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New Focus on the Arctic
Russia has asserted a new claim to the Arctic sea floor along a swath extending from Russia past Norway and Canada to Alaska. This is but one indicator of new and growing interest in a vast region long known for rich resources of oil, gas, and a variety of minerals. Now, global warming, new technology and other factors promise to open diversified opportunities sooner than expected.
by McKINLEY CONWAY
The Law of the Sea, as defined by the United Nations, is a bit murky. Some nations claim territorial waters within three nautical miles of shore. Others have a 12-mile (19-km.) limit. Also, some nations may have exclusive economic zones (covering mineral and other rights) up to 200 miles (322 km.) offshore. A continental shelf extending beyond 200 miles (322 km.) may also be included. Beyond that there is confusion and debate.
Now these claims have become a hot issue in the frozen Arctic. If global warming continues as forecast, the melting of Arctic ice will uncover a vast region believed to contain about one-fourth of the Earth's remaining petroleum reserves. Exploration that has been focused onshore is moving out to sea.
Russia is not the only nation claiming a new interest in this fast-expanding scope of opportunity. Continental shelf claims of Norway, Denmark (Greenland), Canada and the United States are also involved. Right now there are numerous projects aimed at mapping the ocean floor under the Arctic ice to find out who might own what.
Global warming may be a problem for polar bears, but it can't come fast enough for the oil companies. They have been aware of huge offshore Arctic oil reserves for years. In the 1960s Atlantic Richfield and Humble Oil (later Exxon) discovered a vast oil field in Prudhoe Bay just a few miles from the Alaskan shore. Ten years later the first oil flowed via the new Trans-Alaska pipeline to Valdez where it is transferred to tankers bound for California.
The latest offshore thrust marks the start of a new chapter in the emergence of a region we have been watching for many years.
During World War II the Japanese landed on an island in the Aleutians and threatened Alaska and the Pacific coast of the United States and Canada. Our response was to build a crude highway along an inland route from Edmonton to Fairbanks so we could send troops and supplies to Alaska without risking them going through sea routes where Japanese submarines prowled. The wartime Alcan Highway later became a significant factor in opening the Far North to economic development.
Starting with the Alcan Highway
In later years there have been a series of fabulous developments scattered from Western Canada to Eastern Siberia. We won't attempt to list them all, but here are a few examples:
The expanse of unique oil-laden sands of Northern Alberta have intrigued planners for years. The deposits were estimated to contain oil reserves second only to those of the Middle East but would require expensive new technology to develop. Now, after investments of some $15 billion, production is in full sway. The leader is Syncrude, a joint venture among eight U.S. and Canadian energy companies. Last year they delivered about 80 million barrels of crude to U.S. refineries.
Alberta oil sands project
This spectacular project, engineered by Bechtel, involves a series of hydroelectric power stations on the La Grande River in northwestern Quibec between James Bay to the west and Labrador to the east. The project covers an area as large as the state of New York and is one of the largest hydroelectric systems in the world. The project has cost upwards of $US20 billion to build and has an installed generating capacity of 16,000 mw – now serving homes and businesses in eastern Canada, New England and New York.
James Bay hydro
This is a $US10 to $20 billion oil and gas development in Far East Russia. The Sakhalin Energy Consortium is led by Shell, with Mitsubishi and Mitsui as the other key shareholders. It is the largest direct foreign investment in Russia and one of the largest integrated oil and gas developments in the world. It involves offshore platforms linked to the shore by offshore pipelines. The oil and gas will then be transported via 497-mile (800-km.) pipelines to the south of Sakhalin Island, the site of a new LNG plant, as well as oil and LNG export terminals.
Many other projects are in early stages of development. The United States Minerals Management Service has recently awarded 92 offshore tracts in the Beaufort Sea to six companies. The MMS estimated that some 10 million acres (4,046,856 hectares) offered could contain as much as 7 Bbbl oil and 32 tcf gas. In the Norwegian sector of the Barents Sea, Hydro (now Statoil-Hydro) recently announced the results of the Nucula prospect, which contains an estimated 300 MMbbl of recoverable oil. The Korean National Oil Company (KNOC) and Rosneft (Russian Oil Company) have formed a joint venture, the West Kamchatka Holding Company, to begin oil and gas exploration in the Sea of Okhostk,
In addition to such oil and gas projects, other firms are exploring opportunities for diamonds and a variety of minerals. World-famous De Beers has been active in Canada for years and is investing in a site near Attawapiskat. Arctic Star reports diamond projects at half a dozen sites in Canada.
