As climate change and the infamous greenhouse effect melt away the Polar ice caps, heat up the Arctic at twice the rate of the rest of the world and make the Arctic waters more navigable, the geopolitical significance of the region is uncovered. The Arctic is believed to have reserves of approximately 90 billion barrels of undiscovered, technically recoverable oil, about 44 billion barrels of natural gas liquids and 47 trillion cubic meters of natural gas. This represents 13% of the undiscovered oil in the world and 30% of all undiscovered natural gas, altogether the Arctic holds about 22% of all undiscovered hydrocarbon resources. The arctic area also holds large quantities of minerals, including phosphate, bauxite, iron ore, copper and nickel, all of which are instrumental to industrial production. On top of the vast hydrocarbon and mineral resources in the Arctic, the thawing icecaps create new maritime commerce routes. These routes could transform trade between the Asia-Pacific region and northern European economies and they are often many days quicker for shipping than the traditional Suez Canal or Middle-Eastern routes. The Northwest Passage through the Canadian northern archipelago is also becoming more navigable, and the milestone of a cargo ship travelling through the Northwestern Passage without the aid of an icebreaker has already been passed. Another potentially crucial shipping route is the Northern sea route above Russia, which could transform trade between China and Northern Europe. The Northern sea route has already occasionally been used since the 1930’s, but harsh conditions and poor infrastructure have so far rendered it inconsequential. Although the exploitation of natural resources and increased shipping in the Arctic will cause devastating damage to the environment and ecosystem of the North Pole, shorter cargo transport distances will reduce the carbon emissions and environmental damage caused by global shipping . The fast warming of the Arctic climate and the receding ice also present new opportunities for commercial interests like fishing and tourism.
The scramble for the Arctic As projections of the vast wealth and commercial opportunities in the Arctic grow, the interests of both nations and companies are awoken. Companies in the energy industry, for example Exxon Mobil and Rosneft have already acquired drilling licenses in the region and competition for pockets of resources is ongoing. In the wake of such vast commercial interests the costly environmental effects of extracting Arctic resources is unlikely to mean much. What will matter to these multinational companies however, is the market value of their energy products, as the costs of acquiring hydrocarbon resources in the treacherous Arctic climate are high and without reasonably high profit projections major drilling operations in the Arctic are not feasible. In recent years energy prices have remained uncomfortably low, but as oil prices show signs of recovery and the Arctic climate becomes more hospitable,
the incentives to drill in the Arctic are likely to grow. Along with multinational companies, states bordering the Arctic ocean have begun competing for sovereignty over islands, resources and trade passages. Denmark, Norway, the United States, Canada and Russia have all submitted, in parts competing, claims over swathes of territory in the Arctic. What makes the scramble for Arctic territory more complicated and diplomatically awkward is that the United States is not signatory to the United Nations Convention on the Law of the Sea, which is usually applied in disputes over maritime territory. The United Nations Convention on the Law of the Sea states that a nation’s exclusive economic zone (EEZ) stretches 200 nautical miles (370 km) from it’s coastline and that nations are free to exploit all marine resources within this area. On top of this, if it can be scientifically proven that a country’s continental shelf stretches beyond its EEZ, it can be extended further. All competing parties in the Arctic have submitted their claims to their extended EEZs, but as the U.S. is not signatory to the Convention on the Law of the Sea, it leaves the door open to aggressive territorial competition and for it to act without binding international agreements in claiming maritime territory. The U.S.’s absence in the convention could also give competitors such as Russia the excuse to disregard other nations claims to Arctic territory. The Arctic council, which consists of eight full member states (Russia, the United States, Denmark, Norway, Sweden, Finland and Iceland) is the main international body in the Arctic and it acts as an inter-governmental forum for its member states to discuss and deal with their interests, set rules and agreements and settle disputes. The main points of focus of the Arctic Council are environment and climate change, security and stability, the rights of indigenous peoples in the Arctic and sustainable economic development.
Russia and the rest The priorities of the many nations active and competitive in Arctic policy differ widely. By far the most active and assertive nation to respond to the opportunities that the Arctic presents is Russia, which has its own Arctic policy and it’s own ideas on the future of the region. Russia’s Arctic coastline EEZ is estimated to contain about $22 trillion worth of natural resources. Russia views the increasing accessibility of Arctic resources as an opportunity to expand it’s large energy sector, upon which the nation’s economy is largely dependant and the increasingly navigable waters in the region as an opportunity to control the lucrative shipping between East Asia and northern Europe. In order to safeguard its interests in the Arctic, Russia already holds a number of military bases and other installations in the region and has begun the construction of many more. Russia has added to its military presence in the Arctic and seems to be creating an “Arctic Army” to protect its interests both in northeastern Europe and in its Asian far east, where it’s military drills seem to concentrate on the U.S. threat. For example, Russia has plans to deploy sophisticated S-400 air-defence systems to its northernmost military outposts. The receding Arctic ice cover also expands the geographical operating range of Russia’s Barents Sea-based Northern Fleet, which has traditionally had an awkwardly limited operating space. Russia is also a leader in Arctic research, supported by both the state and large energy corporations. Most notably, back in 2007 a Russian expedition was the first ever to reach the seabed of the North Pole and made the symbolic act of planting a Russian flag on it. Russian research in the Arctic is partly aimed at backing up Russia’s territorial claims with scientific evidence about the extent of the countries continental shelf. Russia’s main territorial claims in the Arctic Ocean are over the Alpha, Mendeleev and Lomonosov ridges which run across most of the Arctic and which Russia claims are all part of its extended continental shelf.
