Climate Change and Natural Resources, Economy

The Arctic Gold Rush: How Global Warming can lead to increased global energy security

At the end of August, NASA delivered a statement, later confirmed by the American National Snow and Ice Data Centre (NSIDC), as well as the Norwegian Polar Institute (NPI), in which it stated that the extent of Arctic sea ice in 2012 has reached dramatically low levels.

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Since 1979, satellite recordings of the Arctic have provided valuable data on the annual variations of the region’s changing ice sheet. The Arctic ice sheet is in constant motion. It grows during the cold arctic winters, and shrinks during the warmer periods reaching peak melt in mid September. However, since the measurements began, a steady decline of 13 percent per decade has been noted.

Additionally, alternative ways of measuring the extent of Arctic ice, such as sonar scans performed by submarines and seabed tethered buoys, have indicated to a drop in the thickness of the ice by over 40 percent compared to the levels recorded in the 1980s. Combining the loss in extent as well as in thickness, the total volume of Arctic ice is now a mere third of what it was in the 1980s.

There is widespread consensus amongst the specialist in the organizations previously mentioned, that this process will accelerate even further during the coming years. The increased surface of open water lowers Earth’s reflectivity allowing for more heat to be trapped in the atmosphere, further accelerating the rise of ocean water temperature. This has not only an impact on the speed with which the ice melts, but also on the increasing amount of released methane previously stored in the frozen seabed of the Arctic Ocean. Additionally, the increase in size of open water, allows storms to generate larger waves which further break up the remaining ice sheet and accelerate its melt.

Though there is no consensus on the matter regarding a close approximation of the time that this will happen, scientist and experts do agree however, that the Arctic will become ice free by the end of this century.  However, the main issue here is not whether the Arctic will be ice free in ten years time, or in fifty. Rather, the important question is what the implications of an ice free Arctic are for the region and the world in general.

For the region itself the loss of the ice sheet means a catastrophe for indigenous life forms such as polar bears which rely on its existence for hunting and breeding purposes. With relatively little time available for adaptation, it is highly possible animals such as these will become extinct within our lifetime. With the destruction of local flora and fauna, the lives of indigenous people dependent on it such as the Inuit’s will also be threatened. The tourism industry too will feel the negative impact of the changing landscape of the region, and especially of that of the local wildlife on existence of which it predominantly relies.

The impact that an ice free Arctic will have on the world will be much greater however. Early work suggests that a reduction in the amount of ice in the Arctic, will have a significant impact on the path of the jet stream. Jest stream, is a high altitude wind that guides weather systems such as storms, and is governed by the temperature difference between the Arctic and Tropics. On the European level, this would mean an increase in precipitation along its northern regions, and a decrease in precipitation in its southern regions. This is already noticeable. This year’s summer in the UK has been hailed as the wettest in as long as a century, and follows a series of above average years for summer rainfall. Such shifts materialise in the form of floodings, crop damage and widespread disruption to travel and public services such as the provision of electricity and gas.

Warming of the surrounding water mass might further accelerate the speed with which Greenland’s glaciers will melt, increasing global sea levels as well as reducing the overall salinity of world’s oceans.  This in turn will alter ocean currents which help govern the global climate. The change in weather patterns will have a devastating impact on world agricultural production, in turn leading to an increase in the prices of food on the international market. The ongoing draught in the US, the world leading exporter of basic food staples, is already taking its toll on the prices of such staples as corn, soybeans or wheat.

In the poorer parts of the world, a drastic spike in the price of food may lead to widespread disorder, having the potential of turning into open revolutions or even civil wars. The deeper connotations underlining Mohamed Bauazizi’s self immolation for example, the Tunisian street vendor who set himself on fire in 2010 in protest to the inequalities and poor living conditions can be linked to the rising food prices, and the increasing dependency of poor countries on foreign manufactured products. Such an act, as we saw, can have a devastating impact on stability and security of not only one nation, but an entire region.

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However, as strange as this may seem, Global Warming and the melting of Arctic ice can also bring substantial gains to the global community. In some parts of the Arctic Ocean, the lack of ice is already proving beneficial for commerce due to the emergence of new, more accessible shipping lanes. An ice free Arctic could potentially reduce the distance of shipping goods between East Asia and Europe by at least 25 percent, allowing for a substantial reduction in transit costs, as well as for an increase in overall trade volume between the two regions considerably boosting income and development.

