The Quest for Arctic Oil

ISN Security Watch, a product of the International Relations and Security Network, reported August 14 that a newly released assessment of oil and gas reserves in the Arctic is likely to renew territorial claims to the region by several countries.

In "Hot issues in the Arctic," Carolin Hilpert writes that US Geological Survey estimates put technically recoverable oil resources in the Arctic at around 90 billion barrels. If that number holds true, Hilpert says, "...the find would account for roughly 13 percent of undiscovered oil in the world - enough to meet worldwide supply for the next three years (at current consumption rates)." Additionally, Hilpert writes, the assessment estimates that the Arctic is also home to about 30 percent of the planet's yet to be discovered natural gas reserves.

Countries interested in laying claim to potential Arctic energy reserves include the United States, Russia, and Canada, as well as the European nations of Denmark and Norway. According to Hilpert, estimates are now able to be made on the Arctic reserves because global warming has caused enough Arctic ice to melt to make geological surveys more feasible, and thus energy reserves more accessible.

And, of course, newly accessible energy fields are going to be in high demand, especially given the current record prices for energy resources. Still, Hilpert warns, given the environmental conditions prevalent in the Arctic, drilling for oil and natural gas reserves will be an expensive proposition. If current global pricing for oil begins to decline, Hilpert says, interest in the new fields may decline as cost-benefit analyses are conducted.

Russia has long had a claim on Arctic territory, but that claim has not been recognized by other nations, especially those interested in the Arctic's potential energy resources. The United Nations provides legal guidelines for the Arctic in its UN Convention on the Law of the Seas. Hilpert writes that the convention provides economic rights for countries bordering the Arctic by granting territorial control for those nations up to 200 nautical miles from their coasts. Of the countries previously reported as having an interest in the Arctic's energy reserves, only the United States has failed to adopt the United Nations Convention on the Law of the Seas.

And while Russia has dismissed questions about its claim on the Arctic, Hilpert writes that what Russia is actually doing, with its reclaiming of the area last year, is putting the UN convention to the test.