Russia leads race for North Pole oil

The Arctic’s untapped resources include huge reserves of fuel and
minerals. Now Moscow has raised tensions by dispatching an expedition
to annex a vast expanse of the ocean.

Jamie Doward, Robin McKie and Tom Parfitt
Sunday July 29, 2007
The Observer

In the darkest depths of the Arctic Ocean a new Cold War is brewing.
American and British nuclear submarines lurk in the shadows, preparing
for company.
‘Why has Britain been sending submarines into Arctic waters?’ asked Rob
Huebert, associate director of the Centre for Military and Strategic
Studies in Calgary. ‘Because it wants to retain its capability to deal
with the Russian threat.’

Such talk is redolent of a Le Carré novel. But the battle between the
West and Russia over who owns the Arctic has been building for years.
Last week it entered a new phase when Russia announced it was sending a
miniature submarine, equipped with a team of explorers, to claim a
chunk of the Arctic Ocean the size of Western Europe.

The stakes are high. The ocean is home to vast oil and mineral reserves
as well as massive shoals of fish and strategically important shipping
lanes. ‘It could get very ugly,’ Huebert said. ‘Nobody knows how much
oil and gas is down there. Shell, for example, is quite pessimistic,
but the likes of Exxon are quite gung-ho. I’ve seen some people make
the case that up to 18 per cent of the world’s oil reserves are there –
that’s getting into Saudi Arabia’s league.’
To symbolise its claim, Russia will plant its flag on the sea bed
before taking samples it believes will prove the Lomonosov Ridge, which
runs underneath the Arctic Ocean, is an extension of the Siberian
continental shelf and therefore Russian territory.

The expedition is led by Artur Chilingarov, Russia’s most famous
explorer. A sturdy 68-year-old with a sweeping salt-and-pepper beard,
last week he could be seen pacing the decks of his ship, the Akademik
Fyodorov, followed by a posse of state television journalists who filed
breathless accounts of the groundbreaking voyage.

‘The Arctic is Russian,’ Chilingarov told the media scrum. ‘We must
prove the North Pole is an extension of the Russian coastal shelf. Of
course, [the expedition] is important in terms of science, but also in
terms of geopolitics as well.’

There has never been a manned journey to the sea bed of the North Pole.
‘Who knows, we may even discover some as yet unknown organism,’ said
Valery Kuznetsov, head of the expedition’s oceanography team.

In 2001, Russia made a similar claim to the Arctic Ocean but its
evidence was disputed. An official panel of experts backed by the UN
has been established to consider claims and Russia is determined to
prove its case. A UN convention dictates that countries bordering the
Arctic Ocean can exploit resources within a 200-nautical-mile economic
zone of their territory. But this can be extended if a country can, as
the Russians are attempting, prove the continental shelf beneath the
ocean is connected to their land.

So far the US has refused to engage in the debate over extending
exploitation rights, a policy throwback to the Eighties when the Reagan
administration feared such an action would see large parts of the
Arctic handed over to the Soviets.

Meanwhile, Canada and Denmark, through its sovereignty over Greenland,
claim that the Lomonosov Ridge is connected to their territories and
therefore the ocean is effectively their property. In a sign of how
tense the situation is becoming, the Canadian government recently
placed a C$7bn (£3.25bn) order for new naval patrol vessels, a move
that Prime Minister Stephen Harper said was designed to ‘defend its
sovereignty over the Arctic’.

But the battle for the Arctic is fast becoming a global issue. Melting
ice has meant the opening up of the North West Passage to commercial
shipping is now possible in the summer months and, given rising
temperatures, a possibility all year round in the future. The opening
up of the passage can shorten the distance ships have to travel between
Europe and Asia by up to 2,000 nautical miles over the established
trade route through the Panama Canal.

Given the area’s geopolitical importance, it is no surprise Britain is
closely monitoring the situation as part of its commitment to Nato.
‘Britain has been sending Trafalgar SSN-class submarines to the Arctic
since 1986 because it wants to retain its under-ice capability,’ said
Huebert, who predicted it would not be long before their sonar
registers the presence of an old foe. ‘The Russians are rebuilding
their navy,’ Huebert said. ‘They’ve just launched a submarine for the
first time since 1987 and they’ve placed orders for three more.’

Soaring oil prices have created a new urgency among the countries
competing to make their claim. When oil prices were low it was
considered uneconomic to tap into the Arctic Ocean’s reserves. But with
China and India now desperate for energy, oil prices are spiralling.
Experts say oil prices of around $70 a barrel makes drilling in the
Arctic a viable proposition. In 2004, a joint Swedish and Russian
venture proved it was possible to drill into the ocean’s floor from a
rig secured by three ships.

Nor is oil the only resource that is ripe for exploitation in the
thawing north. There are also large mineral deposits and coal beds in
the Arctic, for example. In addition, there is the prospect of opening
up vast new fish reserves as ice cover disappears over the Arctic
Ocean. For several years, British research vessels from Dunstaffnage
Marine Research Station, near Oban, have been studying these stocks.

‘There is strong evidence that there are still good reserves of fish
such as cod and capelin in some regions of the Arctic,’ said Prof
Graham Shimmield, Dunstaffnage’s director. ‘However, these are probably
the world’s last refuges. We should restrain ourselves from catching
them on an industrial scale until we learn more about how strong they
are. It remains to be seen whether that will happen, however.’

The rush to exploit the Arctic worries other scientists. They point out
that the region is important because the effects of climate change are
more pronounced here, and arrive earlier, than in any other part of the
world. When things go wrong, they are first noticed in the Arctic. But
if oil companies and mining firms start pumping out carbon dioxide and
other waste as they open up the region, the pristine conditions that
have helped scientists make past observations will be destroyed,
obscuring our view of our dangerously warming world.

This problem is already an issue in the archipelago of Svalbard where
European scientists are studying glacier retreat, carbon emissions and
other effects of pollution, but are having their work hampered by the
emissions from coal mines dug by the Russians.

Tensions are already running high in the Arctic, it would seem.
Nevertheless, hopes remain that a diplomatic conclusion can be achieved
to resolve what has been dubbed the ‘battle for the North Pole’.

‘We must wake up to the fact that the Arctic is going to become a much
busier area,’ Huebert said. ‘And try to produce a solution that will
provide an equitable, fair and safe division of resources. We cannot
just proceed with the old unilateral approach.’

Observers point to the Antarctic Treaty, which severely limits the
exploitation of the land mass around the South Pole. No waste disposal,
no mining, no introduction of animal species and no commercial work
have been allowed on the continent for more than 40 years. Some
diplomats have suggested that a similar set of rules could be agreed
for the Arctic. Such a plan is unlikely to succeed, however. ‘Countries
agreed to the Antarctic Treaty as a way to save money,’ said a senior
UK official. ‘The South Pole is an expensive place to exploit and it
was realised that if everyone agreed not to touch it, they could all
rest easy about pouring millions into the area. This is not the issue
with the Arctic. It is becoming easier and easier to exploit. Nations
aren’t going to give up on these rich pickings.

Hence the Russian expedition – although this has not gone totally
smoothly so far. Last week the Akademik Fyodorov was forced to send out
a distress signal and then drifted for several hours because of an
engine failure. It has since made good progress towards the pole and
the first research dives from the ship are expected to take place
tomorrow.

During its journey last week a mysterious aircraft appeared above the
Akademik Fyodorov, causing a ripple of excitement among the journalists
on board. Russian media widely reported the aircraft to be a Nato spy
plane. It may have been paranoia but in the frozen waters around the
North Pole one thing is certain: the days of the Cold War are back.