. With so much at stake, the Arctic region is becoming an increasingly geopolitical hotspot

While the UK’s House of Lords calls for an Arctic Ambassador, Russia vamps up its military presence in the region, and Dutch-Anglo oil giant Shell receives government approval for its Chukchi drilling campaign this week, the Arctic has never been busier. To help keep on top of it all, we explore some of the underlying reasons behind the recent tensions in the area.

1) THE ARCTIC COUNCIL

ac-kiruna 09 copyThe Arctic Council in its eighth session in Kiruna (Image: Jonas Karlsbakk)

As a large body of water surrounded by so many coasts, the Arctic needs a large forum for any kind of political discussion. The Arctic Council does some of this legwork. Established in 1996, the council brings together the member states of Canada, the US (Alaska), Russia, Norway, Denmark (Greenland), Sweden, Finland and Iceland alongside six permanent indigenous groups such as the Sámi people and the Inuit Circumpolar Council.

What was once a rather quiet, internal forum is gaining an international presence. As of last year, twelve non-Arctic ‘observer’ states have a voice in the council, including China, the UK and faraway Singapore. Why the enthusiasm? As the ice melts, many Arctic, non-Arctic and NGO groups are looking to the North to eye-up potential business, military and resource opportunities, as well as the potential risks.

Unlike the Antarctic, the Arctic does not have a comprehensive treaty to control all of these elements and the Council tends to exclude itself from matters of peace and security. However, as interest ramps up in the Arctic, the council may find it will have to take on a stronger, more geopolitical role.

 

2) DEFINING NATIONAL BOUNDARIES

graphic copyArctic Claims (Image: International Boundaries Research Unit, Durham University)
We all remember the rather controversial move made by Russian scientists who planted a Russian flag under the North Pole. This has sparked some debate about a so-called ‘scramble’ for the Arctic.

As it stands, each Arctic state has sovereignty over an Exclusive Economic Zone (EEZ) which extends 200 nautical miles from their respective coastlines into international waters. Within each of their 200nm circumferences, each country has exclusive rights to the marine resources found there. This leaves a hole of unowned seabed in the centre of the Arctic.

Crucially, a state may lay further claim to the seabed up to a maximum of 150nm beyond its 200nm EEZ (to a total of 350nm). In this 150nm addition, a state would have sovereign right to the non-living resources only (oil, gas, minerals). That is, if the state can prove the seabed belongs to its extended continental shelf. In the last decade, scientists from Canada, Denmark and Russia have been making substantial claims to the seabed around the North Pole. Problematically, their claims overlap. The answer lies in the origin of the Lomonsov ridge, a submarine mountain range that straddles the Arctic. In essence, the continental shelf which created the ridge can have the sovereign claim to the territory surrounding the North Pole. The Russian flag was planted by scientists while they gathered geophysical evidence for their claim. Since then, Canada has submitted a claim of its own to for an extended continental shelf, followed by Denmark last December.

The claims are submitted to the United Nations Convention on the Law of the Sea (UNCLOS), which is not expected to validate any of the scientific claims for another ten years.

 

3) ARCTIC RESOURCES: HIGH-RISK, HIGH-GAIN

globe2The map above shows the oil estimations in blue. Russia has the most to gain from EEZ claims with vast reserves of hydrocarbons in the seabed (Image: Op.N)
The Arctic has been pegged as the final frontier for fossil fuels. This is ironic given that it becomes more temperate, ice-free and drillable from burning fossil fuels. A report published in 2008 by the US Geological Survey estimated there were 90 billion barrels of undiscovered oil and 1,670 cubic feet of natural gas in the Arctic.

This survey has tempted Arctic and non-Arctic state alike. The numbers amount to around 22 per cent of the world’s technically recoverable resources. But are they technically recoverable? Not immediately, but inevitably. Oil projects are being dictated by two dynamics: the expense of operating in such harsh conditions and the plummeting price of oil. As a result, big oil companies are looking at Arctic exploitation as more of a long-term investment.

However, the UN’s 2oC target may be something of a gamechanger. New modelling research conducted by the University College of London suggests that most of the world’s fuels are unburnable if the climate target is to be met. This could render any drilling in the Arctic ‘inconsistent’ with that target.

Unless world markets are willing to uphold these kind of climate targets, the high-gain potential from fossil fuels will ensure that drilling is part of the Arctic’s future.

 

4) SHIPPING

northern-sea-routes copyProposed routes by Yamal LNG (Image: Yamal, Total)

The Northern Sea Route (NSR) and the Northwest Passage (NWP) make exciting news at business conferences. Last year, the first unescorted cargo vessel traversed the NWP while the NSR, once a throughfare for Soviet vessels, may be on the way to resuming its former traffic.  As alternatives to the Suez and Panama canal respectively, each could cut as much as 40 per cent from distance costs.

However, there are other costs to consider such as the high fuel consumption of ice-class vessels, icebreaker escort fees and paying for experienced (and therefore expensive) Arctic crew – costs which don’t make economic sense for a standard shipping company. Instead, most shipping will be destinational, as opposed to dual directional, transporting Arctic hydrocarbon out of the Arctic to the rest of the world.

For this kind of destinational shipping, the Russian Yamal LNG gas plant will act as a guinea pig for the feasibility of modern shipping along the Northern Sea Route. It is due to come online in the next three to four years. However, Malte Humpert, director of the Arctic Institute and shipping expert, comments on the link between the Arctic resources and Arctic shipping: ‘If oil prices remain low we’ll see less activity in that sector resulting in less shipping. It’s all interconnected.’ So until 2020, the NSR and the NWP will probably remain a niche and experimental venture.

But what about in the long run? ‘In ten to twenty years we’ll maybe see an increase in transit, maybe 200–300 journeys or so by 2025. By 2035, if ice melt continues at existing rates, we could see more than that,’ says Humpert. ‘What happens by the middle of the century really depends on climate change. If we have an ice-free ocean for, let’s say, half a year by 2050, then existing trade patterns might shift a bit towards the Arctic, maybe to the tune of several hundred transit voyages.’

 

5) MILITARY

bildeCanadian forces performing a sovereignty exercise in the Arctic (Image: Canadian Forces)

The re-militarization of the Arctic has everything to do with all of the above. As if overlapping sovereignty claims are not enough, there are resources and shipping lanes also in contention. Therefore, it is hardly surprising that Arctic countries are flexing their muscles.

Canada has just committed to spending CA$3.5billion on Arctic defence and Denmark has injected vast amounts of time and money on its Arctic Command. However, the headlines hover on Russia. When it comes to Arctic defence, Russia’s recent military exercise demonstrated that it is second to no-one. Constant upgrades to its naval forces and the re-opening of Soviet army bases point towards an extensive Arctic system of defence and rescue which stretches the length of its northern coastline. While it appears to be an unsubtle show of strength, Russia’s militarisation may also come from a need to bolster Arctic infrastructure as interest in the region continues to grow. Perhaps it is both.

While the intentions of Canada, Denmark and Russia are multifaceted and ambiguous, it seems needless to say that the militarisation is not an act of old-school cold war aggression as opposed to a very new reaction to a contemporary issue. The warming of the Arctic brings with it new territory, both literal and figurative.

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