Race for Arctic Energy Riches Heats Up

Ed. Note: “The Arctic: Territory of Dialogue” conference in Moscow has been postponed because of the volcanic eruption in Iceland. It has been rescheduled to take place sometime in September.

Race for Arctic Energy Riches Heats Up

When Vladimir Putin calls for international dialogue and personally attends the resulting conference, you know Russia means business. Whether the intention is that the international cards are dealt fairly or the flim-flam of talking shop PR diplomacy, is hard to say. But the whimsically titled “The Arctic: Territory of Dialogue” conference on the future of the Arctic’s oil and gas riches represents new Cold War intrigue writ large.

The race for the Arctic’s energy bonanza is heating up. If you were in any doubt, check out this conference season. Last month, Canada hosted a summit of Arctic Ocean Foreign ministers from the littoral nations, i.e. Canada, the US, Russia, Denmark and Norway. It was billed as Canada finally taking its Arctic initiative seriously. But the conference only hit the headlines when US Secretary of State Hillary Clinton criticized the organizers for excluding other interested parties, especially the indigenous peoples and Iceland, Finland and Sweden.

In June, the Adam Smith Conferences will host the Russian Arctic Oil and Gas conference, this, again, in Moscow. But with the Arctic Council already supposedly the carriers of the torch for the new international Arctic “arrangements” why inaugurate yet another series of international talking shops?
Well, one major clue comes with the priority of the organizing group, the Russian Geographical Society (RGS), and with those invited as speakers and guests. The RGS, historically, is far better known for its environmental rather than energy concerns, as a review of its new “The Arctic” website confirms. According to Svetlana Mironyuk of Ria Novosti news agency, which is responsible for micro-managing the event, the conference will be “the first large project of the revived Russian Geographical Society.”

And, while Prince Albert of Monaco, the Aspen Institute Arctic Commissioner, is the honorary guest, it appears that he and Putin are the only invited statesmen. According to Mironyuk, this underscores the point Putin wants to make, that Arctic territory disputes are matters to be left to the “explorers and scientists.” Making the call for international dialogue in an address to the RGS in mid-March, Putin began with the politics: “There has been much ado around the Arctic region. You know how the [Russian] flag was erected [on the seabed] and how negatively our neighbours reacted to this. Nobody has stopped them erecting their own flags. Let them do it. But we work under the rules established by the United Nations and in line with maritime laws.”

Putin soon moved to other more esoteric matters. Indeed his RGS audience must have thought that Al Gore had been parachuted in as the Russian Prime Minister made an impassioned plea … to save the polar bears. Putin said, “The number of polar bears continues to decline. In fact, they are on the verge of extinction. Of course, this must not be allowed, and the polar bear should be preserved not only in zoos, but in wildlife also.”

Leaving aside that polar bears are actually currently thriving, as recent studies have shown, one can only gasp that the Russian PM has apparently found environmentalism being converted to a sudden concern for the Arctic wildlife. Am I being a little cynical perhaps, or is all this a clear indication that Putin is building an international case for Russia as the key Defender of the Arctic environment, to further bolster Russian geographical claims? You call it.

Meanwhile, if Russia is serious about taking the initiative in reducing growing tensions over Arctic territorial and mineral rights and potential future conflict, then there are certainly plenty of tensions around to defuse. Russia and the US have yet to resolve a long-standing demarcation dispute in the north Pacific; the US and Canada are arguing over large areas of the Beaufort sea; Denmark is wrangling with Canada over claims in Greenland; and there’s Norway’s claim to a massive portion of Russia’s continental shelf in the Barents Sea. Britain, too, has lately made a claim in the north Atlantic giving it “Arctic access.”

Then there are, of all things, China’s Arctic claims.

Currently on a worldwide metals and energy shopping spree, China too has shifted its eyes to the vast new energy frontier beckoning under the Arctic. China clearly has no intention of being dealt out of the Great Arctic Energy Game. Beijing has gained observer-status at the Arctic Council. It has opened research stations in Norway, at Spitzgen. It owns the world’s largest, Soviet-bought, ice-breaker with which it already plies Arctic waters. Though China has no rights to Arctic shelf deposits per se, it understandably has a serious interest in the region’s strategic and economic future. Not least, over new oil and gas fields, the settling of the legal rules for the polar oceans, border demarcations and, particularly, newly navigable Arctic waterways; shipping lanes that could significantly reduce the length of China’s westbound trading routes.

With potentially 15% of the world’s total hydrocarbon reserves at stake, Putin plainly wants to position Russia as the key dealer at the new Arctic energy table. He has a credible case. The RGS claims that 80 percent of the “Arctic land” is governed by the Russian Federation and Canada. And a US study in June 2009, authored by Californian geologist Dr. Donald Gautier, has acknowledged that Russia, with the longest Arctic border and its army of nuclear ice-breakers, does indeed “own the rights” to most of the Arctic’s energy riches. Gautier stresses: “Russia is already the world’s largest producer of natural gas, and so our findings suggest that the undiscovered resources are going to have the effect of more or less reinforcing that Russian strategic strength with respect to its natural resource potential.” Just what Europe, the US, China and Japan need — Russian calling the shots on a sizeable chunk of the world’s oil and gas resources for decades to come. No wonder Putin perceives an unprecedented opportunity to offer international seats to the Arctic Great Game, in anticipation that most won’t want to straggle in late being dealt out altogether.

Russia, like any new frontier pioneer, is going to need partners to overcome the enormous technological difficulties that lie ahead. Putin is no fool. By taking the roundtable diplomatic initiative as the leading Arctic energy power and chief protector of the Arctic environment, the new “green” Putin believes that “jaw-jaw” – on Russian terms, of course – is clearly better for business than energy “war-wars.”

The conference thus amounts to an invitation to interested parties to offer an international blessing to a betrothal and something of a marriage of convenience between the Russian and the Polar bear. Kismet, so Putin might believe, given that “Arctic”, from arktos, is the Greek word for bear.

© 2013 Energy Tribune

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