The Arctic Oil Rush: How Oil Companies Play Nations

The Arctic ice is melting; that much is clear. The ice shelf is losing 12 percent of its mass per decade, and the North Pole is estimated to be ice free by 2030. In fact, some summers show a 50 percent reduction in sea ice from summers just 25 years ago. That melting ice is revealing undersea resources that countries can’t wait to claim.

Still a harsh environment, much of the Arctic “landgrab” remains symbolic at this point. Northern countries each try to top one another’s stunts. Russia sent submersibles in 2009 to plant a Russian flag (in a pressure-safe titanium capsule) on the seafloor. Canadian Prime Minister Stephen Harper launched an Arctic sovereignty tour. Denmark claimed scientific findings that the Arctic is naturally Danish.

There is already limited sovereignty in the Arctic. Russian, Canadian, and Norwegian claims are geographically clear, since their continental borders run against the Arctic Ocean. The United States lays claim through Alaska. Denmark lays claim through Greenland.

This posturing does little, given that treaties already exist under the United Nations Convention on the Law of the Sea (UNCLOS). These treaties cover the new undersea territory being revealed. These are based on the geology of the sea floor. A country owns sole rights to the ocean within 230 miles of its coast, measured from the low-tide mark. If the margin of the continent continues below water, countries may extend their claim. In most cases, a continental slope continues underwater until a sharp drop-off. In other words, as the Arctic ice melts, be prepared for science to get weird. Geography, insofar as the Arctic is concerned, will become increasingly nationalist.

Rights to a large portion of the Arctic may come down to an undersea feature that broke off from the Siberian continental shelf 63 million years ago. The most contentious submarine feature under study is the Lomonosov Ridge, which may connect to Ellesmere Island, Greenland, and the Siberian continental shelf. This would give Canada, Denmark, and Russia all claim to the feature, and thereby claim to the vast swath of the Arctic under which it stretches.

A U.S. Geological Survey from 2008 theorizes the Arctic holds 90 billion barrels of oil. It also indicates 1,670 trillion cubic feet of unexplored natural gas, mostly within or close to Russia’s claim. This would be 13 percent of the world’s undiscovered oil, and 30 percent of its undiscovered natural gas. The U.S. Department of Energy harshly disagreed with these estimates, saying they were foundless.

As the U.S. has dragged its heels ratifying UNCLOS, multinational corporations have run an end-around. British Petroleum signed a $17 billion exploration deal with Russia. Deals like this contributed to U.S. President Barack Obama green lighting Royal Dutch Shell’s exploration contracts once again, a giveaway that angered environmental groups who had spent decades fighting the battle to keep oil companies out of the Arctic. Oil companies have essentially created a situation where drilling will happen anyway, and any country left behind will have to play catch-up, arguing for Arctic rights from a weaker position.

The sovereignty of aboriginal tribal nations complicates this exploration further. The Tanana Chiefs Conference, the National Congress of American Indians, and the Native American Rights Fund all oppose drilling. This represents some 340 tribes and hundreds of individual villages. In fact, the village of Kaktovik passed a resolution calling Shell a “hostile” and “dangerous” force, and has given the mayor authorization to defend the community through legal or any other action.

Whether these companies are ready is another matter entirely. The Deepwater Horizon oil spill proved British Petroleum couldn’t handle oil extraction in the Gulf of Mexico, a far calmer body of water. In 2012, Shell’s Arctic drilling ship Noble Discoverer was dragged off by winds. Shell’s containment dome, intended to limit the extent of an oil spill, failed in testing. The Discoverer again got in trouble, this time having to outrun an ice floe. Then it caught fire and had to be towed to harbor.

Shell’s other other Arctic drilling vessel, the Kulluk, was set adrift on its way back to Seattle for repairs. Its tow rope snapped, the crew had to be rescued, and the wind and sea ran the Kulluk aground. Then the rig operator pled guilty to improper accounting and withholding information from the Coast Guard. They were fined $12.2 million. The resulting federal investigation required Shell to address safety issues that took three full years to correct, and many insist Shell still isn’t up to par.

In fact, activists used kayaks to temporarily block a drilling rig from leaving port in Seattle in June, and dangled from the St. John’s Bridge in Portland, Ore. in a July attempt to block one of Shell’s icebreakers. These difficulties cover the effort to drill exploratory wells, let alone full drilling of a field. In fact, if Shell does discover oil, full production would not be able to start for a further 10-15 years.

A risk analysis by the Bureau of Ocean Energy Management in 2015 estimates this drilling would risk a 75 percent chance of one or more major oil spills in the Arctic, and that only pertains to drilling in American territory.

For now, Shell’s spent $5 billion drilling in the Arctic with nothing to show for it. At least oceanographic research vessels from every country with a claim maintain cordial relationships. Though they can’t share data, they regularly help each other break ice and watch out for trouble in the Arctic. If only the same could be said for the relationships between their countries.

If you’re wondering about the South Pole, all sovereignty claims and mineral exploration are banned there until 2048.


Do you think we should drill in the Arctic? Do you think we’ll get left behind if we don’t?




Gabriel Valdez
Gabriel Valdez
Gabriel is a movie critic who's been a campaign manager in Oregon, an investigative reporter in Texas, and a film producer in Massachusetts. His writing was named best North American criticism of 2014 by the Local Media Association. He's assembled a band of writers who focus on social issues in film. They have a home base.