MERCHANDISER
THE AREA NORTH OF THE ARCTIC CIRCLEhasanestimated90 nationaltreatythatestablishessubseaboundaries.Theconvention
billionbarrelsofundiscovered,technicallyrecoverableoil;1,670tril- saysanycoastalstatecanclaimterritory200nauticalmilesfrom
lioncubicfeetoftechnicallyrecoverablenaturalgas;and44billion theirshorelineandexploitthenaturalresourceswithinthatarea.
barrelsoftechnicallyrecoverablenaturalgasliquidsin25geologi- Oilcompaniessaytheywouldbeunwillingtoexploreforresources
callydefinedareasthoughttohavepotentialforpetroleum,accord- intheareasbeyondtraditionalboundariesunlessthereislegalcer-
ingtotherecentlyreleasedUSGeologicalSurvey(USGS)assess- taintyestablishedbyinternationallawsuchastheconvention.
ment – thefirstpubliclyavailablepetroleumresourceestimateof
theentireareanorthoftheArcticCircle.
Theseresourcesaccountforabout22%oftheworld’sundiscov-
ArcticCircleFuelsBonanza
ered, technically recoverable resources. The Arctic accounts for
about13%oftheundiscoveredoil,30%oftheundiscoverednatu- JeffreyGarten,theJuanTrippeprofessorininternationaltrade
ral gas and 20% of the undiscovered natural gas liquids, with andfinanceattheYaleSchoolofManagement,hassuggestedcre-
around84%oftheestimatedresourcesexpectedtooccuroffshore. atingaglobalauthorityforArcticoilandgastoavoidfurtherdis-
“Beforewecanmakedecisionsaboutourfutureuseofoilandgas putes.Writinginthe Financial Times [August14
th
2008]hesug-
andrelateddecisionsaboutprotectingendangeredspecies,native gestedtheneedto,“...createaninstitutionimbuedwithsovereign
communitiesandthehealthofourplanet,weneedtoknowwhat's powerstodevelopthemassivefuelsourcesintheArcticCircle.It
outthere,”saidUSGSDirectorMarkMyers.“Withthisassess- wouldbeafar-reachingstep,butthestakeswarrantaspecial
ment,we’reprovidingthesameinformationtoevery- attempttotakeit.”
oneintheworldsothattheglobalcommunity DevelopingtheArcticCircleissorifewithcon-
canmakethosedifficultdecisions.” flictinginterestsamonggovernments,busi-
Oftheestimatedtotals,morethanhalf nessesandnon-governmentorganisations
of the undiscovered oil resources are thatyearsofdelayarelikely. Inaddi-
estimated to occur in just three geo- tion,energydevelopmentmustavoid
logic provinces – Arctic Alaska, the any further destruction of Arctic
Amerasia Basin, and the East wildlife.Itmusttakeaccountofthe
Greenland Rift Basins. On an oil- habitatsofindigenouspeople.Asthe
equivalencybasis,undiscoverednat- polaricecapmeltsbecauseofglobal
ural gas is estimated to be three warming, the Arctic is becoming an
timesmoreabundantthanoilinthe important shipping lane between
Arctic.Morethan70%oftheundiscov- EuropeandAsia,raisingahostoftrans-
erednaturalgasisestimatedtooccurin portrelatedregulatoryconcerns.
threeprovinces–theWestSiberianBasin, “Existing international law cannot deal
theEastBarentsBasinsandArcticAlaska. withallforthcomingdisputes.Thesheernum-
The USGS Circum-Arctic Resource Appraisal is berofinternationalbodiesthatclaimsomejuris-
partofaprojecttoassesstheglobalpetroleumbasins diction–includingtheArcticCouncil,theLawoftheSea
usingstandardisedandconsistentmethodologyandprotocol.This Convention,theUnitedNationsInternationalMaritimeCommission
approachallowsforanarea’spetroleumpotentialtobecompared –isarecipeforinstitutionalcompetition,polarisationanddelay.And
tootherpetroleumbasinsaroundtheworld. amultilateralagreementamonggovernmentswouldnotsuffice,for
Explorationforpetroleumhasalreadyresultedinthediscoveryof itissuretoleadtoanotherinter-governmentalprocessboggeddown
morethan400oilandgasfieldsnorthoftheArcticCircle.These inslowmotionbureaucraticmachinerywhoseactivityisparalysedby
fieldsaccountforapproximately40billionbarrelsofoil,morethan thethreatofnationalvetoes”saidGarten.
1,100trillioncubicfeetofgas,and8.5billionbarrelsofnaturalgas Whatisneededisanorganisationtowhichsovereigntyisceded,
liquids. Nevertheless, the Arctic, especially offshore, is essentially withgovernments,industryandothershavinganadvisoryrolewith-
unexploredwithrespecttopetroleum. outanybeingabletooverrideArcticAuthoritydecisions.“Itsmis-
Withthescaleofthesefindingsitishardlysurprisingthatthe sionwouldbetoensurethatthemaximumamountofenergyispro-
countriesinvolvedsurroundingtheArcticCirclearevyingforthe ducedconsistentwithconsiderationfortheenvironmentandother
prize. At least five countries lay claim to the region's energy issues.Itwouldberesponsibleforcreatingorderoutofwhatwill
resources:Russia,Canada,theUS,DenmarkandNorway.Conflicts otherwisebecomeanationalscrambleforresourcesthatcouldeven
arebrewingaboutwhoownswhat.Theracetoestablishrightsover havemilitaryimplications,”saysGarten.
theresourcesbeyondtraditionalboundarieshaveheatedupsince TheprecedentGartendrawsuponisthatoftheEuropeanCoal
Russiabeefed-upitsArcticpresenceandaRussiansubmarineplant- andSteelCommunity,establishedtohelpavoidanotherbloodywar
edtheRussianflagontheseabedundertheNorthPolelastyear. ontheEuropeancontinent.
In August, the US State Department announced a joint US- “Inthewakeofaspreadingcreditcrunch,failedDohatradenego-
CanadascientificexpeditiontomaptheArcticseabedaspartofan tiationsandrisingresourcenationalism,enhancedglobalco-opera-
effort to claim ownership of underlying natural resources. tioninanyareamightseemfarfetched.Nevertheless,isnotthisthe
Meanwhile, Canada’s government is preparing a larger military momentforworldleaderstoshowtheyarecapableofmeetingnew
presenceintheregion,andtherearerenewedcallsintheUSforthe challengesinnewways?”saysGarten.
SenatetoratifytheUNConventionontheLawoftheSea,aninter-
www.usgs.gov/corecast
COMMODITIES NOW SEPTEMBER 2008 25
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102