The Arctic and its Resources
The Arctic and its Resources
The intertwined risks and opportunities for sustainable development
The Arctic is experiencing a dramatic transformation due to climate change, with the region warming four times faster than lower latitudes. This rapid warming has led to a staggering shrinking of Arctic sea ice. In 2018, a team including NOAA scientists discovered that very old Arctic sea ice had declined by 95% in the past 33 years. (Osborne, Richter-Menge, & Jeffries, 2018), (Hall, 2020). That means that summer sea ice could disappear entirely, and relatively soon—a dramatic change that would further warm the Arctic and the rest of the world. Sea ice keeps the planet cool by reflecting sunlight. Without it, the Arctic would warm rapidly, thawing Greenland’s glaciers (which would push sea levels higher) and melting global permafrost (which would release huge volumes of heat-trapping gases into the atmosphere).
As the world gazes upon the Arctic, it sees a paradox. On one hand, it is a delicate ecosystem, home to diverse wildlife and indigenous cultures that have thrived in harmony with nature for millennia. On the other hand, beneath its frozen surface lies a wealth of resources—from rare minerals to fossil fuels—useful for future innovations and economic prosperity.
Three key factors have been instrumental in driving resource exploitation in the Arctic. The first is global demand. The Arctic’s exploration began in earnest during the 17th and 18th centuries, as European explorers ventured north. Initially attracted by whaling opportunities, the region’s value soon expanded to include precious metals, like gold, silver, zinc, and copper, culminating in the famed Klondike Gold Rush. By the late 19th and mid-20th centuries, the discovery of coal, and more recently of oil and gas, had positioned the Arctic as a critical global resource base.
The second factor is availability. Despite the Arctic’s rich deposits, its exploitation and global mining share is relatively modest, except for palladium. The Russian Arctic, in particular, has a long history of palladium mining, with operations dating back 300 years and its palladium industry accounts for 40 percent of global production. (Arctic Review, n.d.) The extraction of nickel, copper, and cobalt in the Arctic is also a topic of growing interest due to the region’s rich resources.
The third factor is accessibility. Climate change has increasingly influenced the accessibility of Arctic resources, with melting sea ice and permafrost making deposits more reachable. Yet, the Arctic’s transformation is a double-edged sword. On one hand, it paves the way for the extraction of its resources, a potential boom for economic growth. However, this newfound accessibility raises significant environmental concerns, placing the fragile Arctic ecosystems and habitats under unprecedented pressure.
Let’s take a closer look at what these combined opportunities and risks mean for the future of the Arctic.
Strategic Shipping Routes
The melting Arctic ice is opening up new shipping channels, such as the Northern Sea Route (NSR), which could reduce shipping time between Europe and East Asia roughly from 35 to 25 days. This implies reducing trade costs and increasing trade value between Europe and East Asia by up to 6 per cent, which is a lot.
There will be winners and losers from the opening up of the Arctic sea routes. The biggest winners will be Northern Europe, China, Japan, and South Korea. However, the reduced travel time and distance of the NSR could potentially place ports like those in the Mediterranean, for example, or Suez at a competitive disadvantage. This could impact the port’s revenue and economic significance to the region. (Martins, 2023) (Gosnell, 2018)
It is important to note, though, that while the opening of the NSR presents challenges, it also may take time for significant shifts in shipping patterns to occur due to various factors, including unpredictable ice conditions, and the need for specialised ships. Nonetheless, it also poses challenges related to environmental protection, maritime safety, and geopolitical dynamics.
The Arctic is rich in oil, gas, coal, and various minerals, including non-ferrous and precious metals (copper, nickel, gold, diamonds, silver, zinc, and other rare-earth metals), which are crucial for the global economy.
Oil and Gas Resources
Experts estimate that the Arctic holds significant amounts of undiscovered oil and gas reserves, with over 70% of these reserves believed to be located offshore in regions across Russia, Scandinavia, and North America. The actual exploitation of these resources varies, with notable oil and gas production in areas like the Russian Yamal, which accounts for approximately 90 per cent of Russian national gas production, and the Alaskan North Slope, which makes a very important contribution to domestic US oil production.
