Tag Archives: Arctic minerals

Fish, Gas and Minerals: the Arctic

Mr Xi has been showing a growing interest in Arctic countries. In 2014 he revealed in a speech that China itself wanted to become a “polar great power”..,,In January 2018 the Chinese government published its first policy document outlining its Arctic strategy.

China is also keen to tap into the Arctic resources that will become easier to exploit as the ice cap retreats. They include fish, minerals, oil and gas. The region could hold a quarter of the world’s as-yet-undiscovered hydrocarbons, according to the United States Geological Survey. Chinese firms are interested in mining zinc, uranium and rare earths in Greenland.

As the ice melts, it may become more feasible for cargo ships to sail through Arctic waters. China is excited by this possibility (its media speak of an “ice silk road”). In the coming decades such routes could cut several thousand kilometres off journeys between Shanghai and Europe. Sending ships through the Arctic could also help to revive port cities in China’s north-eastern rustbelt… China is thinking of building ports and other infrastructure in the Arctic to facilitate shipping. State-linked firms in China talk of building an Arctic railway across Finland.

Chinese analysts believe that using Arctic routes would help China strategically, too. It could reduce the need to ship goods through the Malacca Strait, a choke-point connecting the Pacific and Indian oceans. Much of China’s global shipping passes through the strait. It worries endlessly about the strait’s vulnerability to blockade—for example, should war break out with America.

There are no heated territorial disputes in the Arctic, but there are sensitivities, including Canada’s claim to the North-West Passage, a trans-Arctic waterway that America regards as international—ie, belonging to no single state.

Plenty of non-Arctic countries, including European ones, have similar dreams. But China is “by far the outlier” in terms of the amount of money it has pledged or already poured into the region, says Marc Lanteigne of Massey University in New Zealand. Its biggest investments have been in Russia, including a gas plant that began operating in Siberia in December 2017. Russia was once deeply cynical about China’s intentions. But since the crisis in Ukraine it has had to look east for investment in its Arctic regions.

The interest shown by Chinese firms could be good news for many Arctic communities. Few other investors have shown themselves willing to stomach the high costs and slow pay-offs involved in developing the far north…. The main concern of Arctic countries is that China’s ambitions will result in a gradual rewiring of the region’s politics in ways that give China more influence in determining how the Arctic is managed. Greenland is a place to watch. Political elites there favour independence from Denmark but resist taking the plunge because the island’s economy is so dependent on Danish support. The prospect of Chinese investment could change that. Should Greenland become independent, China could use its clout there to help further its own interests at meetings of Arctic states, in the same way that it uses its influence over Cambodia and Laos to prevent the Association of South-East Asian Nations from criticising Chinese behaviour in their neighbourhood.

Excerpts from The Arctic: A Silk Road through Ice, Economist, Apr. 14, 2018, at 37

The Claim of Denmark on the Arctic

Arctic Ocean bathymetric features.  Image from wikipedia

In 2007 a Russian-led polar expedition, descending through the icy waters of the Arctic Ocean in a Mir submarine, planted a titanium Russian tricolour on the sea bed 4km (2.5 miles) beneath the North Pole… Over the next few years the Arctic Council (a talking shop for governments with territories inside the Arctic Circle, and others who attend as observers) became much more influential and one of the few remaining border disputes there (between Norway and Russia) was settled.

Now Denmark has staked a claim to the North Pole, too. On December 15th it said that, under the UN Convention on the Law of the Sea (UNCLOS), some 900,000 square kilometres of the Arctic Ocean north of Greenland belongs to it (Greenland is a self-governing part of Denmark). The timing was happenstance. Claims under UNCLOS have to be made within ten years of ratification—and the convention became law in Denmark on December 16th 2004. But its claim conflicts with those of Russia, which has filed its own case under UNCLOS, and (almost certainly) Canada, which plans to assert sovereignty over part of the polar continental shelf (see map).

