Arctic Frontiers 2012

Arctic Frontiers 2012: Reports from Tromsø Kathrin Keil and Andreas Raspotnik February 2012

Arctic Frontiers 2012: Reports from Tromsø

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Kathrin Keil, and Andreas Raspotnik reported live from Arctic Frontiers 2012, January 23rd until January 27th.

Monday, January 23, 2012 Marcia McNutt, Director of U.S. Geological Survey on Arctic Research Findings Marcia McNutt presented the key points of the USGS Arctic research findings concerning oil and gas estimates. She further identified a number of research gaps in the Arctic, which could be addressed by resorting more to traditional ecological knowledge (TEK). Interdisciplinary scientific knowledge will play a leading role with regard to the future development of the Arctic region. She also stressed the need for objective scientific findings in relation to natural resource management and environmental protection. A gas-prone Arctic needs a holistic synthesis of the available scientific material to support international cooperation leading to a more structured and multi-leveled decision-making process. Consequently, several key questions outline the future of Arctic research: 1) Where are potentially exploitable hydrocarbon resources located? 2) Do research gaps exist? 3) How can the scientific and political level be interrelated in the most effective and sustainable way? posted by Andreas Raspotnik and Kathrin Keil at 4:42pm

Ola Borten Moe, Norwegian Minister of Petroleum and Energy, on Norwegian Energy Policy While emphasizing the tremendous importance of hydrocarbon resources for Norway’s overall wealth, the minister focused heavily on the renewable energy potential of the High North, identifying the High North as vital part

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of Norway’s goal of sustainable development. Wind and hydropower production are expected to increase considerable in the years to come.

Nevertheless, the ministers received many critical questions about the hydrocarbon boom in Norway’s north, questioning if Norwegian society actually wants this development in the North. On the other hand, Norway is an example of efficient and safe petroleum extraction energy, and the development of Norwegian hydrocarbons, especially gas, and their export would prevent more Chinese and European coal reaching the market and thus being exploited.

Minister Borten Moe also talked about the recent successes in northern hydrocarbon finds and licenses such as the Skrugard and the Havis fields and the ripple effects of existing production fields on new developments.

Concerning plans for increased and improved infrastructure in the North he emphasized the importance of security of demand, i.e. that enough resource development and market possibilities must be provided in order to make new infrastructure investments profitable. posted by Kathrin Keil at 4:16pm, photo by Tom Fries

Video presentation by Lisa Murkowski, Senator for the state of Alaska, U.S. about priorities for energy politics in the U.S. and in Alaska Senator Murkowski asserted that U.S. participation in Arctic affairs has not been as robust as desired and the ‘warmer’ states of the US tend to forget that the U.S. is an Arctic nation. However, public and governmental Arctic awareness is rising in the U.S. closely linked to greater resource development opportunities. Alaska has great interest in getting Arctic resources to the market, especially from the Beaufort and Chukchi Seas, which would provide great benefits for jobs, government revenues and energy prices. Next to oil and gas, also methane hydrate is an important Alaskan resource to be exploited. In all this, people that live in Arctic are not allowed to be harmed. She’ll further work to change the missing U.S. UNCLOS ratification; she has hopes that early next year things will move Arctic Frontiers 2012: Reports from Tromsø

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on the UNCLOS issue once the U.S. election is over. posted

by Kathrin Keil at

2:26pm

Global Energy Challenges Thomas B. Johansson, Co-Chair of the Global Energy Assessment Setting, outlined the challenges of global energy that must be addressed adequately, timely and simultaneously: • energy services for a growing population (7-9 billion by 2050) • universal access to modern forms of energy (around 3 billion people without access)→ big issue to overcome poverty, task to improve “cleaner cooking” • affordability of energy services • security of supplies (‘peak oil’) • local & regional health and environment challenges • climate change mitigation • peace • ancillary risks, e.g. large accidents, nuclear proliferation, effects on food supplies etc.

