Oil and sustainability in the Arctic Circle.

• Author: Rixey, Caroline M.

Remaining one of the last untouched environments on Earth, the Arctic Circle is home to a vast number of natural resources and wildlife. Yet as a result of climate change, the unique environment of the Arctic is rapidly shifting, uncovering more and more of the continental shelf as the ice sheets melt away. (1) This melting allows for greater access to the Arctic land beneath, and the resources it provides, that was unavailable before.

One of the largest untapped natural resources of the Arctic is oil. It is estimated that the Arctic Circle, while covering only six percent of the Earth's surface, holds approximately twenty-two percent of the Earth's oil and natural gas reserves. (2) As the ice sheet covering the Arctic begins to melt, more of the continental shelf is exposed and the possibility of exploiting this resource becomes a feasible possibility. (3)

This paper sets out to discuss the issues surrounding Arctic oil, the interests of the stakeholders involved, and sustainability challenges of the project. Part I provides a brief background of the Arctic Circle and the presence of unexplored oil reserves. Part II explores the perspectives of the different stakeholders involved in Arctic oil exploration, including the eight Arctic states and different various non-governmental organizations ("NGOs"). Part III discusses the current international agreements governing the Arctic Circle, focusing on the work of the Arctic Council. Part IV discusses sustainability issues surrounding Arctic oil drilling and the preservation of the Arctic environment. Part V provides an analysis of the international framework surrounding Arctic oil exploration, taking into account the different stakeholder opinions, sustainability issues, and the current international framework governing this area. Finally, Part VI draws conclusions on this issue.

1. THE ARCTIC ENVIRONMENT AND OIL RESERVES

   Geographically, the Arctic is defined as the region located north of the Arctic Circle. (4) This area is unique in that sunlight is present or absent for twenty-four continuous hours on the summer and winter solstices. (5) The Arctic contains the land area of eight states: Canada, Finland, Greenland, Iceland, Norway, the Russian Federation, Sweden, and the United States. (6) However, only the Russian Federation, Norway, the United States, Canada, and Demark through their jurisdiction over Greenland, have a territorial right to the Arctic. The other two states do not border the Arctic Ocean. (7)

   The most striking feature of the Arctic is the sea ice, which covers approximately eight million square kilometers during the winter months and approximately twice that area during the spring and summer months. (8) The ice cover extends to most of the continental shelves during a majority of the year. (9)

   The Arctic is home to hundreds of plant species that have adapted to live in the harsh tundra environment. (10) Many animal species have adapted to live in the tundra conditions as well, including polar bears, artic foxes, and caribou. (11) These species either hibernate during the winter months and escape the most severe weather conditions of the north or migrate further south until the spring months. (12) In addition, approximately four million people call the Arctic Circle their home. (13) Most of these people live in a few post-Soviet cities, while the rest are scattered about living in tiny coastal communities. (14)

   The Arctic is host to a large number of untapped oil reserves. The United States Geological Survey ("USGS") estimates that the oil resources of the Arctic Circle are equal to approximately (412) billion barrels of oil. (15) Arctic oil and natural gas discoveries began in Russia in 1962 at the Tazovskoye Field, and then in the United States in 1967 at the Alaskan Prudhoe Bay Field. (16) Since then, sixty-one large oil and natural gas fields have been discovered in Russia, Alaska, Canada, and Norway. (17) The USGS states that the Arctic holds approximately twenty-two percent of the undiscovered oil resources in the world; yet while the Arctic is rich in unexplored oil resources, the fields are concentrated in a few sedimentary provinces. (18)

2. STAKEHOLDERS OF THE ARCTIC OIL SUPPLY

   The oil resources of the Arctic are limited to a few sedimentary provinces and are not evenly distributed among the Eurasia and North American continents. (19) Of the discovered oil fields in the Arctic, forty-three lie in Russia, eleven in Canada, six in Alaska, and one in Norway. (20) This inequality, along with increasing territorial disputes regarding sovereignty over the Arctic Circle and North Pole, will lead to conflict and disagreement among the stakeholders of the Arctic oil supply.

   1. State Interest

      Under the United Nations Convention on the Law of the Seas ("UNCLOS"), (21) the territorial seas of the nations extends only twelve nautical miles from shore and those twelve miles are considered the sovereign territory of that state. (22) The exclusive economic zone of the state extends from a state's baseline up to 200 nautical miles and gives states control of the natural resources, including oil and gas, within this area. (23) A state may extend its economic zone beyond this if it can prove that "the underwater ridges of the seafloor are a geological extension of the country's own continental shelf." (24) This right of sovereignty and control over the natural resources of the oceans has led to many of the Arctic states attempting to gain more territorial control of the Arctic circle, its marine waters, and the resources it holds.

      In 2007, a Russian polar expedition planted a titanium Russian tricolor on the seabed beneath the North Pole, claiming the Arctic for Russia. (25) On December 15, 2014, Denmark staked a claim for the North Pole as well, through its jurisdiction over Greenland, stating that 900,000 square kilometers of the Arctic Ocean above Greenland, including the North Pole, belonged to it under UNCLOS. (26) Canada also intends to assert sovereignty over a portion of the polar continental shelf. (27) These territorial claims of sovereignty all conflict with one another and as more Arctic states become involved in staking claims over the Arctic, disputes will arise. (28) The claims over the Arctic are based on the desire to declare sovereignty over the vast unexploited resources the Arctic holds, and as the ice sheet continues to melt due to climate change these resources become more readily available and more contested.

      The Arctic states hold differing positions with regard to the development of their oil reserves in the Arctic Circle. Russia continues to lead and dominate the development of exploration and extraction of Arctic resources due to its large reserves of oil, gas, and ore in northern Siberia. (29) Gazprom Neft, one of Russia's fastest growing companies, (30) owns the world's first Arctic oil rig involving a stationary platform on Russia's Prirazlomnaya platform. (31) Gazprom Neft began production in the Arctic in 2013 and reached a total output of approximately 5,000 barrels per day in 2014. (32) Russia has several more projects under development in the Arctic, including Gazprom Neft's Novy Port, Bashneft and Lukoil's Trebs and Titov, as well as Gazprom Neft and Novatek's Severenergia. (33) Russia is likely to continue intensifying exploration of the continental shelf and extend deeper into the Arctic waters as programs are supported by the investments from private Russian oil and gas companies in addition to continuing to extend its territory into the Arctic. (34)

      In the United States, much of the Arctic's oil and gas resources remain unexplored due to concerns about environmental impact of oil drilling. (35) In 2005, the oil in the United States' territory of the Arctic was estimated to be worth $374 billion. (36) However, it was estimated that the oil would not be available for five years and peak output would not be reached until 2025, thus not having a...