The Race for Santa’s Backyard

Global warming is causing Greenland’s glaciers and ice fields to melt. The extent of sea ice now found at the North Pole is decreasing year by year, and the huge permafrost areas of Russia and Canada are beginning to thaw. This has led to speculation that with the opening up of the Arctic, a scramble for its abundant resources may take place. Many studies, including those by the private sector and the U.S. Geological Survey, confirm that there are vast treasure-troves of oil, gas, and minerals in the Arctic regions including diamonds, iron ore, and gold. And yet these resources have so far not been exploited, with the exception of iron ore in Greenland. This leads us to the question what is real and what is not in today’s Arctic debate.

Most of the discussion surrounding Arctic resources is hype. Despite global warming, the Arctic remains a very inhospitable place, and there are innumerable obstacles to cashing in on the Arctic riches. It remains cold in the north, and even if resources could be extracted there is no infrastructure to transport them. Oil rigs require airstrips, roads, electricity generation and pipelines; mining operations require port facilities and the technology that can withstand the bitterest Arctic winters. All activities require specialist workers, who often don’t live in the Arctic. For the private sector to develop any part of the Arctic, huge investments of capital and labor in transportation would be necessary.

There is a potential that the Arctic seaways – running through Canada and along the Russian coast – will be open to some form of transportation for most of the year in the future. Large container ships, however, will be unlikely to use these routes because even with open seas the Arctic will remain an unpredictable and dangerous place for sailors. Neither Canadian nor Russian authorities can offer much in the way of support and rescue facilities in the event of emergencies along their northern borders. Therefore structural shipping in the Arctic, if it develops at all, remains a distant scenario. This is further evidenced by recent investments in the expansion of traditional global sea routes, such as the Panama Canal. The port of Reykjavik in Iceland, which would be ideally positioned to serve as a future hub for northern sea routes, has seen no such investment.

And yet as activities in the Arctic increase problems begin to emerge. There is no labor force in the region that can be quickly recruited, but there are indigenous peoples who are struggling to adjust to the changing environment. Arctic Russia has seen a demographic shift in which non natives now form a majority of the population, bringing social problems that are new to this region such as prostitution and human trafficking. Seeking to develop local resources without taking into account indigenous needs could exacerbate social problems. In Canada, the government has acknowledged this. Section 35 of the Canadian constitution states that existing rights of the indigenous tribes will be recognized, and this means that they will be granted “Indigenous Benefit Agreements” if there are any royalties to be had from the minerals, the oil, or the gas. This would require covering such issues as training, health, and safety concerns. However this also creates new challenges, as seeking the approval of local populations for resource extraction can be tricky. Indigenous representatives often lack the skills and expertise to actually negotiate agreements on these matters. Canadian officials complain that instead of saying yes or no when asked to approve a project, these representatives often remain silent.

Permafrost thawing has proved an additional obstacle to developers. It has made construction of roadways and airfields much more difficult, and in some cases has caused extractive projects to be bandoned. This process has already caused enormous problems in Russia, where large cities such as Yakutsk and Noril’sk are in permafrost area, as are several large river ports, pipelines, conventional hydro electricity plants and even a nuclear power station. Yakutsk in particular has seen severe damage to its infrastructure and the closure of a runway of its airport as a result of the land below melting away. On top of that, scientists quarrel over the exact effects that permafrost thawing will have in terms of emissions of greenhouse gases. But empirical evidence from Sweden suggests that significant extra methane emissions – which are twenty times more damaging than carbon dioxide – are to be expected as permafrost continues to thaw. Since permafrost covers roughly 25% of the earth’s land surface, the consequences of its continued thawing in terms of accelerating climate change could be enormous.

There are two views on the future political stability of the Arctic. One is that governance of the Arctic is evolving peacefully – an Arctic Council was established in 1996, building on momentum from a 1987 speech by Gorbachev calling for the Arctic to be a “zone of peace.” The Council includes not only the Arctic countries (Russia, the United States, Canada, Denmark and Norway) but also Finland, Iceland and Sweden. These countries have reached many agreements on cooperation for such things as oil spills and drilling disasters. Most geographical boundaries in the region have now in fact been agreed upon, with international status of the Canadian Northwest Passages serving as a rare exception. The Arctic Council is thus seen by many as a potential forum for managing future resource disputes.

The other view argues that growing nationalism over the Arctic and its resources, particularly in Russia and Canada, paints a far bleaker picture. The current Canadian Prime Minister, Stephen Harper, is very bullish on Canada’s rights in the region, and some have even alluded to him as a “purveyor of polar peril.” A striking example of an incident turning into international conflict close to the Arctic region was the so-called Turbot War of 1995, an international fishing dispute off the coast of Newfoundland between Canada and Spain over alleged illegal overfishing. The fact that the Russians have themselves made dramatic and provocative gestures, such as sending a submarine to the North Pole and laying a Russian flag, has made matters worse. As a consequence, and with mutual suspicions on the rise, Russia, Canada and Norway are investing in maritime reconnaissance and long-range strike capabilities. For the first time, Canada is building Arctic-capable offshore patrol vessels.

It is still premature to talk about a race for the Arctic in terms of resource extraction and northern sea routes. Certainly there are encouraging signs of Arctic cooperation and wise, if limited, development of resources. However this is a region where isolated incidents can quickly turn nasty. Moreover climate change and permafrost thawing are already dramatically changing the game on the ground, and there is little reason to hope that any of these processes can be reversed in the near future. Therefore, this Christmas, it bears keeping in mind that all is not quiet in Santa’s backyard.