He concluded that major energy system changes are needed. Possible means would be improvement of energy efficiency, for example the socalled “Passiv Haus” technology” improving building insulation, further investments in renewable energies and Carbon, Capture and Storage (CCS). Mr. Johansson expressed doubts that big legally binding treaties are the right way to go; rather he emphasised the importance of focusing on local needs and identifying local benefits in specific sectors and areas such as urban areas, energy access, energy efficiency, renewable energies, R&D and innovation. posted by Kathrin Keil at 2:26pm Arctic Science & Art The interaction of science and art is continuously addressed during the framework program of the Arctic Frontiers 2012 conference. Polar artists show their art in Tromsø Art Gallery, which they created after an Arctic cruise trip last summer (picture of wooden igloo). Subsequently to the Arctic Frontiers 2012: Reports from Tromsø

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official opening of the Arctic Frontiers 2012 conference by the major of Tromsø on Sunday 22 January 2012, participants enjoyed a contemporary Sami dance performance called “Reindeer Dance”, a mix of mix of video, dance, light and music performance. A recurring theme was hereby the link between art and science and possible synergies between the two, i.e. if artists can help scientists to communicate their research to the people. posted by Kathrin Keil at 12:58pm, photo by Tom Fries Statoil and the Barents Sea Tim Dodson, Executive vice president of Statoil, defines the Barents Sea as the company’s gateway to the Arctic.

The region is considered a key source of future energy demands, with explicit emphasis on the so-called “high impact twins”, the Skrugard and Havis field. In addition to the already exploited Snøhvit field, the “high impact twins” have the potential of 400 to 600 million barrels of oil equivalent reserves, labelled as “easy oil” (= excellent quality; relatively cost-efficiently exploitable). Although exploitations risks are still identified as relatively high, the Barents Sea is characterized as a new set of opportunities for the Norwegian company.

Despite the often-understated perception of an on-going Arctic “resource race”, the Statoil’s representative explicitly stressed that recent developments, both from a political and economic perspective, indicate that the race for Arctic hydrocarbon resources is rather on than off. posted

by Andreas Raspotnik at 11:27am

The Sami Voice Laila Susanne Vars, the current Vice President of the Norwegian Sami Parliament, emphasised in her speech that indigenous people do not just want to be provider of commodities, but be included in the development of the north, for example in the process of controlling the ongoing and future developments. She welcomed the inclusion of the Sami Parliament in the Arctic Frontiers 2012 conference as well as the focus on sustainable energy development. The overall focus has to be on the human dimension

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of development, also because indigenous people will live in the Arctic after oil and gas development have concluded! posted by Kathrin Keil at 10:37am Tuesday, January 24, 2012 Safety Standards in the Barents Sea Elisabeth Harstad, the Managing Director of DNV Research and Innovation, presented the Barents 2020 project highlighting developments of safety standards in the Barents Sea. Barents 2020 is a RussianNorwegian cooperation project with the overall aim to combine Norwegian experience in offshore North Sea activities with cold-climate development experience in the Russian Arctic to establish a pool of valuable expertise for safety standards of Arctic offshore development. The main sponsors of the project are Gazprom and Statoil. The concrete aim is to reach the same safety level in the Barents Sea as it currently exists in the North Sea. The project developed a catalogue of common safety standards for safe exploration, production and transportation of oil and gas in the Barents Sea. posted by Kathrin Keil at 2:42pm Energy Developments in the Arctic Environment Valborg Lundegaard, Executive Vice President Engineering at Aker Solutions, presented the specific challenges that the Arctic environment poses for energy development. The first priority concerns health and safety of all the people involved and affected by the development activities. Respect for the vulnerable Arctic ecosystem is another important challenge together with the difficult climatic conditions in the High North. The lack of infrastructure is also outstanding: Everything needed for operating in the Arctic has to be brought in from more southern latitudes and the distance to markets is long requiring innovative and safe transport options. All this requires the industry to develop special design features for their installations. But the industry would not start from scratch and Aker Solutions does have much experience on the Norwegian continental shelf, such as the Snövit LNG project. Aker Solutions is working on new technological developments such as floating structures that can resist ice and subsea compression plants that replace on-water platforms. In conclusion, while the challenges are intense, Ms. Lundegaard concluded that the immense opportunities and the

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technological innovations make Arctic development and worthwhile endeavor. posted by Kathrin Keil at 11:42am

a feasible

Arctic Frontiers 2013 The theme of Arctic Frontiers 2013 will be "Geopolitics and Security in a Changing Arctic." Emphasis will be placed on energy and environmental security, drivers of a changing Arctic, challenges to marine resources e.g. moving of fish stocks across geographical borders. posted by Malte Humpert at 10:32am

The Arctic and Renewable Energy Both Nina Jensen, Conservation Director Policy of the WWF Norway, and Ånund Killingtveit, Professor in the Department of Hydraulic and Environmental Engineering at NTNU, Norway, emphasized the necessity of a sustainable future for the Arctic region. In her speech, Nina Jensen outlined the potential consequences an Arctic oil spill would bring to the concerned environment. Consequently Arctic coastal states would be faced with several challenges in order to respond to a possible spill: lack of daylight, low temperatures, ice conditions, wave heights, rough seas, limited infrastructure and a lack of available personnel.

