Arctic Oil

From The Independent, a UK-based newspaper (article, by Michael McCarthy), an article about the new USGS report showing that the Arctic may hold up to one fifth of the world’s undiscovered but exploitable oil and gas reserves:

This includes 90 billion barrels of oil, enough to supply the world for three years at current consumption rates, or to supply America for 12, and 1,670 trillion cubic feet (tcf) of gas, which is equal to about a third of the world’s known gas reserves.

The significance of the report is that it puts firm figures for the first time on the hydrocarbon riches which the five countries surrounding the Arctic – the US, Russia, Canada, Norway and Denmark (through its dependency, Greenland) – have been eyeing up for several years.

Further on in the article:

The Arctic countries’ governments, on the other hand, see it as a massive opportunity, and are already positioning themselves to claim stakes in the seabed of the Arctic Ocean, if – as many climate scientists now believe will happen – it becomes ice-free in summer within a couple of decades.

Just a year ago, to much media fanfare, the Russians planted a flag on the seabed some 2.5 miles beneath the ice at the North Pole, and dispatched a nuclear-powered icebreaker to map a subsea link between the Pole and Siberia, as part of an effort to circumvent a UN convention limiting resource claims beyond 200 miles offshore.

Canada said earlier this month that it plans to counter the Russian overture with “a very strong claim” to Arctic exploration rights.

This week’s oil and gas study, carried out by the US Geological Survey, does not raise the national competitive stakes appreciably as it reveals that most of the reserves are lying close to the shore, within the territorial jurisdiction of the countries concerned. Much of the oil is off Alaska; much of the natural gas off the Russian coastline. There appear to be only small reserves under the unclaimed heart of the Arctic.

However, what the report does do is to indicate a very different future for one of the world’s last remaining pristine and utterly unspoilt regions. If the oil is there, countries which own it will be very likely to seek to extract it, whatever the environmental cost.

The race is on.  The USGS study is here, press release here.

Not to put too much of a damper on this, but maybe some mathematics is in order.  The Arctic, defined as the entire area above the Arctic Circle (latitude 66.56 N) covers roughly 1/6 of the earth.  That 1/6 of the earth, in an area that until recently has not seen oil and gas development on the scale of most of the lower lattitudes, might contain 1/5 of the undiscovered oil and gas strikes me as only slightly better than average.  Especially if you consider that 1/6 of the earth is in the Antarctic, which is off-limits to oil development and doesn’t count in the 1/5 estimate.

Not surprisingly, the report places most of the undiscovered oil off of Alaska (check out the recent lease bids for the Chukchi Sea Sale 193 last spring for an indication – the average bid was $965/acre and the highest bid was $18,496/acre, for land at the bottom of the Arctic Ocean), and most of the undiscovered gas off of Russia (Barents Sea, another leasing hot spot).

Additional news on this issue here.  For a different slant, try Mother Jones.

This entry was posted in Alaska, Arctic, Canada, Gas, Oil, Russia and tagged , , , , , . Bookmark the permalink.

One Response to Arctic Oil

  1. Pingback: USGS Report on Arctic Oil « Wilco 278

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