Elsewhere there are new ventures in a wide range of industries. Alcoa is building an aluminum smelter in Iceland to take advantage of plentiful geothermal power. That same energy source has several major firms looking at possibilities for making Iceland a world center for production of fuel cells. There is also a plan for laying an underwater cable to deliver electric power from Iceland to the United Kingdom.
In Greenland there is talk of locating a hydro power plant there to use the energy of the melt water falling from the ice cap. This may be a bit fanciful, but even in Greenland tourism is getting to be serious business.
Next to minerals development, tourism is the second leading industry stretching across the Far North region. Interests that have long been important to Alaska and Canada can now be seen in every part of the remote expanse. SAS flies groups of Danish campers to Greenland where they set up tents next to the airstrip and trek onto the ice cap.
Arctic tourism is NOW!
Russia is using some of its biggest ice breakers to take tourists into the Barents and White seas. Some Russian travel agencies offer "high latitude" cruises to Franz Josef Land and the Nova Zembla islands. Some may include a trip to the North Pole using a combination of ice breaker, helicopter and skis. One former Russian navy ice breaker has been converted to become the North Sea Flotel.
Further evidence of tourism interest is afforded by the Global Ecotourism Conference, held in Oslo, and the International conference on Tourism and Global Change in Polar Regions, held at the University of Oulu, Finland, a part of the International Polar Year activities.
Indigenous populations of Eskimos, Inuits, Lapps, Dolgans, and many other tribes, though small in numbers, play an important part in the tourism programs. They take pride in showing visitors how they manage to live during long frigid winters and sustain themselves via hunting and fishing.
Arctic nations see tourism as a means for self-governing indigenous groups to make the transition to a changing world. Canada has created a new province called Nunavut in which native leaders govern a population of some 30,000. In Siberia the Yakuts (also known as Sakha) have an autonomous republic within the Russian Federation.
In grammar school I was intrigued by the blank spots on the globe in our classroom. Those were the areas such as the Amazon basin, the Gobi desert, and the Arctic and Antarctic polar regions where there was not much printing on the globe – virtually no place names or explanatory information. I found it hard to grasp that there was nothing there.
Filling in the blanks
For most world travelers these blank spots are still easy to overlook. For example, if not taking a nap or watching a movie, the air passenger at 35,000 feet (10,668 m.) over the Arctic gets only an occasional glimpse of an expanse of white far below. Ho hum.
Later in life when I began traveling around the world exploring development opportunities, sites, and projects, I visited the blank spots to see what they were really like. I found that if I got close enough to the land and people I would have a much different view. In every area I found creative people doing interesting things.
One of the best ways to get to remote areas and study them is to fly your own small airplane. This approach requires you to deal with such things as polar navigation problems, fuel supplies, languages, currencies, bureaucracies, food and shelter services, and weather forecasts or the lack of any or all of them. I have been privileged to do that for 50 years.
This experience has given me a different view of the world. For example, some years ago I flew a small single-engine Mooney aircraft to Europe along the great circle route that extends from Northern Canada across Greenland and Iceland to Scotland. I have vivid memories of skimming along just a few hundred feet above the Greenland ice cap, seeing dramatic proof that it is not just a big white mass. There are ridges as high as 9,000 feet (2,743 m.) and crevices that could swallow an airplane and leave no trace. There are bright blue summer melt ponds. It is an awesome display.
My timid ventures gave me a great respect for the pioneering bush pilots who were an important factor in opening up the Arctic region. Daring pilots flew to remote outposts in float planes in summer and ski-equipped planes in winter. Many gave their lives.
Most of my flights were made before the wonderful new avionics systems such as GPS (Global Positioning System) were available. I once flew from Edmonton north to Fort St. John, Watson Lake, Whitehorse, and Fairbanks, sometimes at treetop level, using the Alcan highway as my primary navigation aid. North of Fairbanks I watched the Trans-Alaska pipeline march across the terrain toward Prudhoe Bay.
