In what would be a boon to the Russian economy, BP Chief Executive Tony Hayway announced that his company is interested in drilling for oil and gas in the Russian Arctic. BP is already one of the largest foreign investors in Russia, while operations there account for 20% of BP’s worldwide oil and gas production. BP’s profits from the world’s largest natural gas exporter and second largest oil exporter come mainly through its 50% share of TNK-BP. TNK-BP is a Russian oil company which operates primarily in western Siberia and the Volga-Urals region. In 2008, TNK-BP had over $4.1 billion in capital assets in Russia.

Today, during his speech to the Academy of National Economy in Moscow, Hayway said,

Developing the Russian Arctic, for example, requires an industry which can provide innovative solutions to manage risk and overcome technological challenges.

This is already happening in remote onshore Arctic areas such as the giant Russkoe oilfield which was discovered 40 years ago, but has not yet been developed as the oil is highly viscous, the geology complicated and the location remote. Drawing on expertise from BP, TNK-BP has now successfully drilled test wells. The plans are to employ a thermal recovery technique using hot water and steam, along with the construction of infrastructure that includes a gas-fired power plant and new access roads.

BP has also been very active in the offshore Arctic regions, which represent an important new frontier for the industry. We have worked for decades in areas such as the North Slope of Alaska, the Canadian Arctic and Northern Norway. Last year, we conducted a seismic survey in the Canadian Beaufort Sea, which was the most northerly ever carried out. Despite the challenging conditions, we carried out the operation without any injuries, accidents or harm to the environment.

Building on this expertise, we would certainly welcome the opportunity to deploy our technology and skills to explore and produce Arctic resources in Russia as well.

BP has worked in the Arctic since 1969, so it’s no surprise that it would want to expand its operations in the Russian Arctic. The company recently took over a drilling rig in the Arctic from Norwegian company StatoilHydro, demonstrating that it is indeed serious about drilling in the Arctic within every country’s borders, whether Norway, the U.S., or Russia. BP also hopes to emphasize cutting-edge technology as it drills for oil and gas and to help Russia’s economy diversify, such as by building a better supply chain for industry. Whether all this talk of diversification - something that both Medvedev and Hayway have championed - will actually have visible results has yet to be seen.

Links
“BP in the Arctic and Beyond” (PDF)
“BP offers technology, expertise to develop Russia’s Arctic assets,” RIA Novosti
“BP takes over Arctic drilling rig from StatoilHydro,” Barents Observer

Michael Byers, a professor of political science at the University of British Columbia and prominent researcher on the Arctic, has recently come out with a book entitled Who Owns the Arctic. This short, opinionated overview of Arctic issues encompasses a range of contentious topics such as sovereignty, which the title references. Perhaps of most importance to Canadian readers, Byers discusses what should be done with the Northwest Passage, which Canada claims as internal waters while other countries, notably the U.S., believe that it constitutes international straits. He believes that Canada should convince other countries to support its position so that the country can pass laws to protect its own people and environment in the vicinity of the passage. If the straits were international waters, no such laws could be passed. One way to convince other countries like the U.S. that Canada is serious about protecting the straits is to start building three to four lightly armed icebreakers.

In addition, Byers argues that his country’s government should work more closely with the Inuit when dealing in the Arctic. They are also the country’s strongest claim to sovereignty over the High North, having lived there for thousands of years. Rising temperatures, Russian policy in the Arctic, and oil and gas are other issues analyzed in the book’s pages.

The Globe & Mail gives a glowing review of the book here. You can purchase it in Canada already, and the book will be available through US retailers like Amazon.com on March 1. Hopefully I’ll be able to read it in a couple of months, then, and offer my own review of the book.

(Yes, yes, he works for MI6.)

The CIA is restarting a mission squashed during the Bush administration’s early days: sharing satellite imagery of the Arctic ice cap with climate researchers. From 1992 to 2001, scientists involved with the Medea program (Measurements of Earth Data for Environmental Analysis), spearheaded by former Vice President Al Gore, tried to see if any classified intelligence could be used for environmental analysis. Gore successfully convinced CIA head Robert Gates to begin the program. Now that Gates is back in a prominent political role as Secretary of Defense and Gore has successfully won Congress’ approval, the program is back in action. Still, the images have been slightly blurred to hide the actual capacities of the reconnaissance satellites. About 60 scientists have access to the imagery, and all have security clearances.

