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Industries make a dash for the Arctic

A rush for oil, gas and valuable minerals is taking place on the roof of the world. New Scientist offers a guided tour of the region’s riches
Tourists trapped… I take payments in AmEx, cash and in seals
Tourists trapped… I take payments in AmEx, cash and in seals
(Image: Getty Images/All Canada Photos)

Editorial:Exploitation of the Arctic must be reined in

INUIT hunters of the Canadian Arctic have a new quarry. Last week, the Inuit-owned hit Wall Street asking for $18 million to help prospect half-a-million square kilometres of the Kitikmeot region in northern Canada. They expect to find gold, diamonds, platinum and lithium.

These prospectors are just one part of a major rush on resources, which will transform the Arctic as surely as the loss of ice. Symbolically, this year marked another record for the region: in 16 September, the polar ice cap shrank to 3.41 million square kilometres, the lowest seasonal minimum since satellite records began in 1979. The ice is now growing back for the winter, but in the long term both ice surface and volume are indisputably in decline. As we reported at the time (New Scientist, 1 September, p 6), the shrinking ice cap will have profound consequences for the rest of the planet – including changed weather patterns and water distribution – and the region’s biota has undergone vast transformation.

But that’s not all. The loss of ice, brought about by burning fossil fuels, is opening up the once-remote top of the world to industries keen to extract oil and gas, minerals and more (see map).

Most commentators expect the Arctic to play a key role in meeting the world’s energy needs in the 21st century. The US Geological Survey (USGS) says the continental shelves are the largest area on the planet not yet explored for oil and gas. It estimates that the Arctic contains 30 per cent of the world’s undiscovered natural gas, more than 80 per cent of it offshore.

“The Arctic will play a key role in meeting the world’s energy needs in the 21st century”

From the geology, the USGS reckons that the biggest oil and gas reserves will be off the north shore of Alaska, and beneath the Kara and Barents seas. Russia’s Yamal Peninsula already supplies around a fifth of the world’s natural gas. These areas seem poised to be the focus of the rush to exploit the Arctic’s riches.

Exploration and mining activities are booming, bringing infrastructure such as roads, ports and new settlements. Shell has already invested $5 billion in Arctic projects. London-based insurers Lloyd’s earlier this year forecast that up to $100 billion of investment would pour into the Arctic in the next decade.

Extracting hydrocarbons in the Arctic is scarcely new. Coal has been mined there for more than a century. But a combination of global shortages, rising prices, technical advances and the exposure of wide areas of the Arctic Ocean during summer melts, are triggering an explosion of activity.

The scale of the investment and the environmental damage it could bring about is attracting international concern far beyond the . The UK has no Arctic territories, yet the Environmental Audit Committee of the House of Commons last month condemned a “reckless gold rush in pristine wilderness”.

It called on the UK government to demand a halt to drilling for oil and gas in the Arctic until a pan-Arctic response system is set up to handle industrial accidents and spills. It also called for at least part of the Arctic to be set aside as an internationally recognised environmental sanctuary.

The Arctic Ocean remains a largely lawless zone. The International Maritime Organization is still developing the Polar Code, a safety code for ships, and there are few agreements on managing fish stocks or oil spills outside territorial waters.

On land, areas directly exploited for their minerals or hydrocarbons are likely to remain relatively small, but their footprint can be much larger. The worst case is the region around the Norilsk nickel smelter in Arctic Russia. For half a century, the smelter has been the largest single source of sulphur dioxide and metal air pollution in the world. The acid rain it has created has destroyed 8000 square kilometres of larch forest as well as lichen-covered tundra that was once the grazing grounds for the reindeer herds of the Nenets and Sami people.

Even if future industry cleans up its air pollution, essential infrastructure such as roads, railways and pipelines will fragment the landscape, upsetting migrations of caribou, reindeer and even lemmings, says Jan-Petter Huberth Hansen of the directorate for nature management in Norway. Arctic landscapes are among the last open wildernesses left in the world.

Perhaps the greatest concern is over oil spills. In an interview with The Financial Times, Total’s chief executive Christophe de Margerie last week said that drilling for oil on Greenland could be a disaster, adding that a leak within the Arctic Circle would seriously damage the image of the company. With ships from Greenpeace among the rapidly rising number of vessels heading to the far north, firms are having to factor in the risk to their reputation from an embarrassing oil spill as well as the dangers posed by passing icebergs and freezing temperatures.

