Photo: Sovcomflot
Large numbers of ships exploit new route between Europe and Asia
Data from Russia’s Arctic and Antarctic Research Institute shows that the country’s entire Northern Sea Route now is ice-free, according to a report in the Independent Barents Observer. Continue reading
A Qatari-flagged LNG tanker crosses through the Suez Canal. Photo: Reuters
Prime Minister Dmitry Medvedev signs agreement on construction, though analysts puzzled as the location is far from natural gas field
Russia plans to build four artificial islands in the arctic Barents Sea to serve the natural gas industry, though analysts are puzzled by the location as it’s far from a gas field, while environmentalists warn of pollution dangers.
Prime Minister Dmitry Medvedev signed an agreement on June 17 to build the islands in Kola Bay of the Barents Sea at an estimated cost of $420 million. They are expected to come into use from 2020. Continue reading
The most significant geophysical event on our planet since the end of the ice age is taking place today—the opening of the Arctic. As the High North maritime environment warms, the Arctic Ocean’s abundant energy, minerals, fish stocks, and other natural resources are becoming increasingly accessible, while new potential maritime routes promise to reduce shipping times and costs and accelerate ties between major commercial centers. These new opportunities for energy development, natural resources extraction, and shipping suggest that the region risks becoming an arena of intense competition, tension, and potentially even confrontation, not only between the United States and its two near-peer strategic competitors—China and Russia—but also among other Asia-Pacific states with observer status in the Arctic Council. Continue reading
Keep in mind that this will mostly be a problem for the West and not Russia, who insisted it will forge ahead with developing Arctic oil and gas despite sinking prices and sanctions.
Oil companies have eyed the Arctic for years. With an estimated 90 billion barrels of oil lying north of the Arctic Circle, the circumpolar north is arguably the last corner of the globe that is still almost entirely unexplored.
Last year, Russian state-controlled oil conglomerate Rosneft became the largest oil company in the world after acquiring one of its major competitors. The company has had its sights on tapping Russia’s vast, treacherous Arctic reserves, and after making a few huge deals, it looks like it now has the resources needed to do so.
Russia’s Arctic is estimated to have 25 to 30 billion tons of recoverable oil reserves, which is stunning when you consider there are around 359 billion proven reserves worldwide, including shale oil and oil sands. The only problem is that the Arctic reserves are incredibly hard to exploit, as we saw with Shell’s platform disaster earlier this year. Fields in the Kara and Barents Seas are stuck in incredibly cold and rough seas, and the huge reserves in Siberia’s Laptev, East Siberian, and Chuckchi Seas are additionally separated from population centers by thousands of miles of tundra.
Those vast oil and gas fields aren’t impossible to tap, just expensive. With oil platforms in the farthest reaches estimated to cost somewhere between $5 billion and $8 billion apiece, it should come as no surprise that the Arctic has remained quiet this long. (It’s also a reason why Soviet scientists wanted to melt the whole thing.) Continue reading
Global Geopolitics 