While there has been some opposition to using intelligence and defense resources for scientific and environmental purposes from the right, with Senator John Barrasso (R-Wyo.), saying that the CIA should be “combating terrorists, not spying on sea lions,” Medea seems to be an efficient use of government resources. (Note: sea lions are rarely spotted in the Arctic). Terrorists aren’t hiding in the melting ice cap, so the imagery itself isn’t necessarily sensitive. Satellites fly over the North Pole on a daily basis, so someone might as well look at the photos already being taken to see if they can be put to good use. And, if climate change is regarded as a national security threat, as the Pentagon and CIA are likely to do, the government might as well attempt to get the ball rolling with scientists understanding how global warming is affecting the Arctic. In fact, in October, the CIA set up the new Center for the Study of Climate Change, so the efforts of scientists and intelligence analysts seem to be dovetailing nicely.

News Links

“CIA Revives Data-Sharing Program with Environmental Scientists,” NY Times

“The CIA and the Pentagon Declare War on Climate Change,” OnEarth

The small border between Norway and Russia all the way up in the high north has been Russia’s most stable border for the past 1,000 years. Now, that border may disappear, in a sense, as Norway and Russia consider doing away with visas for residents. Right before the annual meeting of the Confederation of Norwegian Enterprise (NHO), which begins today, the Prime Minister of Norway, Jonas Gahr Støre, noted that he hopes an agreement will be forthcoming later this year. The agreement would affect people living within 30 kilometers of the border: that is, 55,000 Russians and 9,000 Norwegians. The county of Finnmark in northern Norway is suffering from a lack of labor, and it is hoped that visa-free travel could help to shore up the labor deficit by allowing Russians to work.

News Links

“Agreement on visa-free border coming [ready] in 2010,” Barents Observer

“Grenseboerbevis i løpet av 2010,” Finnmarken (in Norwegian)

A Canadian joint review panel has endorsed the Mackenzie Valley Pipeline, which has been in the works for years — yet there are still many obstacles in its way. Estimated to cost $16.2-billion, the pipeline is supposed to transport natural gas from the Beaufort Sea to northern Alberta. But not all of Canada supports the project. The 1220-km pipeline would cross over aboriginal land, so the project’s backers - a consortium which consists of  Imperial Oil, The Aboriginal Pipeline Group, ConocoPhillips Canada, Shell Canada and ExxonMobil Canada, must receive the support of the indigenous people. Many environmental groups like the Sierra Club and WWF also oppose the pipeline. Other federal agencies must also approve the pipeline before it can go ahead.

Then, there is the problem of financing. The pipeline was conceived of as being entirely privately financed, yet with its hefty price tag, it’s looking like federal aid may be necessary. The oil consortium is emphasizing the economic benefits which the project would bring to Canada’s North. But right now, the price of natural gas is low, while the pipeline’s capital costs would be high, making the project look unfavorable.

Whether or not the pipeline can get built soon also depends on the success of TransCanada and Exxon Mobil’s nearby Alaska pipeline, on which construction is scheduled to begin in June 10. If this project is finished as hoped in 2018, then the need for the MVP could be mitigated, delaying it even further - and perhaps turning the MVP into nothing but a pipe dream.

News Links

“Canadian Board Approves Western Gas Pipeline,” New York Times

“Mackenzie Pipeline saga to drag on despite Joint Review Panel approval,” The Canadian Press

“Federal help urged to help save pipeline,” Edmonton Sun

The Anchorage Daily News has an interesting story on polar bear research in the Arctic. This fall, scientists from the University of Alaska Fairbanks on board the US Coast Guard Cutter Polar Sea, one of the world’s most powerful icebreakers, researched how melting sea ice is affecting polar bears. These animals rely on sea ice as hunting platforms. Though they are powerful swimmers, polar bears cannot swim for long stretches without recuperating on a sturdy, floating piece of ice. As the ice cap recedes, however, the bears are finding it harder and harder to hunt seals, which constitute their main diet. As top predators in the Arctic food chain, declining polar bear populations will have an effect on the rest of the food web, which is exactly what the researchers were studying.

