Politics, Business & Culture in the Americas

The Arctic: The New El Dorado

Reading Time: 9 minutes[i]Climate change, oil and geopolitics in the Arctic Circle.[/i]
Reading Time: 9 minutes


Reading Time: 9 minutes

Just 50 years ago, the Arctic was one of the world’s most remote and inhospitable regions, largely populated by indigenous peoples who hunted musk-ox and caribou and supported themselves with fishing, much as their ancestors had done for thousands of years.

But climate change has transformed this timeless landscape of snow and ice into the hub of a geopolitical struggle over sovereignty and resource exploitation. Of the countries bordering the Arctic Circle, Canada may have the most to gain, as well as the most to lose, from that struggle.

The Canadian Arctic, a huge but sparsely populated region of 108,000 people, of whom 60,000 are indigenous Inuit, has increasingly become a test case for whether commercial and military interests can trump the needs of the environment and northern peoples. A steady rise of 5 to 7 degrees Fahrenheit (3 to 4 degrees Celsius) in average temperatures in Canada’s Far North since the 1960s has already limited access to traditional food sources , according to James Ford, a geographer at Montreal’s McGill University. And an additional 2 degrees (1 degree Celsius) of warming is expected by the middle of the century.

That has effectively put Canada’s Inuit at the center of a debate over the future of the Arctic region, as supporters of massive oil and gas development square off against environmental activists with competing visions about how to cope with climate change.

Ground zero of the struggle is the fabled Northwest Passage, where rising temperatures and melting ice may make it possible to realize a centuries-old dream of establishing an all-season trade route linking the Atlantic and Pacific Oceans.  Arctic climatologists predict that by 2030, or at least by the end of the century, the ice cap in the Arctic Ocean will disappear altogether in the summer months.

Hydrocarbon Bonanza

One direct result is likely to be further opportunities for exploiting the region’s hydrocarbon riches.  With an estimated 22 percent of the world’s undiscovered  reserves—about 84 percent of those riches offshore—the Arctic Circle is considered the world’s last frontier for oil and gas exploration. Some 400 oil and gas fields have been discovered onshore in Canada, Russia and Alaska. According to the 2008 U.S. Geological Survey report, there are 90 billion barrels of undiscovered oil in all regions north of the Arctic Circle and 1,670 trillion cubic feet of natural gas.

An ice-free Northwest Passage is likely to add momentum to long-delayed projects exploiting the North’s resources. Even though exploration is at a virtual standstill due to lowered oil prices, a rush to grab the Arctic’s natural resources is inevitable “with the ice diminishing and world demand for oil and gas expected to continue,” says Rob Huebert, associate director of the Center for Military and Strategic studies at the University of Calgary.

But oil and gas exploration is not the only high stakes challenge created by the warming Arctic environment.

For decades, the United States and Canada have engaged in a diplomatic battle over who “owns” the Northwest Passage.  Canada claims that the passage falls within its territorial waters, while the U.S., supported by the European Union, maintains it is an international strait.

Most of the time the argument has been a friendly dispute between long-standing allies.

But tempers flared in 1985 when the U.S. Coast Guard icebreaker Polar Sea sailed through the Northwest Passage without asking Canada’s permission—a formality that had until then been traditional.

In response, Ottawa declared that the channels around the Arctic islands were internal waters.

Last March, at an Ottawa meeting of the Coastal Arctic Nations, U.S. Secretary of State Hillary Clinton seemed to suggest that Washington’s stance may be softening. Asked during an interview if the U.S. might recognize Canada’s Northwest Passage sovereignty in exchange for joint seaway management, which could include jointly maintaining infrastructure and policing the seaway, she responded: “I think that’s what we’re beginning to discuss seriously.” The recent Oslo-Moscow deal could offer some guidance, says international law expert Michael Byers of the University of British Columbia. Russia and Norway agreed in April to settle their differences on long-contested maritime boundaries in the Barents Sea by splitting the disputed seabed and co-managing the resources and fisheries that straddle the boundary.

According to Byers, the special nature of the Arctic environment ought to encourage international cooperation rather than competition among key stakeholders: Denmark, Russia, Canada,  Norway, and United States.

“People who understand the Arctic realize that the distances are very large, the costs of operations are extremely high and the benefits of cooperation are undeniable,” says Byers. “So if you deal with the realities of the North, the specter of wars and gunships and conflict disappear very quickly. The reason northern peoples like the Inuit are so incredibly cooperative is that if you don’t cooperate in the Arctic, you don’t survive.”

