Arctic Oil - The Final Frontier

Natural resources in the Arctic could play a vital part in global energy production and particularly in petroleum. A study by the United States Geological Survey in 2012 estimated around 66 billion barrels of oil and 240,000 billion feet of cubic gas (USGS, 2012). To put this in context, global consumption of oil in 2012 was 89 million barrels a day (EIA website) which means that the Arctic oil reserves alone could supply entire global for 2-3 years.

Who owns the Arctic: who owns the resources?

The Arctic is an ice shelf (not continental shelf like Antarctica) therefore it is governed by the Law of the Sea (United Nations, 1892). The waters around it are divided up between countries which have a shoreline in the Arctic ocean and countries can claim the right to water and any resource deposits up to 200 nautical miles of the coastline of the Arctic (Popular Mechanics). The map below shows the territorial claims in 2012. So now we know roughly who owes which area of the Arctic Ocean and that there are significant oil and gas deposits. So why haven't countries been exploiting these already? 

Arctic Territory Claims 2012 - NOAA, Arctic Strategy, 2011

What are the challenges in extracting resources?

• Climate - low temperatures, long periods of total darkness and challenging topography. The extreme climate will effect equipment, personnel and therefore the efficiency of the process. This is largely linked to tolerance levels for electronic equipment and cement structure in the well (Villar et al, 2000) 
• Infrastructure - there is presently very limited infrastructure or supply chains which would be required for oil and gas extraction. This adds to the cost of the process and environmental risks. For example the nearest back-up clean up equipment for American projects would be 2000 miles away in Seattle (Forbes, 2011). 
• Competition - the recent boom in natural gas from fracking operations is currently a much cheaper alternative to businesses. Both America and Russia are investing heavily into gas exploitation at the moment therefore less investment in Arctic Oil exploration (EY Arctic Report 2012)
• Spills - containment and recovery from oil spills is a unknown factor in Arctic conditions. Boxall 2012 argues that a spill is inevitable and that the potential effects on the local environment could effect global climate and food chains. The lower temperature also reduces bacterial activity therefore the oil from the spill would remain for a much longer time. 

The underlying theme to all these challenge is the climate of the Arctic. Reduction in summer sea level ice in the Arctic over the last few decades is now raising concerns about a potential 'resource rush'. Earlier this year the United Nations Environment Programme stated in the UN Yearbook 2013 that the Arctic needs better protection. 

"The rush to exploit these vast untapped reserves have consequences that must be carefully thought through by countries everywhere, given the global impacts and issues at stake."

Achim Steiner, UNEP Executive Director (Reuters, February 2013)

Ellis et al 2011 discusses human influence on the environment and the impacts it can have. The potential loss of species diversity and change to natural environment are definitely a concern for the Arctic. The impacts of change to this environment could have huge influence on global climate, ecosystems and food chains so it is vital we manage the resources in this area with great care.