The prize for these countries is the mineral wealth of the Arctic, which global warming may make more accessible. Temperatures in the region are rising at twice the rate of the rest of the Earth. According to the United States Geological Survey, the area has an eighth of the world’s untapped oil and perhaps a quarter of its gas….

The melting of the summer sea ice has also opened up trade routes between Asia and Europe via the top of the world; 71 cargo ships plied the north-east passage last summer, up from 46 in 2012. And trade requires rules. Moreover, under UNCLOS, most of the known energy and mineral reserves are within countries’ 200-nautical mile economic zones anyway. So everyone has an interest in minimising conflicts and amicably settling those that crop up.

But… in the summer of 2014 it carried out extensive combat exercises in the Arctic for the first time since the end of the cold war. It is re-equipping old Soviet bases there and in July tested the first of its new-generation rockets, called the Angara, from a cosmodrome in the high north. Sweden spent part of the summer searching for a Russian submarine that it suspected of slipping into its territorial waters.

Denmark’s claim will test whether Russia is willing to stick to the rules in the Arctic. It is based on a provision of the law of the sea which says countries may control an area of seabed if they can show it is an extension of their continental shelf. (Denmark argues that the Lomonosov ridge, which bisects the Arctic, starts in Greenland.) All Arctic countries, Russia included, have promised to respect this law.

Excerpts, The Arctic: Frozen conflict, Economist, Dec. 20, 2014, at 89

Suspected Imperialists: China in the North Pole

Northern Sea Route (blue) vs Southern Sea Route (red). Image from wikipedia

China is interested in the Arctic. On July 11th, 2014 its icebreaker, Xue Long (“Snow Dragon”), embarked on the country’s sixth Arctic expedition, with 65 scientists on board. A new 1.3 billion yuan ($210m) icebreaker will soon be launched, and last December  [2013] a China-Nordic research centre was opened in Shanghai.

New freight opportunities interest China along the Northern Sea Route (NSR) as ice recedes. In 2010 four ships took the route. Last summer 71 vessels did so. Each ship that takes the route must, at certain points, be accompanied by an ice-breaker, so it is unclear how soon the NSR will be suitable for mass transit, if at all.

Some climate models predict the Arctic Ocean could be ice-free in summer by the middle of this century. The route cuts the distance between Rotterdam and Shanghai by 22% and Yang Huigen of the Polar Research Institute of China has predicted that 5-15% of China’s international trade will use the NSR by 2020. But Linda Jakobson, of the US Studies Centre at the University of Sydney, says that is a “rather optimistic assessment” and that talk of the NSR as a new Suez Canal is overblown. Weather conditions and environmental sensitivities will make the route a difficult one.

As for energy, China is one of the biggest investors in mining in Greenland. A deal with Rosneft, a state-controlled Russian company, will explore offshore Arctic fields for oil. But the undersea resources in the Arctic are largely within the Exclusive Economic Zones of the littoral states (notably Russia), so if China wants to look for energy it will have to do so jointly…

But the new Chinese presence is not without concerns. Huang Nubo, a tycoon, recently bought 100 hectares (250 acres) of land in northern Norway and has bid for a plot on the island of Svalbard, where China has a research station. He aims to develop a resort for Chinese tourists. Mr Huang had similar plans in Iceland in 2011, but local protests quashed them. A Norwegian newspaper has called him a “suspected imperialist”.

China and the Arctic: Polar bearings, Economist, July 12, 2014, at 39

See also Arctic Council

Arctic Council: why China, Japan, and the EU Hope to Join

“The Arctic is hot,” says Gustaf Lind, the Swedish ambassador who will chair the Arctic Council meeting in Stockholm on March 28th-29th. The other members are America, Canada, Denmark, Finland, Iceland, Norway and Russia, plus six non-voting representatives of indigenous Arctic peoples such as Sami and Inuit.   he top of the world is warming roughly twice as fast as the rest of it: water in the Fram Strait, between Greenland and Norway’s Svalbard archipelago, is roughly 3.5°C warmer than a century ago. When dark, absorptive seawater replaces bright, reflective ice, it retains more heat. That speeds global warming. Largely as a result, the Arctic now has less sea-ice, for the time of year, than for millennia. Most scientists expect the Arctic Ocean to begin to be largely ice-free in summer sometime between 2020 and 2050.