Boots on the Ice

Nevertheless, Canada remains committed to ensuring that its sovereignty claims are respected, even if that means increasing its military presence in the North. Currently, Canadian military forces available for the Arctic include five icebreakers, a state-of-the-art radar satellite for tracking ships and mapping sea ice, 14 long-range helicopters, and the country’s more than 70 F-18 fighter jets.

But much of the equipment is getting old, and Canada’s military strategists are acutely aware that over the next decade this outdated equipment will reduce their ability to monitor the region.

Canadian Prime Minister Stephen Harper has accordingly made the Arctic one of his priorities, and he has promised to provide the Canadian forces “with the tools they need” to enforce Canadian claims.

“Canada has a choice when it comes to defending our sovereignty over the Arctic,” he said in a July 2007 speech. “We either use it or lose it. And make no mistake, this government intends to use it.”

Shortly afterwards, Harper announced plans to build six to eight new armed offshore patrol ships to monitor the Arctic, Pacific and Atlantic Oceans. At a cost of $100 million, he also announced a deep-water port on an old lead and zinc mining site at the eastern entrance to the Northwest Passage in Nanisivik, where ships could resupply and refuel. The ships are designed to crush meter-thick ice and patrol the length of the Northwest Passage. A military training center in Resolute Bay, one of Canada’s northernmost communities on the southern tip of Cornwallis Island, will also be built to acclimatize soldiers to the north’s frigid temperatures  and to train for year-round patrols.  Meanwhile, a powerful $720 million icebreaker is expected to be ready in 2017. And Canada’s military plans to replace its CF-18s with 65 next-generation Joint Strike Fighter Aircraft (CF-35s) by 2017 at an estimated cost of at least $9.4 billion.

Canada’s military forces in the north have until recently been largely assigned to search-and-rescue roles.  But University of Calgary’s Rob Huebert suggests the region is facing an “Arctic arms race.” With the opening of the Arctic and the expected increase of shipping, tourism and, presumably, oil tankers, this vast area will require more policing. Whether it’s simply good planning or preparing for a “hostile environment in the Arctic,” the Russians, the Danes and the Americans are already building their military capability to face that challenge, argues Huebert.

There is little doubt that military activity has been increasing.  Last November, the USS Texas, the newest Virginia-class submarine,  showed up on patrol in the North Pole.  Two Russian submarines were also detected in international waters off the east coast of Canada in early September.

Three years ago the Russians used a submersible to plant a flag at the North Pole, which they claim to own, raising Canadian hackles. Artur Chilingarov, deputy speaker of the Duma at the time and a flamboyant explorer, sought to claim the Arctic for Moscow. His gesture was dismissed by the Russian leadership as nothing more than a public relations exercise.

But this sent shockwaves through the diplomatic community. “This isn’t the fifteenth century,” complained Peter MacKay, then Canada’s foreign affairs minister. “You can’t go around the world and just plant flags and say, ‘We’re claiming this territory.’ ”

The Harper government has not just relied on the military to make its point.  Last February, Canada hosted a meeting of G-8 finance ministers and bankers in Iqaluit, Nunavut, Canada’s newest territory. And in February this year, it issued new mandatory rules for domestic and foreign ships in Canada’s northern waters. Cargo carriers, cruise ships and large vessels will now be required to register their movements and locations with Canadian authorities when passing through Arctic waters to prevent pollution and terrorist activity.

However, as climate change makes the Arctic increasingly accessible, the threat may not come from other nation-states, but from the way the region is used. Michael Byers and other Arctic observers maintain that the gravest challenges in the Arctic today come from terrorism, illegal migration and drug trafficking. Experts fear the melting Arctic could become a haven for terrorists and criminals because surveillance is more difficult.

Former U.S. ambassador to Canada Paul Cellucci (2001–2005) has warned that terrorists might use an ice-free Northwest Passage to traffic in weapons of mass destruction. In October 2004, he called on Washington to recognize Canada’s claim, saying the top U.S. priority was to “stop the terrorists.” Three years later he noted on a Canadian television show that considering the Northwest Passage to be part of Canada “would enable the Canadian navy to intercept and board vessels in the Northwest Passage to make sure they’re not trying to bring weapons of mass destruction into North America.”

Byers says it’s not difficult to imagine a ship from a rogue nation choosing the “under-policed” Northwest Passage over the closely watched Panama Canal to ship in missiles, weapons of mass destruction and equipment for enriching nuclear isotopes. Smugglers could transfer passengers or cargo from a vessel to a small plane on one of dozens of gravel airstrips along the waterway.

