NCPA - National Center for Policy Analysis

Energy Needs Fueling Tensions in the Arctic

January 25, 2012

While today's energy concerns turn focus disproportionately toward the Middle East, international tension over the last decade suggests that tomorrow's battleground will be the far off Arctic Circle.  With vast untapped reserves of natural gases and oil, the region has increasingly become a topic of discussion among the northernmost countries as national leaders vie for a larger share of its resources, says Alan Dowd, a senior fellow at the Fraser Institute.

  • The U.S. Geological Survey estimates that the Arctic may hold 1,670 trillion cubic feet of natural gas -- 30 percent of the world's undiscovered gas.
  • According to that same study, the region also contains 90 billion barrels of oil, which constitutes 13 percent of undiscovered reserves.
  • The large endowment of these natural resources is not a new discovery, but the price of these commodities has only recently risen high enough that extraction from the Arctic Circle would be cost efficient.
  • Furthermore, with forecasts from the Energy Information Agency estimating a 20 percent increase in daily world oil consumption by 2030, prices will continue to climb and the Arctic's resources will become more valuable.

Given this context, it is no surprise that the nations that line the Arctic Circle are increasingly searching for means to stake their claim to broad swathes of the territory.  This is especially true of the United States and Russia: the United States cites Alaska and its proximity to the Arctic as substantive motive for involvement while Russia looks to an underwater ridge extending from its continental shelf.  Their conflicting claims are a growing source of strife.

  • Russia claimed almost half the Arctic Circle in 2001, substantiating this claim in 2007 when it planted a flag below the North Pole.
  • In 2011, Russia announced plans to deploy two army brigades (10,000 troops) to defend its Arctic claims.

In order to make progress on this front and help ensure that Russia is not allowed to take advantage of its outsized claims, the United States will need to cooperate with its NATO allies who also have an interest in the region, including Canada and the Scandinavian countries.  It should also consider ratification of the UN Convention on the Law of the Sea to establish standards for negotiation.

Source: Alan Dowd, "The Big Chill: Energy Needs Fueling Tensions in the Arctic," Fraser Institute, December 1, 2011.

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