5: Large deposits of oil and gas
However, some also see new opportunities in climate change. At sea, climate change is a potential “game changer” that opens up new opportunities for utilizing natural resources both in the Arctic Ocean itself and on the seabed. In 2008, when the international oil price was at its highest ever, the US Geological Survey announced that about a quarter of the world’s undiscovered oil and gas resources were in the Arctic. This accelerated the discussion on how these resources could best be managed.
Already today, the Arctic accounts for 2.6 per cent of the world’s total oil production and 16 per cent of gas production. On the Norwegian side, Snøhvit is the most important field. On the American side, President Donald Trump in 2018 scrapped the ban on drilling for oil and gas in Arctic waters, which, should it turn out that this would be economically profitable, could open up new activity in the waters off Alaska. But so far, the most important breakthrough for Arctic energy production has been the development of gas deposits on the Jamal Peninsula in Western Siberia.
Both the Norwegian authorities and commercial actors have previously had high expectations of the Arctic as a new energy province, especially related to Norwegian participation in the development of offshore fields in the Russian sector. But with current oil prices, it is not profitable to develop offshore fields in the Russian Arctic. After Russia annexed the Crimean peninsula in 2014, the Russian energy sector has also been hit by international sanctions. Given that it is estimated that as much as 80 percent of the undiscovered oil and gas resources in the Arctic are located on Russian territory, this means that expectations of the Arctic as a new important energy region have been sharply downgraded in recent years.
6: New trade routes?
Less ice could also contribute to the Arctic playing a greater role in international trade. Today, most trade between Europe and Asia passes through the Suez Canal in Egypt, but the sailing time between Northern Europe and East Asia is significantly shorter if you use the Northern Sea Route (also known as the Northeast Passage), the shipping route from the Atlantic to the Pacific north of Russia. For example, a ship traveling from South Korea to Germany will spend an average of 34 days via the Suez Canal and 23 via the Northern Sea Route. This can mean time, and thus money, saved.
The northern sea route was developed during the Soviet era in order to supply the inhabitants of northern Siberia with necessities of life during the short summer months when the sea was navigable. After the dissolution of the Soviet Union, the sea route lay almost barren for many years, but with faster ice melting, the Russian authorities now see new opportunities. China is also looking with great interest at the opportunities that open up with such an alternative – and much shorter – sailing route. In recent years, freight volume has increased sharply. But the northern sea route is still navigable only 3-4 months a year, and in 2017 the total volume of freight was 10 million tonnes, while more than 1,000 million tonnes went via the Suez Canal. There are also many unanswered questions related to both the profitability and feasibility of the Russians’ ambitious plans for this sea route.
7: From Arctic “race” to long-term perspectives
The process leading up to a division of the Arctic Ocean is underway. According to ehotelat, once all countries have been finalized where the outer boundaries of their continental shelf are to be drawn, the majority of the Arctic Ocean will be under national jurisdiction. This is positive because it prevents rogue actors from being free to exploit resources on the seabed in the vulnerable sea areas in the north.
It is also important to emphasize that the announced Arctic “race” in the aftermath of the Russian flag planting in 2007, where everyone was suddenly very busy securing resources and positions in the Arctic, has today given way to a more sober understanding. of the rules, time perspectives, challenges and opportunities that exist with a view to exploiting the resource potential in the Arctic. Although climate change is leading to rapid change, it will take time to put in place the necessary technology and infrastructure for commercial exploitation. We are not talking about years, but decades. Planned territorial expansions will thus first and foremost be of benefit to future generations.
Last but not least, despite the fact that relations between Russia and the other Arctic states are now worse than ever after the Cold War, all five Arctic coastal states agree on the rules of the game for the division of the Arctic Ocean. Overlapping requirements must be resolved through negotiations, not unilateral territorial expansion. Thus, there is hope that the good cooperation that has traditionally dominated international relations in the Arctic will be able to continue. The fact that the Arctic states in October 2018 signed an agreement banning fishing in international waters, bodes well in this respect . The states in the Arctic are ready – and willing – together to take responsibility for sustainable and peaceful development.
- Territorial waters: 12 nautical miles (22 kilometers) off the coastline. Full sovereignty over the sea area, as well as airspace above and the seabed below.
- Exclusive economic zone : up to 200 nautical miles (370 kilometers) from the coast. Control of exploration and extraction of natural resources in the sea and on the seabed, but virtually free movement of vessels from other states.
- Continental shelf : Submarine extension of the land mass out to the great ocean depths. On the continental shelf, the coastal state has sovereign rights over the resources in and on the seabed, but not over the resources in the sea.
- The deep seabed: the seabed off the continental shelf, where the resources in and on the bottom are “the common heritage of mankind”
(One nautical mile equals 1852 meters.)