Practically speaking, it would make a lot of sense to recognize the Northwest Passage as Canadian internal waters. Canada’s immigration, customs and criminal laws would apply. Surveillance of ships would be closely scrutinized. Otherwise, as an international strait, submarines would be able to pass through the Northwest Passage without surfacing or alerting Canada.

Recognition of such common threats could be a productive way of shifting the current emphasis from questions of sovereignty and military competition.  To a large extent, Arctic states already cooperate. They share scientific data as well as the icebreakers that nations use to map the ocean seabed and to clarify jurisdiction under international law.

To Drill or Not to Drill

The high-stakes struggle over the Arctic took a new turn last March when U.S. President Barack Obama proposed opening up a vast expanse of coastlines—including the Beaufort Sea—to oil and gas drilling. This caught American and Canadian observers off guard, and “put tremendous pressure on Canada and the U.S. to resolve the dispute,” says Huebert.

This year’s catastrophic explosion and oil spill in the Gulf of Mexico offered a sobering lesson on the risks of working in one of the world’s most pristine environments. Arctic geography is also a particularly forbidding barrier. Even though warming temperatures hold out the prospect of all-weather routes for shipping  Arctic oil to markets, the thawing of the permafrost is already destabilizing roads, pipelines, pumping stations and drilling stations and, in the end, making it costly to get to the oil and gas reserves. And to complicate matters, the process of granting exploration and drilling licenses is a nightmare because of shared or overlapping jurisdiction between Ottawa and Canada’s 10 provinces. Canada’s three territories—Yukon, the Northwest Territories and Nunavut—are trying to negotiate more control over natural resources, but they don’t yet have the same powers as provinces.

Nevertheless, oil will likely dictate the region’s future. With the promise of oil and gas in all regions of the Arctic, big oil companies are not likely to resist.

And that’s where the competing claims of sovereignty, resource rights and commercial interests have become embroiled with the changing lifestyles of Canada’s northern indigenous peoples.

Ironically, the most important argument for Canada’s campaign to assert sovereignty over the Northwest Passage is the Inuit.  Under customary international law, nomadic peoples can acquire sovereign rights and transfer them to nation-states. The 1993 Nunavut Land Claims agreement attempted to do just that, declaring “Canada’s sovereignty over the waters of the Arctic archipelago is supported by Inuit use and occupancy.”

The Nunavut Land Claims Agreement deal gave the Inuit control of 135,000 square miles (350,000 square kilometers) of land, including a large area that includes mineral rights. It also awarded $1.08 billion over 14 years to the Inuit, reserved them jobs in the public sector, and addressed wildlife management and environmental protection regimes.

Details over land and resources are to be spelled out in a Devolution Agreement between Ottawa, Nunavut and the Nunavut Tunngavik Incorporated, the Inuit organization implementing the Nunavut Land Claims Agreement. All three parties signed a Devolution Protocol in September 2008 to guide them through the negotiations on the transfer of onshore federal lands and minerals and oil and gas resource management, but the process has hit a snag. Earlier, in December 2006, the Nunavut Tunngavik Incorporated accused Ottawa of foot-dragging and launched a $1 billon lawsuit against the Canadian government for allegedly failing to  live up to its obligations under the Nunavut Agreement.

By and large, the Inuit and other First Nations in Canada’s North welcome development, but they would like a degree of control over the pace of change. “We’re not antidevelopment,” says Pita Aatami, president of the Makivik Corporation representing the Inuit from Northern Québec. “We want to make sure we’re part of that development.”

That means companies struggling for a foothold in the Canadian North will have to negotiate agreements that will provide jobs, training and schools, or respect standard clauses to that effect in land claims agreements, says Aatami.

A massive oil find in the Beaufort Sea would increase the pressure to resolve the Northwest Passage dispute, since the seaway would be a preferred option to ship oil to the U.S. market. But it would also intensify the pressure to develop a settlement that would satisfy both indigenous peoples and environmentalists.

Now, more than ever, all the players in the region, ranging from the indigenous peoples to nation-states and multinationals, will have to find a way to share responsibility for managing climate change. In the Arctic, the effects of that change are likely irreversible.


Huguette Young is a veteran journalist and blogger in Ottawa, Canada.

Tags: Arctic Ocean, Canada, Climate change, natural resources, Russia, transportation, United States
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