Subject: Global Warming Sparks a Scramble for Black Gold Under Retreating
Ice

Published on Tuesday, April 18, 2006 by the Guardian / UK
Global Warming Sparks a Scramble for Black Gold Under Retreating Ice
by David Adam

Unlike the Antarctic continent spread around the south pole, the Arctic has
no formal international treaty to regulate activities. And while howling
winds, drifting icebergs and months of freezing darkness kept prospecters at
bay, there was little activity to regulate.

But as global warming thaws the ocean's icy layer, oil giants, shipping
companies and even the odd enterprising tourist operator are casting their
eyes towards the high north.

Last August a Russian vessel, the Akademik Fyodorov, became the first to
reach the north pole without an icebreaker - one of seven ships to make it
to the top of the world last year. This summer, Russian icebreakers aim to
go one better and take paying guests, for £17,000 each. If the ice continues
to thin and shrink as expected, then within a few decades cruise liners,
container ships and tankers could all head over the pole, shaving thousands
of miles off their voyages across the globe.

The biggest boom could be oil and gas. The US Geological Survey surprised
some experts when it declared that a quarter of the world's undiscovered
reserves lay under the Arctic Ocean. As the ice retreats, oil companies are
scrambling to open a new frontier.

Bruce Evers, an analyst with the London firm Investec, says the big
companies have no choice but to investigate the Arctic. "If they think there
is oil and gas there then they absolutely can't ignore it," he says. "If
there is going to be an Arctic Klondike rush then they will want to be there
along with every other Tom, Dick and Harry. They can't afford to sit and
watch the others explore and come up with some huge discoveries."

Attempts to open up the Arctic national wildlife refuge in Alaska to
drilling remain deadlocked in the US Congress, but several companies have
dipped more than a toe in the chilly Arctic Ocean further north. BP Amoco is
developing an Alaskan offshore oil deposit called Northstar and the
Norwegian company Statoil is working on a gasfield some 90 miles across the
frozen Barents Sea from its most northerly outpost, Hammerfest. Called Snow
White, the project is expected to start pumping liquefied natural gas to the
US and Europe next year.

The jewel in the Arctic energy crown is the Shtokman field, also in the
Barents Sea. Some 300 miles off the Russian Arctic coast and 10 times the
size of Snow White, it is the largest offshore gas reservoir in the world.
The Russian energy giant Gazprom is poised to announce partnerships with
other companies to drill up to 120 wells.

"It's an unfortunate fact of life that the climactically benign and
politically stable areas are running out of oil and gas," Mr Evers said. "So
in politically stable areas like the Arctic there's going to be a
substantial amount of interest."

That interest is already turning up the diplomatic heat, and there are a
growing number of territorial disputes between the eight countries with a
claim to the Arctic: Russia, the US, Canada, Norway, Denmark, Sweden,
Finland and Iceland.

A dispute between the US and Canada over rights to shipping lanes through
the North-West Passage flared up again this year, with Canada promising to
step up its military presence to protect what it regards as its territory
and the US sees as international waters. Norway and Russia are squabbling
over the Barents Sea, while Denmark is eyeing the north pole itself.

International law allows a country to claim the seabed up to 350 miles off
its coast, which is judged from the edge of its continental shelf. Existing
surveys show that no country's shelf extends far enough to give it a claim
on the pole, so a neutral area around it is administered by the
International Seabed Authority. To get round this, Denmark is trying to
prove that Greenland - a Danish territory - is connected to a 1,100-mile
underwater ridge that stretches towards the pole. Launching the effort in
2004, the Danish science minister, Helge Sander, said it was to give Denmark
access to "new resources such as oil and natural gas". Canada and Russia are
trying to make similar claims and it could take years to sort out.

Environmental campaigners are viewing the creeping development of the Arctic
with mounting concern. Norway announced last month that it will limit
drilling in some areas to protect fragile ecosystems. The 31-mile exclusion
zone in the Barents Sea has large supplies of fish. But the embargo expires
in 2010 and drilling elsewhere is being stepped up, with the granting of 13
oil and gas licences to 17 companies.

Stephanie Tumore, a climate campaigner with Greenpeace, said: "Haven't we
learnt anything? Why are we going looking for more fossil fuels when what's
happening in polar regions just proves that it is devastating and we cannot
continue to do that?"

The consequences: Precarious region

Wildlife
The Arctic is home to hundreds of species of mammals, birds and fish found
in few, if any, other places on Earth. Polar bears, musk oxen and caribou
are joined each summer by snowy owls, ducks and swans that migrate there to
nest. Some of the hardiest organisms discovered live within the ice, helping
to make the region a unique ecosystem. Now, 1,000 sq miles of Arctic tundra
on Alaska's North Slope is home to one of the world's largest industrial
complexes, with 28 oil production plants, 4,800 exploration and production
wells, 1,800 miles of pipes and 500 miles of roads.

Sea ice
Global warming has lead to an increase in melting of Arctic sea ice and in
one study last year, scientists predicted that 4m sq miles of permafrost
could shrink to 400,000 sq miles by 2100, disrupting ocean currents,
releasing huge amounts of carbon into the atmosphere and causing havoc to
roads and buildings across Canada, Alaska and Russia.

Mineral exploration
The melting of Arctic sea ice has made the region more accessible to
shipping, and oil and gas companies keen to prospect for natural resources.
Some estimates suggest that one quarter of the planet's untapped fossil
fuels, including 375bn barrels of oil, lie beneath the Arctic, and industry
experts talk of a "black gold rush" as companies clamour to exploit the
reserves. Off Norway's north coast, the state oil company, Statoil, is
engaged in project Snow White, which workers believe will generate £34bn in
liquefied natural gas over the next 30 years.

Pollution
Spillages and leaks add to the environmental damage caused by oil extraction
and, according to the Natural Resources Defence Council (NRDC), between 1996
and 2004, there were 4,530 spills of more than 1.9m gallons of diesel, oil,
acid and other chemicals along the Alaskan border alone. Last month,
hundreds of thousands of litres of crude oil gushed into the Arctic Ocean
from a corroded 30-year old BP pipeline. The NRDC says there is at least one
leak from an oilfield or pipeline every day.

Tourism
Global warming is also opening up the Arctic to tourism, with shipping
companies offering voyages to the north pole. Previously, only well-equipped
icebreakers would have been able to attempt the trip.

Guardian Unlimited © Guardian Newspapers Limited 2006

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