Industries make a dash for the Arctic

Cruise control

If you want a cruise, the Caribbean is so out of date, darling. Nearly a million visitors go to the Arctic each year. They account for more than 80,000 hotel-nights on the Norwegian island of Svalbard. Even greater numbers visit Greenland, where they easily outnumber the local population of just 55,000 people. Canada’s Cambridge Bay – a stop on the North-West Passage – has seen a 30 per cent jump in tourists visiting the town in the past five years, with six cruise ships dropping anchor annually. – a giant residential vessel calling itself the world’s largest private mega-yacht – sailed through the North-West Passage for the first time in August. It was the largest passenger vessel to make the trip without an icebreaker to escort it.

The main limits to Arctic tourism are the paucity of onshore facilities and search-and-rescue services, in case of an accident. When a tourist ship ran aground in the Canadian Arctic in 2010, it took two days for the coastguard to reach it.

Plenty more fish in the sea

Warmer waters and a 20 per cent increase over the past decade in the volume of algae that sustain the marine food chain means there are more fish in the Arctic than ever before. And less ice means more open ocean in which to catch them.

The number of voyages by fishing vessels in the Canadian Arctic increased sevenfold, to 221, between 2005 and 2010. The Inuit of Nunavut now run six factory ships trawling for turbot and other species in Baffin Bay and the Davis Strait, up from none 10 years ago.

Climate change is altering the region’s fish population, as warmer water temperatures further south push commercial fish stocks into the Arctic circle. According to the US National Oceanic and Atmospheric Administration’s fisheries service, six species of fish have recently extended their range north through the Bering Straits into the Beaufort Sea in the Arctic. They include the Pacific cod, walleye pollock and Bering flounder.

But the surge north is bad news for the inhabitants of Narsaq in southern Greenland, who once prospered by catching and processing local shrimps. As the shrimps have fled north, the town’s fleet of eight vessels has been reduced to one, the shrimp factory has closed and the town’s population has halved.

Black gold

Burning oil helped melt Arctic ice in the first place. Now the – 13 per cent of the world’s remaining total – promise profit to anyone able to reach them. Oil companies have operated onshore in every Arctic nation for decades, but the new frontier is offshore, where conditions are tougher and a spill could be far more damaging.

Shell drilled two top wells this August on Alaska’s north shore, headed for the large oil deposits below. On the other side of the Arctic Ocean, Russian media report that the Prirazlomnaya platform in the Pechora Sea is the first permanent, ice-resistant oil production platform in the world. Russian oil giant Rosneft announced last year that it plans to build at least 10 more platforms.

Oil and gas investments in the Arctic are risky. Shell’s efforts have been dogged by regulation, ice, darkness and wild weather. Meanwhile, in August this year, state-owned Gazprom delayed a $15 billion gas production mega-project on the Shtokman gas field, 550 kilometres offshore in the Barents Sea.

Minerals galore

Mining is big business in the Arctic. Russia’s Norilsk mine is the world’s largest producer of nickel and palladium, and Alaska’s Red Dog mine is the world’s largest source of zinc. More record-beaters are set to break ground.

Last month, the Nunavut environmental assessment agency gave the green light for the Indian metals giant ArcelorMittal to dig an open pit iron-ore mine on 170 square kilometres of tundra at Mary river on Baffin Bay, Canada. The $4 billion project will be connected to a port in Baffin Bay by the world’s most northerly railway.

Greenland is attracting huge attention. The south-west coast, around Kvanefjeld, probably holds the world’s second largest deposit of rare earth elements and huge reserves of uranium and zinc – all together valued at almost half-a-trillion dollars. Last month, Greenland Minerals of Perth, Australia, announced plans to carry out a feasibility study. The project could keep miners busy for 100 years. And in northern Sweden, the town of Kiruna is being moved building by building, to extend iron-ore excavation at what is already the Arctic’s largest mine, and the world’s largest underground iron ore mine.

Full steam ahead

Receding sea ice is opening up the Arctic to shipping. The North-East Passage, linking the North Atlantic to the Pacific via the Arctic waters north of Russia, was open for five months in 2011. More than 30 ships passed through, including a 120,000-tonne Russian gas tanker and Nordic and Japanese iron ore carriers taking Arctic minerals to China. In August, the icebreaker Xue Long, or Snow Dragon, became the first Chinese vessel to use the route.

The shortcut to Asia halves the shipping time from northern Europe to China to roughly 20 days, and avoids pirate-infested shipping lanes in the Indian Ocean. Russia expects a 40-fold increase in shipping along the route by 2020. American analysts say it could be carrying 5 per cent of world’s shipping by 2050.

To achieve this, Russia is conducting a new hydrographic survey of the route and setting up 10 search and rescue centres. As the ice retreats, it hopes to open a route away from the coast, through deeper waters north of the New Siberia Islands, where the largest ships can pass.

Meanwhile, however, the fabled North-West Passage through the Canadian high Arctic remains generally impassable.

Topics: Energy and fuels / Environment