Search for Resources at the Top of the World

Stephen DeAngelis

June 07, 2011

Joseph Spears reports that the Arctic region “includes a rich basket of natural resources.” [“The Snow Dragon Moves into the Arctic Ocean Basin,” The Global Realm, 8 February 2011] He continues:

“The U.S. Geological Survey estimates that 25 percent of the world’s undiscovered hydrocarbon resources are found in the Arctic region along with 9 percent of the world’s coal along with other economically critical minerals.”

Although this is not breaking news, Arctic resources are a hot topic because climate change is making access to them much easier. The focus of Spears article is China’s interest in those resources. He notes, “In a warming and changing Arctic, China is stepping up its activities in the Arctic Ocean Basin.” He continues:

“While China’s interests and policy objectives in the Arctic Ocean Basin remain unclear, Beijing is increasingly active and vocal on the international stage on issues that concern the region. To that end, China is actively seeking to develop relationships with Arctic states and participate in Arctic multilateral organizations such as the Arctic Council. … The Arctic Council, is a high-level intergovernmental forum which addresses issues faced by the Arctic governments and the indigenous people The Arctic Council states include Canada, Iceland, Russia, Denmark, the United States and Norway Finland and Sweden. The Arctic Council allows [a] number of observers to attend the Arctic Council and [China] almost became an observer in 2008. Since that time China, Korea Japan and Italy [have attended as] ad hoc observers. Full membership is reserved for Arctic countries and indigenous groups.”

Spears draws the headline for his article from the name of “the world’s largest non-nuclear research icebreaker, Xue Long (Snow Dragon).” He reports that the icebreaker “has embarked on four Arctic research expeditions in recent years into Arctic waters.” Spears writes, “This is part of China’s larger polar scientific research effort which has seen 26 expeditions in the Arctic and Antarctic since 1984.” In a more recent article, Wenell Minnick reported, “As polar ice caps melt, China is preparing to take advan­tage of potential opportunities that have broad national security im­plications, including new shipping routes along the Arctic rim and massive hydrocarbon reserves of oil and gas under the Arctic.” [“Ice Station Dragon: China’s Strategic Arctic Interest,” Defense News, 16 May 2011]. Minnick continues:

“Though most international envi­ronmental groups see the melting of the polar ice caps as a disaster, China is seeing an opportunity, said Wang Kuan-Hsiung, a re­searcher at National Taiwan Nor­mal University. The Arctic will be largely ice-free in the summers within a decade, he said, and China views potential new shipping routes along the Arc­tic rim as a way of avoiding maritime piracy and cutting costs with shorter routes to Europe. Beijing has had security con­cerns over the sea lanes of com­munication. China is dependent on oil and gas shipments from the Middle East. Potential choke points in the Malacca Strait and territorial disputes in the South China Sea have added to the con­cern. For the first time in China’s modern naval history, it has taken up anti-piracy patrols in the Gulf of Aden to ward off Somali pirates. Though an Arctic passage would do little to solve security concerns over oil and gas shipments from the Middle East, it would provide a shorter route for China’s exports to Europe. It is estimated that the maritime route between Asia and Europe could be reduced from 15,000 miles to less than 8,000 miles, Wang said.”

To learn more about potential northern shipping routes, read my post entitled Supply Chains and the Northwest Passage. To learn more about the piracy challenge, read my post entitled Shiver Me Timbers — A New Age of Piracy. Minnick notes that, even if new northern trade routes open, “it is un­clear whether Chinese vessels will be allowed access to both the Northwest Passage, controlled by Canada and the U.S., and the Northeast Passage, controlled by Russia.” China’s larger goal is to maintain the Arctic as an international resource and it could “challenge Canadian claims of historical sov­ereignty over the Arctic in general and the Northwest Passage in particular.” Minnick continues:

“In an effort to enhance its inter­national position, China has estab­lished three polar research sta­tions: the Great Wall Station and the Zhongshan Station in the Antarctic, and Yellow River Station at Ny-Alesund in Norway’s Sval­bard archipelago in the Arctic. China also operates the MV Xue­long (Snow Dragon) polar re­search vessel, which has come un­der scrutiny by Taiwan authorities. In 2005, Taiwan frigates chased the Snow Dragon out of the island’s territorial waters for alleged spy­ing. The vessel was allowed a goodwill visit to Taiwan in 2009, but ordered to turn off electronic monitoring equipment before en­tering Kaohsiung harbor. China has also been paying close attention to Iceland, where Beijing has established a large embassy and has been in discussions with Reykjavik officials about the cre­ation of a major Arctic shipping hub on Iceland, Wang said. China wants the Arctic sea pas­sages declared ‘international terri­tory’ or the ‘shared heritage of hu­mankind,’ Wright said. Beijing’s ‘nightmare scenario’ is that the A5 or five Arctic littoral states — Canada, Denmark, Norway, Russia and the United States — will agree to exclude China and ‘divvy up the region’s resources.'”

