The Coming Arctic Boom: As the Ice Melts, the Region Heats Up
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No wonder everyone from the head of the U.S. Chamber of Commerce to the president of the Natural Resources Defense Council to the chairman of the Joint Chiefs of Staff (along with every living secretary of state) has argued that the United States should ratify unclos. It is far past time for the Senate to follow their advice. Skeptical Senate Republicans have stood in the way of ratification, arguing that the treaty would place limits on U.S. sovereignty. But that argument is a red herring, since the United States already follows all of the treaty’s guidelines anyway, and ratifying it would in fact give Washington new rights and greater influence. There are probably enough votes from moderate Republicans for the treaty to pass, if the president decided to make ratification a priority.
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The good news is that it’s not too late to play catch-up. The first and most obvious place for the United States to start is to finally join the 164 other countries that have acceded to unclos. Ironically, Washing- ton had a hand in drafting the original treaty, but Senate Republicans, making misguided arguments about the supposed threat the treaty poses to U.S. sovereignty, have managed to block its ratification for decades. The result has been real harm to the national interest.
UNCLOS allows countries to claim exclusive jurisdiction over the por- tions of their continental shelves that extend beyond the 200-nautical- mile exclusive economic zones prescribed by the treaty. In the United States’ case, this means that the country would gain special rights over an extra 350,000 square miles of ocean—an area roughly half the size of the entire Louisiana Purchase. Because the country is not a party to unclos, however, its claims to the extended continental shelf in the Beaufort and Chukchi seas (and elsewhere) cannot be recognized by other states, and the lack of a clear legal title has discouraged private firms from exploring for oil and gas or mining the deep seabed. The failure to ratify unclos has also relegated the United States to the back row when it comes to establishing new rules for the Arctic. Just as traffic through the Bering Strait is growing, Washington lacks the best tool to influence regulations governing sea-lanes and protecting fisheries and sensitive habitats. The treaty also enshrines the international legal principle of freedom of navi- gation, which the U.S. Navy relies on to project power globally.
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The ice was never supposed to melt this quickly. Although climate scientists have known for some time that global warming was shrinking the percentage of the Arctic Ocean that was frozen over, few predicted so fast a thaw. In 2007, the Inter- governmental Panel on Climate Change estimated that Arctic summers would become ice free beginning in 2070. Yet more recent satellite observations have moved that date to somewhere around 2035, and even more sophisticated simulations in 2012 moved the date up to 2020. Sure enough, by the end of last summer, the portion of the Arctic Ocean covered by ice had been reduced to its smallest size since record keeping began in 1979, shrinking by 350,000 square miles (an area equal to the size of Venezuela) since the previous summer. All told, in just the past three decades, Arctic sea ice has lost half its area and three quarters of its volume.
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Just a half decade ago, the scramble for the Arctic looked as if it would play out quite differently. In 2007, Russia planted its flag on the North Pole’s sea floor, and in the years that followed, other states also jock- eyed for position, ramping up their naval patrols and staking out ambitious sovereignty claims. Many observers—including me—predicted that without some sort of comprehensive set of regulations, the race for resources would inevitably end in conflict. “The Arctic powers are fast approaching diplomatic gridlock,” I wrote in these pages in 2008, “and that could eventually lead to . . . armed brinkmanship.”
But a funny thing happened on the way to Arctic anarchy. Rather than harden positions, the possibility of increased tensions has spurred the countries concerned to work out their differences peacefully. A shared interest in profit has trumped the instinct to compete over territory. Proving the pessimists wrong, the Arctic countries have given up on saber rattling and engaged in various impressive feats of cooperation. States have used the 1982 un Convention on the Law of the Sea (unclos)—even though the United States never ratified it—as a legal basis for settling maritime boundary disputes and enacting safety standards for commercial shipping. And in 2008, the five states with Arctic coasts—Canada, Denmark, Norway, Russia, and the United States—issued the Ilulissat Declaration, in which they promised to settle their overlapping claims in an orderly manner and expressed their support for unclos and the Arctic Council, the two international institutions most relevant to the region.
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It also includes massive oil and gas deposits—the main reason the region is so economically promising. Located primarily in western Siberia and Alaska’s Prudhoe Bay, the Arctic’s oil and gas fields account for 10.5 percent of global oil production and 25.5 percent of global gas production. And those numbers could soon jump. Initial estimates suggest that the Arctic may be home to an estimated 22 percent of the world’s undiscovered conventional oil and gas deposits, according to the U.S. Geological Survey. These riches have become newly accessible and attractive, thanks to retreating sea ice, a lengthening summer drilling season, and new exploration technologies.
Private companies are already moving in. Despite high extraction costs and regulatory hurdles, Shell has invested $5 billion to look for oil in Alaska’s Chukchi Sea, and the Scottish company Cairn Energy has invested $1 billion do the same off the coast of Greenland. Gazprom and Rosneft are planning to invest many billions of dollars more to develop the Russian Arctic, where the state-owned companies are partnering with ConocoPhillips, ExxonMobil, Eni, and Statoil to tap remote reserves in Siberia. The fracking boom may eventually exert down- ward pressure on oil prices, but it hasn’t changed the fact that the Arctic contains tens of billions of barrels of conventional oil that will one day contribute to a greater global supply. Moreover, that boom has also reached the Arctic. Oil fracking exploration has already begun in northern Alaska, and this past spring, Shell and Gazprom signed a major deal to develop shale oil in the Russian Arctic.
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Then there are the minerals. Now, longer summers are providing additional time to prospect mineral deposits, and retreating sea ice is opening deep-water ports for their export. The Arctic is already home to the world’s most productive zinc mine, ￼￼￼￼￼￼￼￼￼￼Red Dog, in northern Alaska, and its most productive nickel mine, in Norilsk, in northern Russia. Thanks mostly to Russia, the Arctic produces 40 percent of the world’s palladium, 20 percent of its diamonds, 15 percent of its platinum, 11 percent of its cobalt, ten percent of its nickel, nine percent of its tungsten, and eight percent of its zinc. Alaska has more than 150 prospective deposits of rare-earth elements, and if the state were its own country, it would rank in the top ten in global reserves for many of these minerals. And all these assets are just the beginning. The Arctic has only begun to be surveyed. Once the digging starts, there is every reason to expect that, as often happens, even greater quantities of riches will be uncovered.
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No region so rich in resources, both real and man-made, can avoid attracting the attention of China for long. Indeed, right on cue, Beijing has begun a concerted effort to make inroads in the Arctic—especially in Iceland and its semiautonomous neighbor, Greenland—with far- reaching geopolitical implications. In May, the Arctic Council granted observer status to China, along with India, Italy, Japan, Singapore, and South Korea.
China sees Iceland as a strategic gateway to the region, which is why Premier Wen Jiabao made an official visit there last year (before heading to Copenhagen to discuss Greenland). China’s state-owned shipping company is eyeing a long-term lease in Reykjavik, and the Chinese billionaire Huang Nubo has been trying for years to develop a 100-square-mile plot of land on the north of the island. In April, Iceland signed a free-trade deal with China, making it the first European country to do so. Whereas the United States closed its Cold War–era military base in Iceland in 2006, China is expanding its presence there, con- structing the largest embassy by far in the country, sending in a constant stream of businesspeople, and dispatching its official icebreaker, the Xue Long, or “Snow Dragon,” to dock in Reykjavik last August.