Yet oil spills could be avoided in the first place if focus would shift to renewable energy development. In that regard Jensen called for more political courage and stressed that today’s energy mix could be superseded by a 100% renewable resource depended energy supply.

Hence, Norway should become a forward-looking energy nation and implement a climate law that determines specific policy steps in order to reduce national GHG emissions.

According to Ånund Killingtveit the Arctic region holds an extensive potential for hydro and wind power, despite obvious disadvantages with regard to large distances to consumption centres. Consequently Norway could act as a “green battery” for Europe.

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Both presentations emphasized the fact that renewable energy development is possible in the High North but currently lacks (international) political will. Yet one critical question remains with regard to Nina Jensen and WWF considerations: how likely is a 100% renewable resource depended energy supply if the international system could not even commonly agree on the lowest possible environmental tradeoffs regarding Kyoto and Durban? The first part of the renewable energy session was concluded by Martin Fortier, Executive Director of ArticNet Inc., Canada. This research collaboration works on a public accessible Polar Data Catalogue: www.polardata.ca posted by Andreas Raspotnik at 10:11am, photos by Tom Fries

Wednesday, January 25, 2012 Planning for Petroleum Development in a Regional Context Peter Arbo, Associate Professor at the Norwegian College of Fishery Science at the UiT, captured the matter of planning for petroleum development in a regional Northern Norwegian context. According to Arbo hardly any other economic sector is affected and permeated by that much planning as the petroleum one. With regard to Northern Norway and the Barents Sea as the next promising petroleum province three problems were mentioned: 1) national considerations are prioritized, while regional ones are marginalized; 2) Northern Norway is a latecomer in Norwegian petroleum extraction (→ an inexperienced region faces an experienced industry) and 3) the overlap of various planning systems. In the Barents Sea area the Norwegian oil industry wants to plan autonomously (sector systems: planning pursuant to the Norwegian Petroleum Act) but is squeezed from two sides, the Integrated Management Plan for the Barents Sea and regional planning based on the Norwegian Planning and Building Act. Hence Arbo proposed that the comprehensive management plan for the Barents Sea should not only cover the marine ecosystem but Arctic Frontiers 2012: Reports from Tromsø

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also extend to the maintenance of regional robust societies. Consequently this could lead the institutionalization of a new arena, where several actors negotiate on several levels. posted by Andreas Raspotnik 1.12pm Unconventional energy resources and the Arctic region In his presentation Espen S. Andersen, Exploration Manager of Statoil, outlined the possibilities of unconventional energy resource exploitation, e.g. gas hydrates, in the Arctic. As the exploration and production of conventional oil and gas resources cannot keep pace with the current demand growth, the Norwegian energy multi enters the sector of unconventional energy resource exploitation.

On a global scale gas hydrates in a wide variety of geological settings and modes of occurrence. Promising targets do not only cover the Gulf of Mexico or the Indian Ocean but also the Arctic region, in particular the Alaskan North Slope, the Messoyakha gas field or the Mallik methane hydrate site. Yet development efforts with regard to gas hydrates resources are still in the research phase. Andersen concluded that the Arctic might hold large unconventional resources but a foreseeable exploration and production within the next decades is highly unlikely, due to conventional resource potential, the lack of infrastructure and the needs and demands by the market. The exploitation of unconventional Arctic gas resources is also confronted by the US gas competition, e.g. shale and tight gas and the self-sufficiency of the US gas market. posted by Andreas Raspotnik 12.58pm

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China: An Arctic Actor?

Within the scope of today’s Arctic Frontiers side event “Narrating the High North & Creating the New North”, Njord Wegge, PhD student/fellow at the University of Tromsø (UiT) presented China’s global position as a rising superpower and concerned implications for Arctic stability. In that regard Wegge outlined four key interests with regard to the Chinese Arctic position, namely 1) international shipping interests; 2) climate change – scientific research; 3) permanent observer status in the Arctic Council and 4) a peaceful Arctic development. He concluded that China respects the sovereignty of Arctic states and tries to keep a low-key Arctic profile.

