With the layers of restrictive ice over the Arctic cap slowly diminishing, oil companies and a host of countries are competing to exploit large oil and gas reserves. As a global commons, there is no preexisting standard to judge the validity of the numerous claims, leaving non-continuous countries, such as China disputing the notion of contiguous rights. Ed Struzik, author of the Big Thaw, takes a look at different players involved in the race, their strategies, and the rules which seek to govern this escalating scramble for resources.

Also, see late breaking news on amendments to ACELA in the Energy and Natural Resources Committee.

When the Russians sent two icebreakers to the Arctic in 2007 to stake a claim to the seabed at the North Pole, they gave notice to the rest of the world that they were serious about winning a race for the vast reserves of oil and gas which lie under melting glaciers. While that act may have been simply political theater, the race to secure claims to international commons is very serious; Russia, the United Sates, Canada, Denmark, and Norway are all pitted against one another.  What isn’t getting nearly enough attention is the fact that the five coastal Arctic countries aren’t the only ones banking on an Arctic future.  An increasingly assertive China has dismissed the idea of prior claims to an international commons, and the continental Europeans have been looking to get involved as well.  The race is reminiscent of the battle to divvy up the rights to explore Antarctica: managed correctly, it could actually produce benefits for everyone involved.  However, progressing at breakneck speed as it is, it would only take a few antagonistic moves by individual countries to push the race into a situation of overt conflict, increasing risks to and uncertainty for businesses with an eye on the substantial Arctic resources.

Scale of the Resource

Geologists have long known that there is a tremendous amount of energy stored beneath the Arctic ice.  By one estimate, the Arctic holds a quarter of the planet's undiscovered petroleum. The Russian Ministry of Natural Resources calculates that the Arctic Ocean territory under its control contains as much as 586 billion barrels of untapped oil.  (By comparison, all of Saudi Arabia's current proven oil reserves amount to only 260 billion barrels.)  In addition to oil, there are tremendous gas reserves as well.  The Shtokman field, for instance, which is the largest known offshore gas reservoir in the world, was discovered in the Russian jurisdiction of the Barents Sea, between Russia’s mainland and the arctic, in 1988. It has proven reserves of 3,500 billion cubic meters (123,601 billion cubic feet) of gas, an amount that could supply all of Europe’s needs for seven years. A gas pipeline from the site is due to be completed in 2013.

No one ventured a serious tally of seabed gas volumes in the Arctic until 2008, when the U.S. Geological Survey published a report that estimated the amount to be “90 billion barrels of undiscovered, technically recoverable oil; 1,670 trillion cubic feet (tcf) of technically recoverable natural gas; and 44 billion barrels of technically recoverable natural gas liquids” lying within a total of 25 separate geologically defined areas discovered to have petroleum potential. (See here.)  According to that same report, those volumes would account for about 22 percent of the undiscovered, technically recoverable resources in the world.


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