Scientists obtaining data from a collared polar bear. © US Coast Guard

In the winter, most of the Arctic Sea freezes over, which makes it easy for polar bears to hunt. Yet during the summer - particularly this past summer, when the ice pack only began 200 miles away from the north coast of Alaska - polar bears must decide to either stay on land or on the ice pack. However, if the bears remain on the pack, there aren’t too many seals 200 miles from shore, where the waters are less dense in nutrients, so they can starve.

Diver collecting ice samples. © US Coast Guard

Scientists had collared 11 polar bears in the spring for study, but due to thin, fragile ice, conditions allowed them to only recapture four. Thus, melting ice is ironically affecting science as well. Researchers were able to dive underwater to study the animal life in the frigid waters of the Arctic. You can view some photos from the dives here, on the ADN’s website. Data from the study is still being analyzed with the help of researchers from the University of Wyoming and the U.S. Fish & Wildlife Service, so it will be a while before any results are published.

For more information, the Coast Guard also put up a website with journal entries, photographs, and biographies of scientists on board the ship.

Overview:

At the beginning of the year, the Arctic 5 were rolling out strategies to enhance their regional military power. Concerns over sovereignty weighed on the minds of policymakers, with Russia and Canada coming to diplomatic blows over the flights of Russian fighter jets a few hundred miles outside Canadian airspace. Yet aggression gave way to diplomacy, in part due to the economic benefits of cooperation rather than expensive armed conflict. Energy developments also dominated much of the news, with all five Arctic states hoping to profit from oil and gas drilling in the Arctic Circle. The U.S. Department of the Interior recently gave Shell the go-ahead to drill exploratory wells in the Chukchi Sea, while the Russian government sought foreign investors for natural gas projects in Yamal. Indigenous peoples made the news as well. The Inuit protested choices made by the state governments in Canada and the United States, whether over the naming of a passage or over drilling. Greenland voted for even greater autonomy from Denmark. The Nenets people in Russia found less success in making their voices heard, yet still drew headlines for their protests of gas development. Thus, events in 2009 once again proved that the Arctic, though inhospitable to most, is still home to thousands of people and pristine wildlife whose interests must be considered in deliberations over problems in the Arctic.

Person of the Year:

Foreign Minister Cannon.

Canadian Foreign Minister Lawrence Cannon, who this year uttered such famous quotes as, “[Canada] will not be bullied,” and “There is surprisingly little disagreement over land and sea claims in the Arctic region,” is the Arctic Blog’s person of the year. He vocalized Canada’s attempts at solidifying their Arctic sovereignty while trying to remain diplomatic.

Most Unexpected Event:

The finance ministers of the G7, frequent visitors of warm and tropical resort locations, announced that they will convene in Nunavut next February.

What to Watch for in 2010:

While at the beginning of 2009, military tensions were heating up between the Arctic states (particularly Canada and Russia), next year, we can expect to see the Arctic states attempt to resolve issues diplomatically. There may be some continued militarization efforts: Russia, for instance, is planning to begin construction of the first of its new icebreakers next year. Senate Bill 2840 regarding the construction of a deep water port in Alaska will also be debated early next year. But in keeping with the 2008 Illulissat Declaration, the Arctic 5 will probably try to work together amicably and bilaterally rather than through new multilateral institutions. If any states are to remain aggressive, however, the most likely candidate is Canada.

And lest we forget, expect to see more reports that the ice in the Arctic is melting. It wasn’t so long ago that scientists were predicting that the Arctic would be completely ice-free in the summer of 2010. While such a scenario is a long-shot, the ice cap will surely diminish ever further - opening up the possibility of new shipping routes, and consequently new tensions. Above all, melting ice reinforces the primacy of natural resources and economics in the Arctic: whether drilling for oil, mining Arctic gold, or levying taxes on cargo ships, the economic promises of the Arctic will drive countries away from militarized conflict and towards diplomacy in 2010.