Consequently Chinese decision makers, especially military leaders advocate a cautious approach. Yet China plans to implement three specific Arctic expeditions by 2015. Although China does not currently have the technology for Arctic resources exploitation, the economically investment component could play a decisive role with the decades to come. posted by Andreas Raspotnik 12.54pm, photo courtesy of People's Daily Global Energy Demand and the Impact on the Arctic Michael Depledge, Chair of Advisory Board, ECEHH and Professor of Environment and Human Health, presented a broader picture of the global energy situation and the consequences for the Arctic region. Generally, the Arctic’s future is dependent on three broad global processes of change: demographic change, socio-economic change, and climate change. Rapid global population increase in the decades to come, ageing societies, and global ecosystem degradation have a decisive effect on future energy demands. This affects the Arctic in two ways: first as a region with substantial energy resources and second as a receiving region of pollutants and in form of more rapid climate change in the north. posted

by Kathrin Keil at 12:05pm

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Cross-border Arctic Development and Cooperation In a keynote lecture at the Arctic Frontiers Science Section Morten Smelror, Director of the Geological Survey of Norway, highlighted the significance of creating a common understanding or a map of the Arctic among the various actors involved in order to make cooperation possible. The existence of a common understanding of the Arctic is indispensable for cross-border Arctic development and cooperation to occur. After showing a number of ancient maps (cf. pics), which mirrored the huge lack of knowledge surrounding the High North back in the days, Mr Smelror presented the Circum-Arctic geological map, the result of a NorwegianRussian project to create a common Arctic map. The map includes information about bedrock geology, gravity, magnetics and tectonics (for more information cf. http://www.ngu.no/en-gb/). The project also established a common Norwegian-Russian database of metallic mineral deposits in the Arctic, in addition to the oil and gas database of the USGS. posted by Kathrin Keil at 10:05am Thursday, January 26, 2012 Marine Transport Infrastructure Challenges in the Arctic On the 4th day of the Arctic Frontiers Conference 2012 the Oslo School of Architecture and Design organized the side event “Territorial Practises”. In his presentation Bjørn Gunnarsson, Managing Director of the Center for High North Logistics (CHNL) outlined the possibilities and challenges Arctic Frontiers 2012: Reports from Tromsø

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the Northern Sea Route (NSR) offers as an supplementary maritime route to the traditional Suez-Route. Additionally to the striking advantages with regard to time, fuel, cost and environmental savings, Gunnarsson was well aware of the occurring uncertainties. How safe and reliable is a possible transit? Russia, as the concerned littoral state, regulates shipping (e.g. transit fee, technical requirements) based on several national and international laws, regulations and guidelines: the Russian “Regulation for Navigating on the Seaway of the NSR, 1990”; UNCLOS, Article 234; the “Guide for Navigation through the NSR, 1996 (NSR Guidelines)”. In addition to several other issues that need to be solved (→ security issues; the high cost of insurance; the legal and regulatory framework), Gunnarsson explicitly emphasized infrastructure challenges and the lack of information for interested shipping companies. The main challenges are the following: 1) high tariff fees (yet negotiation seems to be possible); 2) lack of real-time operational knowledge/information and systems to support safe navigation; 3) further risk evaluation with regard to environmental issues needed; 4) communication difficulties in the North; 5) lack of infrastructure with regard to search & rescue, port and support facilities.

Gunnarsson concluded that the NSR would not replace the Suez-Route – yet it offers an interesting alternative as a future trade route. Additionally he highlighted the interesting option of the Atlantic-Arctic-Pacific Ocean Corridor. In this context two hubs (e.g. floating liquefaction plants) would be installed at both ends of the NSR. Between these two hubs icestrengthened vessels, accompanied by (nuclear) icebreakers, would transport goods and materials that would be picked up and carried to the markets by feeder vessels. With regard to these hubs a specific deepwater port would not be needed per se. posted by Andreas Raspotnik 10.29am Shell’s Alaska Story Pauline Ruddy from Shell presented Shell’s problems with entering Alaska offshore drilling, explaining where Shell went wrong initially with its approach to drilling in Alaska’s north, how initial plans failed and how the company has changed its approach in response. Starting in 2005, Shell has obtained several licenses to drill exploration wells in the Beaufort Sea focusing on the Sivulliq prospect and in the Chukchi Sea focusing on the Burger prospect. Given the company’s previous drilling experience, it was Arctic Frontiers 2012: Reports from Tromsø