The US Geological Survey suggests that the Arctic could hold about 13% of the world's undiscovered oil and 30% of its undiscovered gas. (Arctic oil and natural gas resources, 2012) The largest deposits are believed to be in the Arctic regions of Russia and Norway, making these areas key focal points for future exploration and development activities. (Gautier & et, 2009)
However, interest in exploring the Arctic is not limited to just the countries located in the Arctic. Many other countries and corporations are keen on gaining access to the resources found in this region. China, for instance, called itself an important stakeholder in Arctic affairs and geographically a “near-Arctic” state in its 2018 Arctic Policy White Paper. (China’s Arctic Policy, 2018)
Nevertheless, the technological issues, such as constructing the infrastructure and transporting resources in the Arctic, as well as the high costs of drilling, present significant challenges. The isolation of the region, the extreme weather, the presence of ice in the waters and the potential liabilities for clean-up and accidents, could outweigh the return on investment. Despite these concerns, Arctic governments continue to subsidize oil and gas production.
The World Wildlife Fund (WWF) suggests that these subsidies would be better spent on supporting renewable energy sources for Arctic communities. They advocate for a shift towards a future powered entirely by renewable energy, pointing out the advantages of such a move, like the development of new technologies and the creation of job opportunities. (WWF, n.d.)
Coal Resources
In addition to hydrocarbons, the Arctic region is abundant in coal reserves. This is especially true in specific areas, such as Svalbard in Norway and certain regions of Russia. People have been mining these coal reserves for more than a hundred years. Svalbard, in particular, has been a major location for coal mining since the 17th century.
In recent times, there has been a shift in focus towards more sustainable energy sources. This shift is partly due to environmental concerns and partly due to global competition, particularly from countries like China and Australia. Because of this shift, the extent of coal mining operations in the Arctic has decreased. Only the coal mines on the island of Spitsbergen in Svalbard run by the Russian company Arktikugol (it means Arctic coal) and the Norwegian ones in the archipelago of Spitsbergen are operational, but they are just a very minor part of global production, and no more projects are foreseen in the future.
Mineral Resources and Rare-Earth Elements
The Arctic is not just about oil and gas; it's also rich in a variety of minerals that are crucial for the global economy. It holds a lot of rare-earth elements (REEs), including neodymium, praseodymium, terbium, and dysprosium. REEs are crucial for the world's green transition. Because of their unique properties, they play a significant role in advancing renewable energy solutions, and electrifying transportation, thus supporting efforts to mitigate climate change and reduce reliance on fossil fuels.
The critical role of REEs in the green transition comes with challenges, including supply chain vulnerabilities, environmental concerns associated with mining and processing, and geopolitical tensions over resource control. These challenges highlight the importance of developing more sustainable and responsible sources of REEs, as well as recycling and alternative materials research, to support the ongoing global shift towards sustainable energy and transport systems.
Biological resources
Biological resources in the Arctic are abundant, with the Barents, Greenland, and Bering seas contributing approximately 10% of the world's marine catch, though overfishing poses a threat to sustainability. On land, reindeer or caribou provide essential meat for indigenous peoples, while large rivers flowing into the Arctic Ocean present opportunities for hydroelectric schemes.
However, the Arctic is now experiencing a dramatic shift. It’s warming at a rate that is twice the global average. This rapid change is not just a statistic; it’s a reality that is felt by the region’s cold-adapted creatures. As the icy world they’ve known is transforming beneath their feet, these animals are facing an unprecedented challenge. The pace of change is so fast that it’s outstripping their ability to adapt. This rapid transformation of their habitat is leaving them in a race against time, struggling to cope with the new environmental conditions.
And then there’s the permafrost, a layer of permanently frozen soil that’s now thawing. This not only changes the landscape but also triggers the decomposition of vast amounts of organic material. The result? A release of nutrients that could have far-reaching impacts.
Tourism
The Arctic region has seen a significant increase in tourism, attracted by its stunning natural landscapes, unique wildlife, and the opportunity to witness phenomena such as the Northern Lights and midnight sun. Tourism in the Arctic ranges from cruise ship voyages along the coastlines of Greenland and Canada to adventure tourism activities like dog sledging, ice fishing, and polar bear safaris in places like Svalbard.
While the growth of tourism brings economic benefits to local communities, it also poses risks to fragile Arctic ecosystems and the traditional way of life. The path forward demands a commitment from all stakeholders to responsible tourism and stringent regulations to ensure that the Arctic will continue to thrive as a sustainable and lively home for its indigenous people and local communities.
