Unfreezing Arctic Assets

Photo Credit: Ray Bartkus

By Laurence C. Smith
The Wall Street Journal, September 18, 2010

Imagine the Arctic in 2050 as a frigid version of Nevada—an empty landscape dotted with gleaming boom towns. Gas pipelines fan across the tundra, fueling fast-growing cities to the south like Calgary and Moscow, the coveted destinations for millions of global immigrants. It’s a busy web for global commerce, as the world’s ships advance each summer as the seasonal sea ice retreats, or even briefly disappears.

Much of the planet’s northern quarter of latitude, including the Arctic, is poised to undergo tremendous transformation over the next century. As a booming population increases the demand for the Earth’s natural resources, and as lands closer to the equator face the prospect of rising water demand, droughts and other likely changes, the prominence of northern countries will rise along with their projected milder winters.

If Florida coasts become uninsurable and California enters a long-term drought, might people consider moving to Minnesota or Alberta? Will Spaniards eye Sweden? Might Russia one day, its population falling and needful of immigrants, decide a smarter alternative to resurrecting old Soviet plans for a 1,600-mile Siberia-Aral canal is to simply invite former Kazakh and Uzbek cotton farmers to abandon their dusty fields and resettle Siberia, to work in the gas fields?

European explorers first started pressing north five centuries ago, searching for an alternate passage to the Orient. By the 19th and early 20th centuries, urban donors around the world were funding expeditions to the Northwest Passage and North Pole. Fears of Japanese invasion and communist ideology opened up the region as military spending poured in during World War II. During the Cold War, American and Russian forces played cat-and-mouse war games there with spy planes and nuclear-armed subs.

Today, scientists studying oil and gas potential—and how shrinking summer sea ice might make it easier to access offshore deposits—are convincing governments and investors that the region has rising strategic value. Private companies have snapped up Canada’s northernmost railroad and port of Churchill, bought $2.8 billion in Arctic offshore energy leases, and begun developing specialized tanker ships and platforms for offshore drilling in icy environments. This year, Russia and Norway resolved a four-decade-long boundary dispute in the Arctic Ocean, which could pave the way to more offshore development. Canada, Norway and Russia are bolstering their militaries with ice-strengthened patrol ships, frigates, attack submarines and fighter jets.

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