The future for Arctic counties: Oil and gas bonanza or environmental catastrophe?

Publish date: February 9, 2011

MURMANSK – Whether Russia and Norway are prepared to cooperate on Arctic oil and gas fields and what kinds of challenged and environmental threats stand before them were the subject of an international conference that took place last week in Norway.

According to leading Norwegian experts, Norway’s gas and oil reserves are depleting and the country is laying its hopes not only on undersea fields that were partitioned to it in September’s Arctic sea demarcation agreement with Russia, but on the development of the Russian side of the Barents Sea.

“We still don’t know was reserves of oil and gas lie in the formerly disputer region,” said Daniel Fjaertoft, an advisor to Econ Poyry AS. “Now we are relying on very old seismic studies that were done during Soviet times.”

According to him, Norway, as a big oil and gas nation, is on the cusp of a collapse of oil recovery. If Norway does not open new and robust oil fields in the near future, then oil recovery will only fall over the next 20 years.

Therefore Norway is hoping that Russia will start work on its side of the Arctic shelf as quickly as possible, and is ready to cooperate in the project. However, Russia is not currently prepared to develop new fields in the Barents, besides the Shtokman Field, Fjaertoft said.

At current, only two Russian companies could bear the weight of working up new oil and gas fields in the Barents Sea – Gazprom and Rosneft – but they are already working on projects in Yamal and in Western Siberia. The Arctic region is therefore not a priority for Russia at the moment.

Accidental oil spills

According to Alfred Nordgård, a representative of the Norwegian Oil Association (OLF), the development of new fields in the north of the Norwegian part of the Barents Sea bears threats that the country is not prepared for.

“We love to say that Norway has the best system in the world for reaction to and liquidating oil spills, but this is far from true. Our system of reacting to oils spills is not quite adapted to the conditions in the Barents Sea,” said Nordgård.

Bellona President Frederic Hauge supported Nordgård’s statement.

“Everyone clearly knows about the scale of the catastrophe in the Gulf of Mexico,” said Hauge. “Despite the efficiency of the reaction and the 5,000-vessel strong flotilla that collected spilled oil, they were only able to clean up one percent of the oil.”

According to Hauge, northern Norway does not have even the bare minimum of vessels and equipment to deal with a spill of that magnitude, which was obviously demonstrated by the accident at the Norwegian Gullfaks platform in 2010.

“Greed and interest in profits take precedence over issues of environmental safety,” said Hauge.

Impact on the climate and the fishing industry

Naturally, a discussion of the perspectives of the oil and gas complex in the Barents Sea cannot overlook its consequences for the Artic climate and the climate worldwide.

“Climate change is very noticeable in the first place in the Arctic, and the negative consequences of this scare us,” said Norway’s environmental minister, Jonas Gahr Støre.

Støre also underscored that the development of oil and gas activities should not harm the fisheries that Norway has always had and will always have, as distinguished from the comparatively brief period that it will have oil.

According to Hauge, climate change is a serious threat to the north. If the world’s average temperature rises two degrees in 100 years, then the Arctic region will see a temperature increase of 5 to 6 degrees. 

“The North Sea is one of the cleanest in the world, therefore fighting against oil and gas activities in this region, I see that we have something to fight for,” said Hauge, underscoring that no one is impressed by the oil and gas complex’s efforts to lessen its impact on the climate and the environment.

There are other resources besides oil and gas. The Arctic region has excellent prospects for the development of environmentally clean renewable energy.

“I don’t think the Shtokman Field project can be realized in the next 25 years,” said Hauge. “This is a long period for European countries that are developing renewable energy at a fast tempo. It could turn out that when the oil and gas companies are ready for the Shtokman project, this expensive gas will no longer be needed in Europe.”

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