As noted earlier, those resources include: oil, natural gas, coal, iron, phosphate, peat, and non-ferrous metals.” It’s not just China that could create controversy in the region. Joby Warrick and Juliet Eilperin report, “As glaciers defrost and ice floes diminish, the North is being viewed as a source of not only great wealth but also conflict, diplomats and policy experts say.” [“Warming Arctic opens way to competition for resources,” Washington Post, 15 May 2011] Warrick and Eilperin continue:

“In recent months, oil companies have begun lining up for exploration rights to Baffin Bay, a hydrocarbon-rich region on Greenland’s western coast that until recently was too ice-choked for drilling. U.S. and Canadian diplomats have reopened a spat over navigation rights to a sea route through the Canadian Arctic that could cut shipping time and costs for long-haul tankers. Even ownership of the North Pole has come into dispute, as Russia and Denmark pursue rival claims to the underlying seabed in hopes of locking up access to everything from fisheries to natural gas deposits. The intense rivalry over Arctic development was highlighted in diplomatic cables released last week by the anti-secrecy Web site Wikileaks. Messages between U.S. diplomats revealed how northern nations, including the United States and Russia, have been maneuvering to ensure access to shipping lanes as well as undersea oil and gas deposits that are estimated to contain up to 25 percent of the world’s untapped reserves. In the cables, U.S. officials worried that bickering over resources might even lead to an arming of the Arctic.”

The Arctic Ocean is the smallest of the world’s oceans. A quick glance at a map from a top-of-the-world perspective highlights why a northern passage and access to resources there would be game changing. Warrick and Eilperin report that one leaked 2009 State Department cable quoted a Russian ambassador as saying, “While in the Arctic there is peace and stability, however, one cannot exclude that in the future there will be a redistribution of power, up to armed intervention.”

Arctic Ocean 03

It was exactly that kind of talk that led to “an extraordinary diplomatic gathering … in Greenland’s tiny capital Nuuk” in early May. Although it was the annual meeting of the Arctic Council, it was extraordinary in that it was attended by two U.S. cabinet members, Secretary of State Hillary Rodham Clinton and Secretary of the Interior Secretary Ken Salazar, and resulted in “the first legally binding treaty in its history, a pact that sets the rules for maritime search and rescue in the region.” Warrick and Eilperin report, “Although modest in scope, the treaty, authored mainly by Russia and the United States, was hailed as a template for future agreements on issues ranging from oil-spill cleanup to territorial disputes.” Following the meeting, Secretary Clinton stated, “The challenges in the region are not just environmental. The melting of sea ice, for example, will result in more shipping, fishing and tourism, and the possibility to develop newly accessible oil and gas reserves. We seek to pursue these opportunities in a smart, sustainable way that preserves the Arctic environment and ecosystem.”

According to Warrick and Eilperin, another significant outcome from the meeting was the vote “to establish a permanent secretariat to the council, to be located in Tronso, Norway. Clinton asserted that the region’s powers must recognize the council as the ‘preeminent intergovernmental body, where we can solve shared problems and pursue shared opportunities.'” From China’s perspective, the move to establish a permanent secretariat is probably viewed as a power grab to ensure that Arctic sea pas­sages don’t become international terri­tory and/or that the region’s resources aren’t declared a shared heritage of hu­mankind.

With so much attention now being given to the Arctic region, retired General Joe Ralston insists that the U.S. should no longer view itself “as a nation bounded by two great oceans.” He writes, “The world has changed. The Arctic Ocean is no longer optional. In fact, it has become our nation’s third great ocean border – and the opportunity of a lifetime.” [“From sea to shining sea to Arctic Ocean,” Washington Times, 13 May 2011] He continues:

“The Arctic is of strategic importance to national security, global commerce and climate, and in meeting the world’s energy needs. Cooperation in the neighborhood now can prevent conflicts later over sovereignty, shipping, the environment, energy and national security. … The Arctic nations are preparing claims to take control of extended continental shelves that could carve up the Arctic Ocean floor – almost to the North Pole. Shipping is expanding exponentially. Russia’s northern-route shipping volume is predicted to increase 500 percent this year over last, and Russia is granting permits for foreign vessels to transit its northern route. Eager to show its interest, China is allocating more to polar research, even going so far as to send an icebreaker north of Alaska last summer and north of Iceland this summer to do reconnaissance on shipping routes. Other nations, such as South Korea, also are gearing up because the northern routes can save billions of dollars in time, fuel and piracy problems.”

The General concludes, “We’re watching history being made.” Because there is so much at stake, the Arctic region is going to be an interesting hot spot to watch over the coming decades.