The Hindu Business Line : Race for the pole position

Five nations are scrambling to lay claim to the huge reservoirs of crude oil beneath the seabed under the Arctic ice. As much as with one another, these nations will have to contend with the indigenous people, the Inuit, who want a say in the matter.

J. Srinivasan

Nothing seems to rev up international relations as quickly as oil. The US, Russia, Denmark, Norway and Canada are now racing to the seabed on top of the world, looking for what is thought to be a significant reservoir of crude oil. Since August 2, when a Russian submarine planted a flag on the seabed, 13,000 feet below the surface, the five nations that divided up the Arctic’s outer ring among themselves based on a 1982 UN convention are now circling for the middle.< /p>

The Russian submarine was quickly followed by Danish icebreakers to survey potential claims in the far north, where a US Coast Guard ice-breaker is already on a mapping mission. Canada has announced it will build two military outposts in the region.

All the five states can be expected to post a claim to a part of the Arctic seabed 90 per cent of which remains unclaimed. The draw is the increasing prospect of oil and gas exploration with global warming melting much of the Arctic’s ice cover. According to the US Geological Survey, the region may contain 25 per cent of the world’s remaining oil and gas reserves. According to a USGS report, the coastal areas represent the 19th most important oil reservoir in the world. The estimate being about 31 billion barrels not far off Greenland’s eastern coast.

But can nations make such claims? Indeed, the UN Convention on the Law of the Sea allows states to make claims beyond 200 nautical miles if the seabed can be shown to be an extension of their continental shelf. All the claimants except the US have ratified the Convention.

The Convention has time limits for making claims, based on when a nation ratified the treaty. Russia, which did so early, submitted a claim to the North Pole and 1.2 million sq km of seabed in 2001, saying that the underwater Lomonosov Ridge is an extension of its continental shelf. Canada and Denmark have until 2013 and 2014, respectively, to submit counterclaims. Once it ratifies the convention, the US has 10 years to claim a large area adjacent to the Alaskan shelf.

Diplomatic challenge

With the Commission on the Limits of the Continental Shelf, a body created by the Law of the Sea Convention, out of the picture, as more than one state has staked a claim to the Arctic, resolving the dispute could be a major diplomatic challenge to the five nations. But they can — like France, Ireland, Spain, and Britain in the case of their claims on the shelf off the Bay of Biscay — decide to submit their claim jointly and subdivide it later. Or, do as all the 46 nations claiming the Antarctic have — put the claims on hold indefinitely under a 1959 Treaty. But international legal experts see in the Russian flag planting a “powerful symbolic act”; Moscow would appear to be taking the Arctic carve-up seriously and looking for a bear’s share.

As much as one another, these nations will have to contend with the indigenous people, the Inuit, who want a say in the matter. According to a Christian Science Monitor report by Colin Woodward, Aqqaluk Lynge, president of the Greenland chapter of the Inuit Circumpolar Council (ICC), told an international gathering of politicians, scientists, and religious figures that, “We must develop, for the sake of my people and the world at large, a formal international process focusing on the Arctic that includes indigenous people having meaningful voices… (else) we might just get washed away in the melting ice.” The Inuit have lived in the Arctic for thousands of years. Now, some 160,000 Inuit live in Alaska, northern Canada, easternmost Russia, and Greenland. Since the 1980s, they have argued for the central Arctic to be set aside as a demilitarised zone, much as Antarctica is, and for free travel by the Inuit people.

While nobody lives in the contested region around the North Pole, Inuit leaders say activities there will affect their communities, some of which are only a few hundred miles away. As the Christian Science Monitor report said, increased shipping over the Pole or through the Northwest Passage could disrupt ice cover and the migration patterns of animals that hunters rely on.

Military activities might mean more environmental and cultural degradation. Then there’s the possibility of oil spills, if petroleum is indeed found. Greenland’s Inuit seem best placed to stake a claim. They constitute 90 per cent of the 56,000 people living in Greenland, where they control the local government and where Greenlandic is the official language.

Denmark, which administers the island, has given it a carte blanche to independence; the island’s economic viability is the only sticking point.

Greenland’s claim

“We are launching a claim in the Arctic only on behalf of the Greenlanders,” who would inherit any of Denmark’s Arctic territory once they become independent, the Christian Science Monitor report quoted Svend Auken, a veteran Danish politician and former energy minister, as saying.

Experts from the Geological Survey of Denmark and Greenland (GEUS) are conducting studies to see whether the Lomonosov Ridge is geologically connected to Greenland. If it is, then Denmark can claim up to 200,000 sq km of sea which currently lies outside Greenland’s territorial waters. Denmark has seven years to prove that the Danish flag should fly over the area. If successful, Denmark will not only obtain rights to potential mineral wealth below the crust, it will also be allowed to claim the North Pole.

Aleqa Hammond, minister for finance and foreign affairs of Greenland’s home rule government, has no doubts in that regard. “The Russians came and planted their flag up there on the North Pole, but everyone knows it’s Greenlandic,” she told Christian Science Monitor. “The last land before you reach the pole is Greenlandic land.”

Yet all is not hunky-dory between Denmark and Greenland as the potential oil wealth could trigger differences in the Self-Rule Commission which identified oil exploration as a means of diversifying the local economy and reducing dependence on Denmark’s annual DKK 3.2-billion block grant to fund public finances.

According to a Copenhagen Post report, The commission agreed on a basic formula in which Greenland would receive the first DKK 75 million earned from oil exploration.

Any revenues above that amount would be split evenly and go toward phasing out the block grant. The SRC also agreed that Greenland could establish state-owned companies that conducted oil exploration on a commercial basis, much like Denmark’s oil and natural gas supplier, Dong.

However, the two sides had differing definitions of ‘revenue’. Denmark argued that Greenland’s revenues from a national oil and gas company would be subtracted from the block grant. In that case, the Greenlandic side wanted Dong’s revenues in Greenland taken into account as well.

There the matters rest. As Kuupik Kleist, a member of the Greenlandic delegation, told Copenhagen Post: “Oil exploration has always been a problematic issue wherever you find it in the world.”

(The author is a Business Line Deputy Editor on sabbatical in Denmark.)