Suddenly, the oil and gas potential of the Arctic looms largeBy News Desk | May 27, 2013
The possibility of producing oil and natural gas from the Arctic region was always seen as a possibility, one that became more likely as the polar ice cap receded. But the pace of interest has surged, as Gary Gentile discusses in this week’s Oilgram News column, New Frontiers. ——————————————– The very word, “Arctic,” conjures images of frozen tundras, vast icy terrain punctuated by wisps of snow and ice, remote, forbidding and barren. So why did Iceland’s president recently tell an audience at Washington’s Brookings Institution that “the Arctic has become crowded?” Just a decade ago, it seemed no one wanted to talk about a coordinated, multinational approach to managing the Arctic. “The situation almost in every Arctic country was such that the future of this extraordinary part of the globe was very low on the list of concerns,” Ólafur Ragnar Grímsson, president of the Republic of Iceland, said April 17 at the Brookings event. The harsh environment itself seemed to isolate the region from those who would seek to exploit it for oil and gas exploration, especially offshore. And the mass of ice, which receded only for the blink of an eye during the Arctic summer, kept the area locked. But global warming has changed all that. Companies such as Shell, BP, Rosneft, ExxonMobil and others are venturing into the Arctic. Countries are sending ships, for the first time, through the newly opened central route, linking Asia with markets in Europe, the US and beyond. “As a reflection of that fundamental change, I will tell you that in every meeting I have had in the last 18 months with the leaders of India, China, South Korea, Singapore, the first item they brought to the agenda was the Arctic,” Grímsson said. Interest is so high on the part of India, China, Italy, Japan, South Korea and Singapore—hardly Arctic nations—that the countries sought and were granted observer status on the Arctic Council, an intergovernmental forum for Arctic governments and people. The EU also applied for observer status, but the council deferred action on the request at its May 15 meeting. The importance of this rapidly changing Arctic reality is so high — at least to some — that at the Brookings event, Alice Rogoff, who has organized Arctic events as publisher of the Arctic Dispatch, displayed a map with the North Pole at the center. It was a rather stark way of showing how the top of the globe has become top-of-mind most everywhere except, it seems, the US. “This is the most un-talked-about subject of the greatest strategic importance to the United States in the world that I am aware of today,” Rogoff said. Arctic issues have been discussed at the highest levels of the Obama administration. ——————————————– Last year, Hillary Clinton became the first secretary of state to attend an Arctic Council meeting. This year, incumbent Secretary John Kerry pledged full support for the work of the council, which the US will chair for a two-year term in 2015. “There is nothing that should unite us quite like our concern for both the promise and the challenges of the northern-most reaches of the earth,” Kerry said at the council meeting in Sweden. “What makes this organization so important is that the consequences of our nations’ decisions don’t stop at the 66th parallel.” At the Interior Department, Deputy Secretary David Hayes has been working to develop a coordinated interagency approach to Arctic issues. In 2011, he was named to head the “Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska.” The group pulled together agencies involved in permitting energy projects and quickly moved to make it easier to navigate the complex process. Hayes also chaired a group that issued a 66-page report this year on a coordinated, top-level approach to managing the country’s Arctic assets. The report called for the more than 20 US agencies that have some jurisdiction in the Arctic to coordinate scientific research, resource management, homeland security and support for local communities. And the US Coast Guard recently unveiled an Arctic strategy that calls for building more icebreakers over the next decade. Even with this new sense of urgency over Arctic issues, the US is seen internationally as lagging behind the rest of the world. Russia’s President Vladimir Putin has called two Arctic conferences in the last thee years and has given the keynote at each one. Singapore has named an Arctic Ambassador, who, Grímsson said, has been traveling Arctic nations, “looking for a location to build what they call a ‘global harbor,’ preparing themselves to become the Singapore of the Arctic.” “You only have one icebreaker. Russia has many. China is building new ones,” Grímsson said in a pointed challenge to the US. “Are you going to face a situation at the end of decade where not only Russia but also China has more icebreakers, more equipment, more research effort, more scientific knowledge on the ice in the Arctic than the United States?” –Gary Gentile in Washington © 2013 Platts, The McGraw-Hill Companies Inc. All rights reserved. To subscribe or visit go to: http://www.platts.com |