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Arctic Opportunity

relates to Arctic Opportunity
Photographer: Eric Welch
Updated on

A new ocean has begun pooling around the North Pole, and the world has taken notice. The Arctic is warming twice as fast as the rest of the globe, melting sea ice and opening access to natural resources long stuck in deep freeze. The opportunities are great: fossil and renewable energy, metals and minerals, fisheries, shipping routes, subsea telecom cables, ports, pipelines and power grids. So are the risks in what remains a harsh environment. The stakes go beyond money and include the well-being of indigenous communities, a clean environment and regional peace. 

The most immediate focus has been on unlocking oil and gas. The U.S. Congress lifted decades-old restrictions on oil and gas drilling in the Arctic National Wildlife Refuge in December. Earlier, the administration of President Donald Trump reversed its predecessor’s ban on new operations in Alaska’s Chukchi and Beaufort seas. On Dec. 29, Italy’s Eni SpA started boring the first exploration well in the American Arctic since Royal Dutch Shell Plc spent $7 billion on a well and pulled out in 2015 after weak results. Across the Arctic Circle, Norway’s drillers have also faced under-producing fields. The national oil company, Statoil ASA, continues exploration, however, even as Norway’s sovereign wealth fund — fueled by oil profits for decades — considers pulling its hydrocarbon investments. Russia is the most aggressive exploiter of Arctic energy. In December, President Vladimir Putin officially opened a $27 billion liquefied natural gas plant in northwestern Siberia. At the same time, the melting of Arctic ice, which has happened faster than many scientists projected, has begun to open shortcuts for trade. Late-summer ice now covers about 40 percent less of the Arctic Ocean than in the late 1970s. The Northern Sea Route, used so far by only about two dozen ships a year, makes the trip from northern Europe to Japan 40 percent shorter than going through the Suez Canal. Tourism is reviving local economies and making new investment demands, particularly in Scandinavia. Increasingly, technology enterprises are opening up in or near the Arctic, including Norway’s Kolos data center, which is expected to be the world’s largest, and Sweden’s NorthVolt battery plant. Low temperatures mean less energy spent on cooling servers, and Arctic nations typically have highly educated, motivated workforces.