Other nations with claims in the Arctic such as Denmark and Canada contest Russia’s claims over for instance the Alpha, Mendeleev and Lomonosov ridges. Canada’s main economic interests lie in the shipping through its Northwest Passage. Canada insists that the Northwest passage is part of Canadian internal waters, but due to its geopolitical significance the United States and Russia among others have disputed Ottawa’s exclusive claims over the trade route. Canadian researchers are currently surveying the waters of the Northwest passage to gather evidence to prove the legitimacy of Ottawa’s claims. Canada is also among the more environmentally conscious Arctic nations, as it has an interest in preserving the fragile ecosystem of its northern archipelago. In Europe the biggest competitors for resources and territory in the Arctic are Denmark and Norway which have both laid claims over portions of the region. Denmark’s involvement in the Arctic comes only from its ownership of the self-governing country of Greenland and it largely follows the Arctic strategy of the EU and the agreements of the Arctic Council. Norway has been an active nation in the region, with sophisticated research operations in areas like the Svalbard archipelago and claims to oil and natural gas reserves in the Barents sea. Norway shares but a thin border with it’s largest neighbour and biggest Arctic competitor Russia, but its territorial claims over seabed in the Arctic ocean have caused friction between the two Arctic powers. Amidst Russian militarisation of its Arctic claims Norway (a NATO member) has been an anxious advocate for increased NATO presence in the region. Along with Canada and Denmark, Norway also values environmental concerns and sustainable development of the Arctic economy in its Arctic agenda. The final major player in the geopolitics of the Arctic Ocean is the United States of America, with its connection to the Arctic through the state of Alaska. The U.S. is amongst the leading researchers of the Arctic and its energy sector has an interest in the hydrocarbon resources hidden in the Arctic seabed. The closest strategic partner to the U.S. in the region is Canada, as the two powers share similar commercial, environmental and social interests in the Arctic. There has, however been friction between the U.S. and Canada over the issue of whether the waters of the Northwest passage should be considered international or internal. Although the U.S. is one of the leading researchers and the biggest economic and military power in the region, lawmakers in Washington are still debating the existence of climate change and global warming and as long as the U.S. administration remains sceptical over the effects of climate change, it is unlikely to put too much focus on the opportunities and challenges in the region. Another, perhaps surprising actor in Arctic geopolitics is China, which has major commercial interests in the region in the form of shipping routes. Realising the potential of trade between Europe and China through the Northern Sea route of Russia and the Northwest Passage through Canada, China has run major research operations in the Arctic and in January of this year released its own Arctic Policy. China holds a permanent observer status on the Arctic Council.
The EU and the Arctic The European Union is also, or at least should be an Arctic power. Three of its member states (Denmark, Sweden and Finland) are members of the Arctic council and one of its members, Denmark is a direct claimant to territory and natural resources in the Arctic. On top of that the European Union would the biggest consumer market involved in shipping through the Northern sea route and the Northwest passage, and trade between Europe and East Asia is the biggest driving force for interest in Arctic shipping routes. These factors combined the EU has great pulling power in determining the future of the Arctic. The European Union is the world’s strongest proponent of greater international efforts to fight climate change, the effects of which are felt perhaps nowhere greater than the North Pole, where temperatures are rising at twice the rate of the rest of the world. The Arctic regions of the European Union are also home to indigenous peoples, such as the Same, whose traditional way of life and surrounding environment are under threat from climate change. The fragile ecosystems of Europe’s far northern coastlines look to suffer tremendously from warming temperatures and entire cities within Europe are at risk from rising sea levels due to the thawing of Polar ice caps. For these regions the EU needs to be careful when considering its approach to the economic opportunities in the Arctic. The reduction in ice covers has already begun and its progress in the near future is inevitable, the competition for territory and raw materials in the Arctic will continue and it will increase. And As tensions rise between competing interests in the Far North the EU must act as a voice of reason and international rules-based cooperation between the many power-players in the Arctic. The EU needs to safeguard its commercial, security, environmental and social interests in the Arctic while working to combat the root causes of climate change both within and outside of Europe.
TEXT Seán McLoughlin
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