As the ice retreats, rich Arctic deposits of oil, gas and other minerals become accessible. High commodity prices make them lucrative. The US Geological Survey estimates that the Arctic has around a quarter of the world’s undiscovered and recoverable oil and gas reserves.

New commercial trans-Arctic shipping routes will sharply cut the distance between Europe and Asia. In 2011 a Russian supertanker, aided by two nuclear icebreakers, became the first such vessel to traverse the North-east Passage across the Arctic, hugging the Siberian coastline (Russians call it the “northern route”). Countries that ply global trade lanes, and make the ships that do, see the potential. China, South Korea, Japan and Singapore, plus Italy, have applied to join the Arctic Council as observers; so has the European Union.

That, too, has generated some heat. A Norwegian newspaper reported in January that Norway was threatening to block China’s bid for observer status, part of a row that started when the Oslo-based Nobel prize committee awarded the 2010 peace prize to a jailed Chinese dissident, Liu Xiaobo. All sides deny that (and Norway, like the other Nordic countries, is generally an enthusiast for enlargement). But officials in Oslo are not the only ones with mixed feelings about Chinese membership. Russia, which owns half the Arctic coastline and the lion’s share of the region’s resources, is also reluctant. Canada, which displays distinctive robustness on Arctic issues, is not minded to admit the EU, which tiresomely bemoans the annual seal slaughter.

Sweden says it wants to settle the observer issue by May 2013. The ostensible ground for delay is over the newcomers’ role. But it already seems that this will be limited to watching and listening—as it is for the six existing observers: countries like Britain and Poland with long traditions of Arctic activity. No Arctic country is in a hurry to expand the club. Despite excited predictions of a dangerous scramble for Arctic resources, the region’s sovereignty is fairly clearly defined. The Arctic is the polar opposite of Antarctica, figuratively as well as literally. It is not a disputed land mass surrounded by ocean. It is an ocean plus some almost entirely delimited land. It has no need of an international treaty like the one that governs Antarctica.

A handful of disputes rumble on: about a few rocks located between Greenland (a Danish fief) and Canada; and between Canada and America over the status of the North-west Passage shipping route. A bigger row could yet erupt over continental shelves, most of which are being slowly delimited under the UN’s Convention on the Law of the Sea. But all these squabbles are between the Arctic countries themselves, not with outsiders.

The members think their club is working rather well as it is. Founded in 1996, partly to promote joint scientific research, it focuses on activities such as pollution, marine conservation and mapping. It does this well. Last year members signed their first legally binding agreement, on search-and-rescue missions. Next will be a deal on responding to oil spills. Russia, which caused a flurry of concern in 2007, when an explorer called Artur Chilingarov planted his country’s flag under the North Pole, is now oozing amity. In 2011 it ended one of the Arctic’s longest-running disputes, by reaching agreement over its maritime border with Norway.

Reassured that they have little to squabble over, Arctic countries are finding that the enormous costs of research, policing and energy exploration are better shared. Hence, for example, the eagerness of Russia’s state-owned energy companies to form joint ventures, such as that agreed last year between Rosneft and Exxon Mobil in the Kara Sea. The development of Arctic shipping-lanes will also be made easier with good regional relations: there is talk of either Iceland or Norway developing a transshipment port to serve Russia’s north-eastern route.

The message is clear: welcome to the new world of the warming Arctic. But remember who runs it.

Arctic Politics: Cosy amid the thaw, Economist, March 24,2012, at 61