Indigenous People and Local Communities
Approximately 10% of the Arctic's four million inhabitants are indigenous peoples (over 40 different ethnic groups), who face disproportionate risks because of climate change. These changes significantly affect traditional harvesting activities, making hunting more dangerous due to rapid weather changes and thinning ice. (Coggins, Ford, & et, 2021)
Disappearing sea ice impacts species crucial for indigenous livelihoods, such as polar bears, seals, whales, and fish stocks, while coastal communities grapple with housing, infrastructure, and transport challenges.
Indigenous people have a specific connection to the land that they have inhabited. While the extraction of Arctic resources offers substantial economic opportunities, including job creation, infrastructure development, and increased connectivity, it also poses significant risks for the local communities, such as environmental degradation, socio-economic challenges, and geopolitical tensions. (Arctic Indigenous Peoples, n.d.)
Sustainable Development
Sustainable development in the Arctic demands a comprehensive and nuanced approach that balances economic interests with environmental protection and community welfare. This complex interplay requires us to thoughtfully weigh the economic allure of the Arctic resources with the imperative of preserving its unique and fragile environment for the benefit of future generations.
The pathway to achieving this equilibrium is multifaceted. It involves developing and using technological innovations that minimize ecological impact, fostering international cooperation, and rigorously adhering to regulatory frameworks like the Polar Code and the Arctic Council Agreements. These measures are essential for identifying and mitigating the risks that are associated with Arctic development.
However, there is a pressing need to support sustainable practices that go beyond traditional resource extraction. By prioritising renewable energy, promoting eco-tourism, and advocating for responsible mining practices that minimize their environmental impact and prioritize a fair division of economic benefits, it is possible to introduce a model that ensures the region’s long-term viability and prosperity.
The Arctic is facing unprecedented challenges, putting its fragile ecosystem at risk. In the pursuit of sustainable development, we must adopt a broader perspective – one that is guided by our common humanity. This approach requires us to make choices that serve our immediate needs while also safeguarding the interests of future generations. So, the question remains: at what cost does progress come, and are we prepared to pay the price?
Sources and References
Arctic Indigenous Peoples. (n.d.). Retrieved from Arctic Centre, University of Lapland: https://www.arcticcentre.org/EN/arcticregion/Arctic-Indigenous-Peoples
Arctic oil and natural gas resources. (2012, January 20). doi:https://www.eia.gov/todayinenergy/detail.php?id=4650
Arctic Review. (n.d.). Retrieved from Economy_Minerals and mining: https://arctic.review/economy/minerals-and-mining/
China’s Arctic Policy. (2018, January 26). The State Council, the People’s Republic of Chin. Retrieved from University of Alaska Fairbanks, : https://www.uaf.edu/caps/resources/policy-documents/china-arctic-policy-2018.pdf
Coggins, S., Ford, D. J., & et, a. (2021, February 23). Indigenous Peoples and Climate Justice in the Arctic. Retrieved from Jourgetown Journal of International AFFAIRS : https://gjia.georgetown.edu/2021/02/23/indigenous-peoples-and-climate-justice-in-the-arctic/
Gautier, D. L., & et, a. (2009). Assessment of Undiscovered Oil and Gas in the Arctic. Science, 324, 1175-1179. doi:https://doi.org/10.1126/science.1169467
Gosnell, R. (2018, June 25). Caution in the High North: Geopolitical and Economic Challenges of the Arctic Maritime Environment. War on the Rocks. doi: https://warontherocks.com/2018/06/caution-in-the-high-north-geopolitical-and-economic-challenges-of-the-arctic-maritime-environment/
Hall, S. (2020, May 22). These researchers spent a winter trapped in Arctic ice to capture key climate data. Nature. doi: https://www.nature.com/immersive/d41586-020-01446-x/index.html
Martins, T. T. (2023, November 24). Arctic Ambitions: China’s Engagement With the Northern Sea Route. The Diplomat. Retrieved from https://thediplomat.com/2023/11/arctic-ambitions-chinas-engagement-with-the-northern-sea-route/
Osborne, E., Richter-Menge, J., & Jeffries, M. (2018). Effects of persistent Arctic warming continue to mount. NOAA. Retrieved from https://arctic.noaa.gov/report-card/report-card-2018/executive-summary-5/
WWF. (n.d.). Oil and Gas. Retrieved from WWF: https://www.arcticwwf.org/threats/oil-and-gas/