Arctic’s greatest potential, however, lies with the substantial amount of natural resources it has to offer. Experts and scientists have recognised long ago that the region is rich in resources, especially oil and natural gas, but did not realise how exactly rich the region is until 2009. Multiple detailed surveys undertaken since indicate that the Arctic holds at least 30 percent of the world’s undiscovered natural gas reserves, as well as at least 13 percent of remaining petroleum reserves. The US Geological Survey (USGS) estimates that up to 160 billion barrels of petroleum lie available beneath the Arctic seabed. Putting that into perspective, it is almost as much as Canada’s petroleum reserves alone, the third richest country in terms of proven petroleum reserves according to the CIA World Factbook, or as much as the US’, Qatar’s, Kazakhstan’s, Nigeria’s and Libya’s current oil reserves put together.  Additionally, most of the reserves are estimated to be in less than 500 meters of water, making extraction feasible and relatively cheap due to the use of conventionally fixed platforms as opposed to the more technologically demanding and much more expensive Spar or Semi-submersible platforms used in deeper waters.

The availability of new, relatively cheap and accessible deposits of energy resources is seen by many as amongst the most important, if not the most important factor in maintaining international stability in the 21st century. According to the US Energy Information Agency’s (EIA) estimates published in 2011, global energy consumption will likely to grow 53 percent between 2008 and 2035 alone. Most of this growth in energy consumption will occur outside the Organization for Economic Cooperation and Development (non-OCED countries), where demand will be driven by strong long term economic growth, and will predominantly focus on the growing use of petroleum and natural gas. Energy use in these countries will increase by almost 90 percent, putting competition and access to cheap and stable energy reserves at the top of numerous national security agendas. According to the agency’s prediction, consumption of natural gas in these countries will increase by 52 percent from 111 trillion cubic feet to 169 trillion cubic feet, and the consumption of petroleum by 31 percent from 85.7 million barrels per day to 112.2 million barrels per day.

With fossil fuel energy reserves being finite, and current petroleum reserves running at peak efficiency, it its understandable that the Arctic and its seas are seen as being of crucial importance to energy security. The International Energy Agency (IEA) refers to energy security as the uninterrupted availability of energy sources at an affordable price. Energy security has two main aspects. Long term security is mainly linked to timely investments to supply energy in line with development and environmental needs. Short term energy security on the other hand, focuses on the ability of the energy system to react promptly to sudden changes in the balance between supply and demand. With over 57 percent of the world’s petroleum production originating in the Middle East and North Africa, regions prone to instability and conflict, it is imperative that new long term energy related development should be undertaken in resource rich regions to strengthen short term energy security which could be undermined by possible price surges and a supply disruptions caused by crises in these regions.

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All of the five major countries that have competing territorial claims in the Arctic, as well as some of the largest transnational corporations related to them have already commenced investment related procedures designed to utilize the region’s riches. In the last four years alone, Shell for example has spent more than $4.5 billion on developing new offshore fields along the normally frozen Alaska coastline. Russia  has recently declared that it will plan to invest almost $1 trillion to develop its growingly accessible deposits in Siberia boosting its offshore overall production capabilities from the current 5 percent to over 20 percent by 2020. The state owned giant Rosneft has already forged bilateral partnerships with Norway’s Statoil, US’s Exxon Mobil and Italian’s oil giant Eni in order to further explore and develop the vast Arctic regions of the Russian Federation.

Additionally, even countries that historically have had little or no interest in the Arctic are now too shifting their attentions north. China has recently begun campaigning to become a permanent member of the Arctic Council, the most important intergovernmental body in the region which is the only organization that sets the agenda for Arctic affairs. Formed in 1996, the council comprises the eight and only countries with territorial possessions in the Arctic Circle. However, by surpassing the US as the biggest importer of petroleum by 2030 according to BP estimates, and already being the largest global overall energy consumer, it is not surprising that Beijing wants to play a larger role in shaping the region’s future. Similarly Germany has recognised the region’s importance for its own economy’s well being, and is beginning close cooperation with Canada as well as Greenland in order to obtain access to the deposits of Arctic natural resources.

There is no question that the exploration of Arctic resources will also bring a price in the form of environmental damage, or the decrease in renewable energy’s competitiveness due to the acquisition of relatively cheap conventional energy reserves. However, the very existence of such relatively accessible sources will prove invaluable for overall global stability in the 21st century, as well as for the continuation of the developmental process in the non-OECD countries due to the continued global reliance on hydrocarbons. As with anything, Global Warming has two sides, both a negative one as well as a positive one. Giving the fact that there is still no real international agreement on how to deal with the issue, and most likely will not be for the foreseeable future, let alone an existing policy framework that could in anyway mitigate its impact, the melting of Arctic ice comes as a benefit. Energy security is something that the world is currently in desperate need of, and will become even more so in the years to come when conventional areas of extraction will come under even greater pressure to sustain the world’s growing energy demand.

