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Who Owns Rights to Melting Arctic?


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This map shows potential routes of the Northwest Passage and Russia's Northern Sea Route. Though the Northwest Passage is currently iced over, analysts think global warming might reduce the ice and make passage a viable shipping route in 30 or 40 years. Ray Vella

For the better part of four centuries, explorers prowled the seas of North America, hunting the long rumored Northwest Passage, a navigable waterway that would connect Europe and Asia by way of the icy waters of the Arctic.

It wasn't until 1905 that Norwegian explorer Roald Amundsen made the first trip from the Atlantic Ocean to the Pacific by way of Arctic waterways, a feat that took him three years. Since then, fewer than 200 ships have repeated the journey because of the constant threats of ice.

Still, the hope for a Northwest Passage lingers and has become central to a key international debate heating up over the Arctic north. If climate change and global warming are real—and there's currently little doubt over that—then it stands to reason that the ice covering Arctic waterways will decrease in coming decades, presenting fewer navigational problems for shipping. If the ice recedes—and few experts expect it will do so year-round—cargo shipping times and distances could, the thinking goes, be cut: A 12,400-mile voyage from Japan to England by way of the Panama Canal could be shortened to less than 8,700 miles using the Northwest Passage, saving 14 days and costs.

Canada's Claim

But then whose water is it? Practically all of the navigable Northwest Passage routes, and there are only a few, pass between Canadian islands. Thus, Canada has argued that these portions of the route are domestic waterways, and that ships traversing the area should do so with Canadian permission. That has touched off a bit of a row between the U.S. and Canada. Just days before leaving office, President George W. Bush released a sweeping security directive asserting that the Northwest Passage is an "international waterway," meaning that American ships, or in theory those of any other nation, should be able to sail through the area in the same way they do other international waterways. The directive has been seen as a sharp rebuttal to Canadian Prime Minister Stephen Harper, who has advocated boosting Canada's military presence in the area.

Canada has maintained since the 1970s that it views the waters not as "international," but rather "internal." On all but three occasions of the 180-odd times that international ships have traversed the passage, Canadian permission and aid was sought, usually in the form of an icebreaking vessel, says Rob Huebert, a professor of political science at the University of Calgary, who specializes in Arctic affairs. That fact also helps buttress Canada's argument, he says. "Canada is the one with the expertise and the familiarity with the conditions," Huebert says. For years, the U.S. and Canada have quietly agreed to disagree over the matter—until Jan. 9, when Bush issued his Arctic security directive.

It's partially a military question. Submarines are required under international law to surface before traversing internal waterways but can remain submerged in international waters. And U.S. and Russian submarines have long been active in the area. For Canada, there's also an enormous environmental motivation. "If there's ever an oil spill, it's a disaster," Huebert says. "There's no technology that can remove heavy [oil] from under the ice. Canada tends to be hypersensitive about that." But sovereignty over shipping lanes that may or may not open up in the coming decades is only part of the ever-widening strategic game taking place in the Great White North.

Awaiting New Technology

A 2008 report by the U.S. Geological Survey, which took four years of study, estimated that as much as 20% of the world's undiscovered oil and natural gas may lie beneath the Arctic sea floor. The region may hold as much as 90 billion barrels of oil—believed to be about 13% of the world's undiscovered oil—and some 1.7 trillion cubic feet of natural gas reserves, roughly equivalent to the gas reserves in Russia, the world's leading supplier.

These findings made the question over sovereignty far more strategic—and contentious. Canada, Denmark, Russia, and the U.S. all assert territorial claims in the Arctic. And if oil prices ever rebound to the levels seen during the summer of 2008, topping $147 per barrel, less ice could help make fossil fuel recovery more cost-effective, if not exactly easy. "To get to the exploitation phase, you have to wait for the technology to advance," says Peter Zeihan, an analyst with Stratfor, a strategic consulting firm in Austin, Tex. But with the ice cap disappearing at a rate of more than 20,000 square miles per year, the technical challenges are expected to dwindle over time.

And that's where drawing the map of borders in the Arctic Ocean becomes paramount—and complicated. In August 2007, a Russian submersible descended through a hole in the ice to plant a Russian flag on the sea floor at the North Pole. It was a provocative stunt that caused some hand-wringing around the globe, especially in light of Russia's increasingly aggressive military stance. Countries are allowed to consider waters out to 12 miles from their coasts as their own territory. For countries that have signed the U.N. Convention on the Law of the Sea, which the U.S. has not but may do so soon, waters that go out 200 miles over a country's continental shelf are considered "exclusive economic zones." But if signatory countries can prove that their continental shelf extends beyond that 200-mile line, they have rights to oil, gas, and minerals beneath the seabed. Thus the scramble over competing claims of sovereignty.

Russia claims its shelf runs some 1,200 miles from Siberia—almost to Ellesmere Island, Canada's northernmost point, although Russia claims only the portion of the shelf on its side of the North Pole. Even so, if there is as much natural gas there as the U.S. Geological Survey thinks, and much of it is concentrated in areas Russia claims for itself, then it could conceivably solidify Russia's already dominant hold on the world's natural gas market—and thus raise the stakes in a strategic scramble now heating up at the top of the world.

Hesseldahl is a reporter for BusinessWeek.com.


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