Map of Exploratory Wells in Chukchi Sea (c) Anchorage Daily News.

Secretary of the Interior Ken Salazar conditionally approved Shell Oil Company’s plan to drill three “exploratory, information-gathering” oil wells in the Chukchi Sea during the next open season, which will be from July-October 2010. There will be tough environmental restrictions on the exploratory drilling, yet these still aren’t enough to satisfy environmental watchdogs. The Anchorage Daily News has an in-depth story on the topic.

In a press release, he stated, “A key component of reducing our country’s dependence on foreign oil is the environmentally-responsible exploration and development of America’s renewable and conventional resources.” He continued, “By approving this Exploration Plan, we are taking a cautious but deliberate step toward developing additional information on the Chukchi Sea.”

Sarah Palin, as you could probably guess, was delighted with the announcement.

On her Facebook profile, she posted a message saying, “As an Alaskan and an American, I am very grateful for the decision today because it is a step in the right direction toward prosperity for Alaska and energy independence and security for America.”

Senator Lisa Murkowski (R-Alaska) has introduced a bill into the Senate Armed Forces Committee proposing to study the feasibility of creating a deep water sea port in the Arctic. The port, which as a deep water port would be able to receive Panamax ships, would “protect and advance strategic United States interests within the evolving and ever more important region.” Interestingly, the so-called Arctic Deep Water Sea Port Act (S. 2849) would enable the Department of Defense and Department of Homeland Security to conduct the report, demonstrating that the port is more an issue of national security rather than economics. The report would take two years and would study the best places to locate such a port and what strategic value such a port would have.

In a press release on her website, Murkowski stated,

“The United States needs to be able to guard its territorial claims and its economic interests in the Arctic, especially as a decrease in seasonal ice is leading to increased marine activity in the region. With the high potential for further industrial and commercial activity in the Arctic region, the United States must ensure that it is prepared to protect human life as well as the vulnerable Arctic environment.”

Map of the (Canadian) Northwest Passage

In a symbolic move towards securing Arctic sovereignty, the Canadian House of Commons today passed an amendment renaming the Northwest Passage the “Canadian Northwest Passage.” The move was nearly unanimous. Some Inuit leaders initially expressed reservations with the renaming until House members agreed to allow for a provision that would permit an official Inuktikut name alongside the English-language name. The Inuit, who have plied these waters for thousands of years, traditionally refer to the passage as “Tallurutik,” meaning “linear landscape.”

The renaming of the passage could prove controversial. Canada considers the passageway to be internal waters, while most other countries - including the United States - view it as an international strait. The dispute between the two North American countries came to a head in 1985, when a U.S. coast guard icebreaker passed through the waters without having asked for Canadian permission. Consequently, Canada declared the Northwest Passage to be “internal waters.”

The symbolic move also follows on the heels of Foreign Minister Cannon’s speech on November 23 to the Economic Club of Canada.

As quoted in the Globe and Mail, Foreign Minister Cannon remarked,

“Canada is in control of its Arctic lands and waters and takes its responsibilities very seriously… This is why we react so strongly when other nations like Russia engage in exercises and other activities that appear to challenge our security in the north and undermine the co-operative relationship that we must, and should, put in place.”

He called Canada an “energy superpower.” Of course, following last week’s release of the True North report on the state of Canadian Arctic infrastructure, global warming could both open up oil fields and weaken the infrastructure needed to carry out industrial activities - thus jeopardizing Canada’s supposed “energy superpower” status.

Michael Byers, Canada Research Chair in Global Politics and International Law at the University of British Columbia, writes in the Globe and Mail that he can “hear the laughter in the State Department.” He says that the Northwest Passage is “already Canadian,” and that the newest attempt to declare it as such will only backfire. Nomenclature does little to convince other that a territory or waterway belongs to that country: witness the back and forth between South Korea and Japan over the “Sea of [insert country here].”

News Links

“Arctic sea route to be renamed ‘Canadian Northwest Passage’,” Vancouver Sun

“Canada an ‘energy superpower’ in the Arctic, Cannon says,” Globe and Mail

“The Northwest Passage is already Canadian,” Globe and Mail