This article was also published in International Policy Digest

About Tomasz Iwankowski

Tomasz is a current BA student of International Relations and Politics at the University of Portsmouth. He is predominantly interested in macroeconomics, various aspects of the Global Political Economy such as energy, food, and trade, as well as in Chinese, Russian, and American foreign policies.


  1. Thought this was a really good overview of the issue. I especially like the geopolitical aspects of your argument as these could potentially have a more devastating short term impact on the region than some environmental factors and yet receive far less attention.

  2. A very informative post.

    The Arctic is an area where there could potentially be a conflict over resources, shipping routes etc., however the interesting thing is that this outcome is extremely unlikely. Although Canada’s PM Stephen Harper panders to voters by having CF-18s escort Russian TU-95 bombers away from Canadian airspace on a routine fly-by, and by visiting the Arctic yearly during the Canadian Military’s Operation Nanook, behind the scenes cooperation occurs. In the May 2011 Wikileaks dump Harper informed NATO that Canada has a good Relationship with its Arctic Rival: Russia, and currently there is a multinational effort to map the seabed under UN supervision so resource claims can be made through the courts rather than through force.

  3. Tomasz Iwankowski

    Thank you both for the good feedback. As you have noted the geopolitics of the issue are indeed both important and interesting. Though like stateofthecentury pointed out, a real conflict in the Arctic is highly unlikely. Any military engagement in the Arctic region would from a technological, strategic and planning point of view be extremely difficult to say the least. In addition, both countries, Canada and Russia do not in fact posses adequate military capabilities that would facilitate such a conflict. The military oriented rhetoric seen in both countries in my opinion is just a measure to satisfy both the public opinion and domestic actors that require both governments to appear as being in control regarding the issue. Same again on the cooperation front. It is in all of the region’s actors interest to facilitate cooperation as opposed to hostile competition, as it will be much more beneficial and cost effective in the long run.

  4. For anyone interested in reading more about the very interesting topic of Arctic policy, check out my article “In Defense of CCGS Diefenbaker – The Good and Bard of Harper’s Arctic Foreign Policy,” a focused review on Canada’s Arctic Foreign Policy specifically.

    Thanks for letting me recommend my post. I think Arctic policy is one of the most exciting topics for Canada currently.

  5. Dave

    Don’t you find it odd to have “global warming” and “security” in the same sentence?

  6. Surely there will be opportunities for further development of economic activities due to the impacts of climate change. But it is hard to see how those could one day balance the negative consequences that you describe yourself in this blog.

    Considering that we already have enough fossil fuels available in other regions of the world to push the climate beyond any reasonable point, it is hard to see how adding a few extra gigatons of carbon into the equation is going to bring us any closer from security.

    Also, it would be interesting to understand what you mean by “relatively cheap conventional energy reserves”. It seems that anyone attempting to drill in the Arctic is currently facing rather exponential costs and technical complications.

  7. Matteo Gagliardi

    A leaked report of the Fifth Assessment Report of the IPCC shows even higher scientific confidence (now 99 per cent, equivalent to the confidence in basic theories of physics such as those of gravity and thermodynamics) that global warming is happening and is caused by humans and the greenhouse gases they are emitting. Unless you disagree with this, it’s extremely ironic you suggest there is a silver lining amidst all of the negative aspects of global warming because it opens up extra opportunities for humans to exploit the energy reserves causing the emissions contributing to global warming in the first place.

    You also only refer to the negative consequences of Arctic melting, which merely constitute a limited range of the repercussions on global security caused by dangerous global warming (which both politicians and scientists have determined to be the increase of the global average temperature by more than 2 degrees Celsius). Along with the erosion of coral reefs and the submersion of small-island states by rising sea water levels, these are only the more immediate, currently noticeable problems of climate change. Global warming poses a huge challenge to global security in general (, let along energy security; one which will only be compounded if we exploit the oil deposits in the arctic.

    The International Energy Agency released its annual World Energy Outlook last month, in which it stated: “No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal”. Additionally, the report concluded that if we continue on down a business as usual pathway, we will end up with a 3.6 degree increase. So, unless you completely reject the scientific arguments behind anthropogenic climate change, or you perhaps disagree with the predictions scientists are making about the severity of its repercussions (which can already be seen with the melting of the Arctic’s ice sheets), or you’ve been caught in a circular argument of exploiting global warming in a way that contributes to creating further global warming.

    In my view, the answer to long term global energy security, and indeed to global security in general, is therefore to further securitise climate change because of the real and looming threats and challenges it poses for all of global energy, economic, geopolitical and resource security, and turn towards renewable, clean energy sources.

  8. Ken

    We won’t have to fight over fuel in the future but we will have to use the additional fuel available to fight over the dwindling food supplies caused by coastal flooding, the increasingly frequent droughts and flooding in food growing areas and increasing world population. Isn’t that good!!

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