If the conflict with Georgia revealed anything, it is that Vladimir Putin does not play by the rules. Take the Great Arctic Game. In May, Russia met with Canada, Norway, Denmark (through its sovereignty of Greenland) and the U.S. (the four other nations bordering the Arctic) and agreed to abide by U.N. adjudication (what we will call Plan A) regarding the Arctic territory and mineral rights. Unfortunately, the U.N. does not have a good track record in resolving complex territorial disputes and defusing associated potential conflicts. Putin knows this. He also knows that the U.S. has yet to sign the U.N. Law of the Sea Convention of 1982.

Therefore, given the uncertain geopolitical realities and the importance of an energy-rich Arctic, one might think that all five nations would have a clear Arctic back-up policy, a Plan B, should the U.N. route fail. Plainly, Russia is already running with one: a pre-emptive power play designed to create “facts on the ground,” or, as we shall see, in the air and in the icy Arctic waters. What is all too transparent is that the four NATO states have no Plan B. They need to get one. Here's why.

What Lies Beneath?

According to a 2007 report from U.S. Geological Survey, the Arctic may contain as much as 412 billion barrels of oil equivalent (BOE), around 22 percent of the world's undiscovered energy resources. It also estimates that just one offshore basin east of Greenland could contain over 110 billion of barrels of oil, roughly 42 percent of Saudi Arabia's current proven reserves.

“The Battle for the New Frontier,” published in 2007 by the Oxford Institute for Energy Studies, went one step further, stating, "Russia's extractable offshore hydrocarbon resources are approximately 100 billion tonnes (about 740 billion BOE), 80 percent of which are located in the Arctic." To put that in perspective, as the Oxford Institute confirms, "If Moscow is successful in its bid for more Arctic territories, its hydrocarbon share could increase by at least 10 billion tonnes (74 BOE) or two-thirds of the global annual energy consumption." The Oxford Institute report concludes that whatever the Arctic's true potential, Russia will play a dominant role in Arctic gas, “accounting for three-quarters of peak production.”

There is no question that oil and gas will continue to fuel the world's economies for decades to come, and that the serious prospects lie in deepwater. As if Russia did not already control much of the world's hydrocarbon reserves, John Westwood, president of Douglas-Westwood, an energy consulting firm based in the U.K., predicts that when the dust settles over new deepwater discoveries, "Russia will control 60 percent of the acreage."

In 2001 Russia showed it wanted even more when it filed a claim that the 1,200-mile underwater Lomonosov Ridge, stretching from Siberia to Ellesmere Island in Canada, is an extension of the Siberian continental shelf. In August 2007, Russian explorer Artur Chilingarov followed up by planting a Russian flag on the seabed directly beneath the North Pole. The resultant world headlines said the stunt was predicated upon yet more Russian seismic surveys that they claimed further confirmed their rights over the ridge. While the U.N. Commission has repeatedly rejected the Russian seismological and sonar evidence, it is the increasing Russian military and civil presence in the region that is causing Russia's Arctic neighbors to express growing concern. Those concerns increased after Russia's military incursion into Georgia and Putin's blatant willingness to use energy supplies as a political weapon (as with the Ukraine two years ago).

All signs are that Putin may be prepared to let power, not international law, determine prospecting rights in the Arctic. Awash with petro-dollars, the Kremlin is investing heavily in military hardware and technology. Russia's navy has already resumed a military presence in the Mediterranean and the Atlantic. This followed the reinstatement of long-range strategic bomber flights over the Pacific, the Atlantic, and increasingly, the Arctic oceans. Norway has reported significant increased Russian air activity to the north. A senior U.S. coastguard commander warned in a September BBC interview of the risk of conflict in the Arctic unless international borders are resolved.

Russia’s nuclear icebreakers, far more powerful than the oil-fueled ships of NATO nations, already patrol much of the Arctic’s waterways. Russia has also reinstated its production line of icebreakers, suspended when the Soviet Union collapsed, and its Arctic fleet has been overhauled. This includes the introduction of an impressive new 25,000-ton icebreaker, Victory’s 50th Anniversary, launched in 2007 to commemorate Russia's victory in World War II. It has already undergone successful trials in the Barents Sea and in Arctic waters.

