- The Washington Times - Saturday, July 4, 2009

The global recession and lawsuits from environmental groups have slowed the scramble for previously unattainable oil and gas reserves and shipping routes in the Arctic caused by climate change, and have provided a window to resolve complicated ecological and security concerns, specialists say.

Many major international oil and gas companies have put large-scale projects on hold, said Alexander Braun, a specialist on Arctic change and sea dynamics at the Arctic Institute of North America at Canada’s University of Calgary in Alberta.

American companies active in the Arctic have historically had to watch the economy and commodity prices closely because of the higher cost of operating there.

Richard Ranger, senior policy adviser at the American Petroleum Institute, an industry lobbying group, said direct legal challenges are also slowing exploration and production off Alaska’s coast.

The Center for Biological Diversity, a nonprofit conservation group, is the principal party behind Arctic litigation, Mr. Ranger said. The group has filed lawsuits with the federal Minerals Management Service to halt the issuing of air quality permits to Royal Dutch Shell, asserting, according to the center’s Web site, that the oil giant has not adequately assessed how exploratory drilling would affect wildlife and native populations.

Shell announced earlier this week that it was withdrawing its 2007-2009 drilling plan in the Beaufort Sea and would submit a new plan for 2010. The U.S. Court of Appeals for the 9th Circuit in San Francisco blocked the company from oil drilling in July 2007.

The center was also responsible for several lawsuits that led to last year’s listing of the polar bear as a threatened species under the Endangered Species Act.

In addition to the United States, major countries including Russia, Canada, Norway, Iceland and Denmark via Greenland are vying for investment in the Arctic. The area is warming faster than any other region and will be ice-free in the summer by 2013, according to a new report by the Carnegie Endowment for International Peace, Dartmouth College and the University of the Arctic in Canada.

“The present global economic slowdown provides a much-needed hiatus in Arctic commercial pressures during which important Arctic powers could work on developing coordinated rules and best practices by which to govern Arctic resources,” the report said.

Melting ice has allowed for expanded oil and gas production, mining, fishing, shipping and cruise ship tourism, but it also causes safety and environmental concerns such as moving glaciers, sea rise and coastal erosion, Mr. Braun said. To assess and manage these consequences, he said, governments must use this window to establish a monitoring network for the Arctic by using technology that is already in use for other continents and oceans.

“We must understand the processes going on in the Arctic, measure if this crust is moving left, right, up or down so climate change can be assessed,” Mr. Braun said. “There is a lot of important knowledge about physical processes that we are missing.”

The Integrated Ocean Drilling Program, an international partnership of scientists and research institutions, is sending a team to the Bering Strait this month to gather information on the Arctic core, said Nancy Light, director of communications for the program.

Obtaining knowledge on the status and dynamics of the region will allow industries and nations to extract the region’s resources more efficiently and safely, Mr. Braun said.

Current institutions and treaties do not adequately address who owns the sea bed where these oil and natural gas sources lie.

“It is a purely political battle right now to claim rights to the Arctic,” Mr. Braun said. “We have activity by a lot of governments who are trying not to miss the train.”

The Arctic is believed to hold 90 billion barrels of undiscovered oil - 10 percent of the world’s remaining reserves and enough to supply current world demand for three years. An estimated 30 percent of the world’s remaining reserves of natural gas are also in the region, according to the U.S. Ecological Survey.

Companies such as BP - formerly British Petroleum - ConocoPhillips, Exxon Mobil Corp., Shell, Pioneer Natural Resources, Eni, Anadarko and StatoilHydro are currently the most active in Alaska and off-shore, Mr. Ranger said.

BP and Exxon Mobil are also exploring the Canadian Arctic, he said.

“There’s a growing energy demand and there’s untapped energy sources in the Arctic,” said David Balton, a deputy assistant secretary of state at the Bureau of Oceans and International Environmental and Scientific Affairs. “Knowledge is growing of what is down there, and this is becoming an issue.”

U.S. policy for the Arctic has evolved more slowly than the ice is melting.

The next few years are “critical in determining whether the Arctic’s long-term future will be one of international harmony and the rule of law, or of a Hobbesian free-for-all with dangerous potential conflict,” Scott G. Borgerson, a visiting fellow for ocean governance at the Council on Foreign Relations, told the Senate Foreign Relations Committee in May.

“Russia, with the biggest portion of territory in the Arctic, is increasingly forceful in military and economic expansion,” Mr. Braun said. “Canada and the U.S. each want a say in the region, as well as Norway and Denmark through Greenland.”

China, South Korea, Singapore and Japan also have made moves to tap into the region’s resources or shipping routes, Mr. Borgerson said.

Anticipating a rise in traffic in the region, the U.S. Coast Guard has increased its presence in the Arctic waters north of Alaska, said Chief Petty Officer Dana Warr, spokesperson for the Juneau office.

While no permanent station has been established in the Arctic, the Coast Guard conducts two-week operations and sends a research ship into the Arctic every summer to research global warming.

Under a 1994 treaty, the United Nations Convention on the Law of the Sea, countries have the sovereign right to the seabed and soil beneath it out to 200 nautical miles from their coast, and in some cases, these nations can claim sovereignty as far out as 600 miles, said Cmdr. James McMahon, staff judge for the 17th District of the U.S. Coast Guard.

In the Arctic, however, scientists do not know where nations’ continental shelf ends and the international oceanic crust begins.

Without clear scientific data, many countries have been claiming more than they can legally justify, Mr. Braun said. “If there are major offshore oil fields in an area where we don’t know who owns it, it is worth fighting to ensure your nation’s sovereignty, especially with oil prices coming back up.” Mr. Braun said.

The Coast Guard has teamed its icebreakers with other government agencies to do seabed maps and has developed a strong working relationship with the Canadian Coast Guard and Russian border guards in the Arctic, Cmdr. McMahon said.

Mr. Balton said U.S. efforts are under way to define the shelf boundaries.

“Yes, there is conflict in the region, but this is not a lawless region,” he said. “Billy the Kid is not going to ride in the Arctic.”

The U.N. convention provides a foundation to build future governance, Mr. Balton said.

The United States has signed the treaty, but the Senate has not yet ratified it. Thus it is not able to solidify a claim to its continental shelf that is recognized by other countries. That has made oil companies reluctant to invest in operations that may be in disputed waters, Cmdr. McMahon said.

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