The Melting Arctic: a Fragile Frontier of Riches and Risk Opens for Business

The Arctic is estimated to have nearly one-quarter of the world's remaining untapped oil-and-gas reserves; while Russia and Norway are the only countries making significant strides in developing their resources so far, everyone wants a piece.  The shipping routes that are becoming accessible—the Northwest Passage, where the Crystal Serenity will cruise, and the Northern Sea Route—offer unprecedented access for China and other eastern nations to bring their goods to the rest of the world.  Those routes also provide a seasonal supplement to the Panama and Suez canals, which require ships to travel farther.

But the potential development in the Arctic is possible only because of global climate change; if those resources are developed, the further impact on the climate could be devastating.  It's not just about the polar bears, the iconic kings of the Arctic, whose threats from climate change are well documented.  A recent study in the journal Nature found that to keep global warming within the 2-degrees Celsius safe limit for all species, the Arctic's estimated 100 billion barrels of oil and 35 trillion cubic meters of gas "should be classified as unburnable."  In other words, off limits.

It's a paradox that Sen. Al Franken (D-Minn.) pointed out during a March 5 hearing on economic and strategic opportunities in the Arctic.  "So we have a bit of an ironic situation here, do we not?" he asked.  "Where the burning of fossil fuels is creating opportunity to find more fossil fuels to burn."

The environmental implications of oil-and-gas development of the Arctic go beyond carbon emissions.  Should a spill occur, it's not known how fast or how widely the oil would spread under the ice.  An additional complication:  the remote location and lack of infrastructure would hinder a speedy recovery.  On the shipping side, the intergovernmental Arctic Council has identified the release of oil—either by accident, or through illegal discharge—as the greatest threat to the Arctic's fragile marine environment.

Meanwhile, in the background yearning to be heard, are the four million inhabitants of the Arctic who live in remote communities where food and jobs can be scarce.  In many cases, these native communities have maintained a subsistence lifestyle.  As they dream of prosperity, many in these communities are stressing a compromise of sorts:  development, yes, but in a way that will protect the environment they depend on to survive.

The eight Arctic nations—Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States—serve as arbiters for the region.  They say they are aware of the fragility of the ecosystem that they are prospecting, and have pledged to create sustainable development that takes climate change and people’s lives into account.  But it's unclear how much that awareness will temper the pace of development.

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