Sunday, August 3, 2008

The cold rush

The Age, Marian Wilkinson 
August 4, 2008

WHEN we arrived at the tiny community of Resolute Bay in the Arctic, the sea ice had trapped the local residents. It was too thick to take boats out to the Canadian Coast Guard icebreaker but too thin to drive over it in a snow mobile.

Forty years ago at Resolute Bay, protesting Inuit hunters went out on the sea ice in dog sleds and stopped an ice-strengthened US oil tanker, the SS Manhattan, which was exploring a commercial route through the Northwest Passage. The sea ice, not the Inuit, defeated the oil company. It abandoned the Northwest Passage and conceded the overland Alaska pipeline was the only way to ship oil south.

Late last summer, the sea ice here virtually disappeared. And with advancing climate change in the Arctic, both the local Inuit and scientists are again hearing talk about the Northwest Passage that could ship the oil wealth from the north to an energy-hungry world.

Stretches of the passage are not even properly charted but global shipping conferences are seriously discussing a summer route through the Arctic. It's not just one passage: it could be a Northwest Passage through Canada, a Northeast Passage past Russia or even one straight across the North Pole.

"The Northwest Passage is actually passages, there's more than one," explained Scott Borgerson, a former Lieutenant Commander in the US Coast Guard who is now with the US Council on Foreign Relations. "For the shipping routes, what's at stake is potentially an incredible shortcut between the North Atlantic and the North Pacific that is many thousands of miles shorter than going through either the Suez or Panama canals."

By some estimates, the new shipping routes could cut 8000 kilometres or up to 40% off the distance from journeys between Europe and Asia. A new Arctic route would force competitive shipping charges on both the Suez and Panama canals and save companies millions of dollars, Borgerson told The Age.

The debate over the Northwest Passage is becoming supercharged with the realisation that the Arctic is a treasure trove of natural resources, oil, gas and coal - the very fossil fuels, ironically, contributing to global warming.

The US Geological Survey last month released a long-awaited report on that treasure. It found the area north of the Arctic Circle has an estimated 22% of the world's undiscovered energy resources, including 13% of the world's undiscovered oil - or 90 billion barrels - and 30% of its undiscovered natural gas.

"The extensive Arctic continental shelves may constitute, geographically, the largest unexplored prospective area for petroleum mining remaining on Earth," the report concludes.

How the rich, vast continental shelves will be carved up is now high on the agenda of the five Arctic powers: Canada, Russia, the US, Norway and Denmark. For now they only have rights to the resources within their "exclusive economic zones", up to 300 kilometres offshore. But they are preparing their cases for the United Nations, arguing for rights over millions of square kilometres of the shelves beneath the Arctic Ocean.

The new "Cold Rush", as it's being called, took off last year when Russian scientists sailed a submarine to the North Pole and planted a flag on the seabed. They returned home to a heroes' welcome.

"It was a stunt," says Dr Jacob Verhoef, a leading geological surveyor with the Canadian Government. But that stunt helped Verhoef secure an extra $35 million to map Canada's huge continental shelf, which he thinks could extend up to 1 million square kilometres under the Arctic. "It raised the profile of the program there's no doubt about it," he says.

We caught up with Verhoef in Resolute Bay where he was meeting the captain of the Canadian ice-breaker, the Louis S. St Laurent. The Louis is taking Verhoef and a team close to the North Pole this month in a joint operation with the US - the first time the two nations have co-operated on a mapping project aimed at extending their claims over the Arctic.

Only last year, as the sea ice retreated to record levels, tensions flared between the US and Canada over the Northwest Passage. President George Bush publicly disputed Prime Minister Stephen Harper's claim that Canada has sovereignty over the passage. The US, along with Europe, believes that if the Northwest Passage is opening up, it should be classed as an international strait for shipping. The Canadians were not impressed, especially as the US has yet to even ratify the UN's Law of the Sea Convention.

Canada claims the passage is part of its internal waters and Harper is bolstering the military presence in the north, setting up a new Arctic warfare centre and a deep-water port. He warned Canadians they would have to "use it or lose it" if they wanted to keep control of the Canadian Arctic.

In March this year, a high-level European Union report on climate change and international security warned the rapid melting of the Arctic, the opening of the Northwest Passage and increased access to oil and gas had "potential consequences for international stability and European security interests". And it strongly criticised the planting of the Russian flag on the North Pole.

In an effort to quash allegations the Arctic powers are in a "wild west rush" to exploit the region, the five Arctic powers met in Greenland in May promising to abide by the UN process.

"The five nations have now declared that they will follow the rules. We have, hopefully, quelled all myths about a race for the North Pole once and for all," Danish Foreign Minister Per Stig Moller told reporters.

But Borgerson is not convinced. "I think you could say almost all of this is about the various Arctic states trying to carve up the Arctic pie to get the largest slice for themselves," he says. "I think some of that diplomatic rhetoric is really to try and keep others out - to keep NATO out, to keep the EU out."

Environmentalists are also deeply concerned. They fear the new Cold Rush will not only release more fossil fuels and more carbon dioxide into the atmosphere but also put the fragile Arctic zones in danger. Even before the new claims are dealt with at the UN, the Arctic powers are exploiting more and more oil and gas leases in their existing waters.

In February, the Shell Oil company bid $US2.1 billion ($A2.2 billion) to secure rights to 275 new leases in the Chukchi Sea in North-West Alaska in a sale condemned by environmental groups and local Inuit, despite assurances by the US and the companies there would be no threat to the environment.

The sale came just ahead of US Interior Secretary Dirk Kempthorne, agreeing to list the polar bear in America as an endangered species. He cited the shrinking sea ice as the reason saying the bear population could collapse within decades.

But Kempthorne insisted the listing of the polar bear would not halt oil and gas development in Alaska. "I want to make clear that this listing will not stop global climate change or prevent any sea ice form melting. Any real solution requires action form all major economies for it to be effective," he said.

WWF's Alaska head, Margaret Williams, who watched the oil companies bidding for the new leases in the Chukchi Sea, was dismayed as once pristine waters were parcelled out for exploration. "There's so many threats which can accumulate in that kind of ocean environment and to add it on top of climate change is just a deeply misguided policy," she says.

"It's really a mistake to go in now and not to mention, it's a double whammy. We're talking about adding more CO2 to the environment when it's the very source of the problems we're seeing in the Arctic."

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