Arctic Council Signals Rulemaking Maturation

The nations of the Arctic are cautiously starting to cooperate but remain competitors for the region’s vast hydrocarbon reserves.

A recent summit of Arctic nations yielded two relatively minor agreements on future oil spill cooperation and combined search and rescue operations. The deals hardly constitute a breakthrough but what is important, according to Wikistrat‘s latest CoreGap Weekly Bulletin, is that the Arctic Council has moved into a rulemaking phase — “crucial given the rapid pace of events there.”

The eight members of the Arctic Council — Canada, Denmark, Finland, Norway, Russia, Sweden and the United States — all claim part of the polar region which is rapidly becoming accessible to shipping and mining activity due to global warming.

The Arctic is estimated to contain about 13 percent of the world’s undiscovered oil and so much as 30 percent of the world’s undiscovered natural gas. Together this represents 22 percent of all untapped but technically recoverable hydrocarbons. Over 80 percent of those resources lie offshore.

Because of the region’s abundance, Wikistrat expects it to fall subject to all of the resource developing pressures that a host of frontier economies has come under in recent years, thanks in no small part to the global economy’s spectacular expansion. Tourism is increasing while the prospect of a northern passage for cargo could impact global supply chains considerably.

The imminent scramble for resources should be welcomed in places as Greenland and Quebec where relatively small populations just won the globalization lottery. There is a risk of secessionism in those areas, especially in Greenland, being invigorated however. Denmark, which otherwise doesn’t have access to the Arctic’s vast oil and gas reserves, won’t be keen on extending autonomy to the Greenlanders unless it can share in the prize.

Tensions are rising among countries in the Arctic Circle as well. Canada and Russia are particularly adamant about their claims. President Dmitri Medvedev warned in March of last year that his country was prepared to defend its stake. “We have seen attempts to limit Russia’s access to the exploration and development of the Arctic mineral resources,” he said. “That’s absolutely inadmissible from the legal viewpoint and unfair given our nation’s geographical location and history.”

In good Cold War fashion, Moscow planted its flag into the seabed beneath the North Pole and resumed patrolling the region with bomber planes and warships while investing more than a billion dollars in the expansion of the port of Murmansk which is supposed to double its capacity by 2015.

Russia last year clashed with Canada over control of the Lomonosov Ridge, a mountain chain that runs underneath the Arctic. Prime Minister Stephen Harper, who just this month won a parliamentary majority for his conservative party, campaigned explicitly on securing Canada’s interests in the region, saying that “the north has never been more important to our country.”

Wikistrat is none too impressed. “The real danger of this rush to develop resources,” it points out, “so as to ‘establish facts on the ice’ — is environmental damage to fragile areas.”