I have vivid memories of picking up ice over the Davis Strait and letting down on instruments into Sondrestrom fiord on Greenland's west coast with mountains on either side. On another day over the ice cap my remote compass froze. The next day I was about half way between Reykjavik and the Faeroe Islands when the suction pump driving my gyro instruments failed. I made it into Prestwick under a 300-foot (91-m.) ceiling.
Of course, there were many experiences that were not life-threatening but annoying. One afternoon over the Yukon Territory I ran into a cloud of black flies that plastered my Aero Commander canopy and leading edges with goo that took a steam cleaning to remove. Offsetting such inconveniences were a treasure of personal experiences that make for a very satisfying trip down memory lane in my old age.
In the early 1980s, my daughter Laura and I arrived late one day at Frobisher on Baffin Island. In a rustic lodge we had caribou steaks for dinner and heard stories about the supply ship that came once a year. When we went to our room we were astonished to find a TV set on which we picked up an Atlanta Braves baseball game. Thanks to a satellite link, our home team was also a favorite of the local Eskimos. Adding to the exotic mix were the sled dogs barking outside as we tried to sleep.
I have flown close to the magnetic North Pole but I have never been to the exact geographic pole. I have done most of my exploring at lower latitudes – always during the summer months. While my airplane might pick up ice a few thousand feet above the surface the temperatures on the ground were usually above freezing. Under these conditions some far north sites can be rather pleasant.
I have visited the summer palace of Peter the Great, located on an arm of the Baltic, and can report that the famed Czar had a very comfortable layout. I rode the Trans-Siberian Express across Siberia and saw many small rural communities that looked very livable when there was no blizzard blowing. The Lake Baikal area is interesting and scenic.
During the Cold War I found the political climate in Eastern Siberia to be much more lugubrious than that of Moscow. First, I had trouble making travel plans. Finally I signed up with a London agency to travel with a group of 10 British school teachers going from the United Kingdom to Hong Kong on a history education tour to retrace a route taken by colonial pioneers a century earlier. Of course, I was a ringer, but it worked.
In Moscow I went to TASS headquarters and asked for information about developments in Siberia along our route. The reception was cool and I got no help. Several thousand miles later in the small town of Irkutsk, focal point of Eastern Siberia, I found local officials flattered by my interest and eager to help.
("A Scan of Development in the USSR." In order to extend our editorial horizons, ID's publisher trekked through Siberia, across Mongolia and the Gobi desert, and into Northern China. Here is a rare picture of major development projects in one of the world's most remote regions. Industrial Development," Nov./Dec. 1983. pp. 4-38).
Today there are so many big projects proposed for the Arctic region that we have difficulty keeping up the listings in our Global Super Projects Registry. Perhaps the most widely discussed is the Bering Strait crossing to link Asia and North America. The latest proposal is a tunnel about 64 miles (110 kilometers) long – about twice as long as the Eurotunnel connecting England and France.
Super projects for the future
The tunnel would be part of a project involving a railway joining Yakutsk, the capital of the Russian Yakutia republic with the western coast of Alaska. There would also be a pipeline to bring Siberian oil and gas to the United States. Further, an electric power grid would permit Russia and the United States to swap cheap off-peak energy to one another from the night side to the day side.
There is also increasing interest in the long-sought Northwest Passage that would allow ocean traffic to move from the Atlantic to the Pacific via the Arctic. Global warming would be a major factor.
Global warming would also bring new agricultural opportunities. Extending the area of usable land just a few miles to the north would give the world great new production areas in Canada and Russia that would help meet the growing global food needs.
Looking farther ahead, futurists believe that a booming Arctic population will be housed in domed communities heated by space mirrors. Residents will relax beside their swimming pools amid lush tropical gardens. New competition for Acapulco!
About the AuthorMcKinley Conway's development history is voluminous and distinguished. Just a few of his milestones include founding Site Selection, the first-ever magazine focused on corporate real estate and economic development, and founding two industry associations that set the standard for the industry's professional development the International Development Research Council (IDRC) and the Industrial Asset Management Council (IAMC).
And there's much, much more. Conway created the industry's first development-focused Internet site, SiteNet, all the way back in 1983. And he founded Spruce Creek, the pioneering fly-in community near New Smyrna Beach. For even more on Conway's sizeable development-industry legacy, click here.
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