Arctic Draws International Competition for Oil

August 26,2015

HOUSTON— A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control.

Energy is a big part — but not the only part — of the North Pole prize.

Rice University professor Bill Arnold just returned from his latest fishing trip to Alaska, where he captured photos of unspoiled nature.

“It is the only place I have ever been that is like this, so I am very interested in the preservation of the beauty of Alaska,” said Arnold.

But as a former Shell oil executive, he said he believes new energy resources can be developed without harming nature, unlike environmentalists, who denounce U.S. oil company projects in the Arctic and express disappointment in the Obama decision.

Fossil fuels

The opening of the Arctic results from ice being melted by global warming, which scientists conclude is caused in large part by emissions from burning fossil fuels, like oil, which the Arctic holds in abundance.

“Probably 25 percent of the undiscovered oil and gas in the world is in the Arctic,” Arnold said.

Russia has territory that borders about half of the Arctic region, and it sees the polar region as vital for its own energy production.

“I think their view is that as the traditional resources are dwindling, they need to find new resources and some of the greatest resources in the world are there,” said Arnold.

Russia’s development in the area slowed after Western nations imposed sanctions over Moscow’s annexation of Crimea from Ukraine, forcing Western-based companies to withdraw from partnerships with Russia.

Arctic opening

Arnold says the opening of the Arctic, however, has other strategic aspects.

He said Russia has a substantial military presence in the region, unlike the United States, which has a much smaller Arctic exposure.

And he said many countries are developing navigation projects for Arctic waters once they are ice free.

“The potential of it is really untested and unknown at this point, but to be able to have that circumnavigation in a relatively tight range in that area could be profoundly important,” said Arnold.

As for U.S. energy production, Arnold said it likely will be seven to 10 years before Shell’s exploratory efforts begin to pay off with large-scale production.