If any lingering doubts remained over Russia's aspirations and energy imperialism in the Arctic, President Dmitry Medvedev recently laid them to rest. In a passionate speech in September to Russia's Security Council, Medvedev said, "We must finalize and adopt a federal law on the southern border of Russia's Arctic zone." He added, "This is our responsibility, and simply our direct duty, to our descendants. We must surely, and for the long-term future, secure Russia's interests in the Arctic."

The response to all this has been at best piecemeal. A joint operation between the U.S. and Canada conducted this past summer aimed for the first time at extending their respective Arctic claims. Canada has initiated what it calls a “major military build-up in the north.” The Bush Administration urgently wants to formally sign on to the U.N. Convention, but lacks sufficient votes in Congress for ratification. Forays into the region by U.S. icebreakers have increased. In August 2007 Denmark launched an Arctic expedition to gather evidence to support its territorial claims.

In short, the response to increased Russian military and civil activity has been geared almost exclusively in support of Plan A – resolution via the U.N. Commission. The Big Four need to wake up to the need for a version of Russia's pro-active policy, one rooted in the old adage, “Possession is nine-tenths of the law.”

What If Hell Freezes Over?

Often missed in the Great Arctic Game is the fact that much of the Arctic Ocean is ice, not land. Thus it will be difficult to accurately map the tectonic plates and delineate new borders. This might make a round-table settlement, especially one that suits Russia, impossible. But other factors could impinge on how the game is concluded.

A report published by the E.U. in March expressed concern over the "international instability" that the "rapid melting of the Arctic" could cause. And the E.U. is seeking energy diversity to wean itself off reliance on Russian oil and gas imports. But the reports from the E.U. and the Oxford Institute are both predicated on the assumption that the Arctic ice thaw will continue. Recent climate data suggest that the world may actually be set for a new cooling period, or at least one in which warming may have “stalled,” as one leading BBC meteorologist recently put it. Further, in August predictions of an ice-free were confounded when NASA's Marshall Space Flight Center published photos showing what appears to be a 30 percent increase in Arctic ice between August 12, 2007 and August 11, 2008. If this and other data do foreshadow a cooling trend, deepwater energy extraction in warmer climes may prove a more attractive proposition.

Many experts believed the Arctic's resources would never be tapped, partly because of the horrendous cost involved. Just laying pipeline in Canada's Mackenzie Delta and in Alaska to exploit natural gas reserves costs around $2 million per mile. Laying pipelines in more northerly offshore deepwater areas is expected to cost around four to five times that figure. Even a resurgent Russian petro-dollar economy might balk at going solo on those figures, especially after recent huge oil price reductions.

Then there is the need for technological cooperation. Flexing one's military muscle to annex the North Pole de facto is one thing; having the proven technology to perform deepwater extraction in such a hostile environment is another. As the Oxford Institute paper points out, Norway's Statoil and Norsk Hydro have "unsurpassed expertise" in offshore drilling and the Anglo-American supermajors have "experience in extreme northern conditions." That means that the Russians will need help.

None of the above factors help settle the central issues of territorial and mineral rights, of course. But Canada, the U.S., Norway, and Denmark must consider a more coherent Plan B, one that does not simply lay all their cards on the U.N.’s green baize. The Kremlin has a good position in the Great Arctic Game. But geological bluffing over tectonics should not allow Putin the pretext to create “facts on the ground.” These are facts that could themselves fuel future conflicts.

Instigating their own Plan B may put the four NATO nations on thin ice with the U.N. But with bullish yet non-threatening actions they could help settle the Game and produce a peaceful albeit uneasy agreement in the bargain, something even a clear U.N. Directive on Arctic territorial claims may be unable to achieve. This might not resolve the Lomonosov Ridge issue, but at least it would mean all five nations reasonably and amicably could assume respective sovereign responsibility for land, mining, and, yes, conservation rights. After all, extracting up to a quarter of the world's untapped hydrocarbons in such a treacherous environment would soon focus minds on the cooperation that's vital on any new frontier.