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assumed the process with the Alaska native stakeholders would run smoothly, which did however not happen. Alaskan natives did not see the economic benefits to an extent as expected, the Exxon Valdez accident was still fresh in Alaska minds, there was an overall lack of trust of oil companies and Shell lacked understanding of the threat to the natives’ culture. In brief, Shell was moving to fast and was soon faced with a strong opposition and many litigation processes brought forward by native villages and the North Slope Borough. Thus the original plan to start drilling in 2007 failed. Mrs Ruddy then outlined how Shell has realised that it had to take a step back and rethink its strategy towards Alaskan oil and gas development. Issues considered were commercial benefits vs. community concerns, developing trust, encouraging discourse, and understanding local political viewpoints better. Shell improved its public hearing procedures, organised oil response workshops and tours to Norway and the Gulf of Mexico to show Alaska stakeholders Shell’s activities in these areas. In short, Shell tried to “demonstrate we heard and changed”. Further, Shell did not only change its approach towards the stakeholders but also made adaptations to its program. Drilling installations were moved further offshore until the annual whale hunt is over and capture discharge facilities were put in place. posted

by Kathrin Keil at 1:02pm

Gas hydrate resources in the Arctic Michael Max, Chief of Research at Hydrate Energy International, presented a more optimistic perspective on the exploitation and production of gas hydrate resources in the Arctic than Espen S. Andersen outlined in his presentation yesterday. Max defined the exploitation of natural gas hydrate (NGH) as an environmentally secure option for a fragile area like the Arctic region. Currently it is estimated that the Arctic holds approximately 6.000 trillion cubic feet of NGH. Yet only Arctic Frontiers 2012: Reports from Tromsø

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50% are technically exploitable and an even lower percentage economically feasible. NGH is a solid material formed from natural gas (mainly methane) and water. Located in a stable reservoir and hardly spatially associated with petroleum, production poses a rather low risk to the environment compared to conventional resources. Additionally specific development factors favour the exploitation of NGH resources: 1) it’s located in shallower seismic zones; 2) lighter drilling requirements; 3) ambient temperatures; 4) only consists of gas and water. Max concluded that with a low-gas-in-reservoir conversion-production methodology, blowouts from NGH production are unlikely. This described stability is in marked contrast to conventional gas deposits. Consequently he advises regulators to perceive NGH resources differently compared to conventional resources. posted by Andreas Raspotnik 11.23am Local Voices – Reindeer Herders in Yamal and Oil and Gas Developments Today’s focus of Section III “Social, political and economic aspects of energy projects in the High North” was on oil and gas development and the consequences for indigenous people, especially reindeer herding in Yamal Nenets in Western Siberia. Aleksandr Serotetto, Nenets reindeer herder, deputy chairperson of local NGO “Yamal”, and leader of the community of private herders, gave a presentation about the development of oil and gas development in Yamal and the gradual consideration of indigenous peoples’ concerns. Yamal Nenets is the world largest region for reindeer herding, which is based on traditional knowledge, a strong family system and nomadism. The oblast holds approximately 90 % of Russian gas production and 20% of the world gas production. In fact, the future welfare of the Russian state and implementation of Russia’s Energy Strategy to 2030 is now closely linked with the development of oil and gas in Yamal, and especially with launching new fields on the Yamal peninsula.

While no consideration and consultation of indigenous people took place when oil and gas development started in Yamal in the 1980s, this has changed after Gazprom and other companies came back to the region in Arctic Frontiers 2012: Reports from Tromsø

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the late 1990s after the breakup of the Soviet Union. Today, dialogue is happening between NGOs, state representatives and reindeer herders and companies understand today that they have to include reindeer herders into their projects. Investments benefiting the reindeer herders are also taken, such as building of slaughterhouses making it easier for herders to sell their reindeer meat and so to make a living with their traditional occupation. However, it is getting harder and harder for reindeer herders in Yamal to find pasture land. More and more land is lost to the big infrastructure projects of the oil and gas development and the herders have to cross vast distances in order to reach their summer and winter pastures. But given that dialogue is happening today, Mr. Serotetto concluded on an optimistic note for the future of reindeer herding in Yamal. posted by Kathrin Keil at 10:40am Friday, January 27, 2012 The Prominence of Arctic Energy Resources The Arctic Institute (TAI) was presented by Kathrin Keil, PhD Candidate at the Berlin Graduate School for Transnational Studies (BTS) at the Freie Universität Berlin.

In her presentation the TAI’s Research Associate took a closer look at the case of Arctic oil and gas resources and the stakes therein in order to find out if the northern region of the globe is likely to become a new region of contention. While the ‘conflict camp’ in IR evokes the next Cold War about Arctic resources given rising energy demands, the crucial meaning of energy to a country’s security interests and the weak institutions governing the region, the ‘institutionalist camp’ points to the well-institutionalised state of the High North and thus does not expect open conflict to break out. Both camps, however, share the same underlying assumptions of existing and rising stakes towards Arctic oil and gas. Kathrin’s main argument is that this underlying assumption has not been empirically established yet, so she outlined the actual stakes involved by examining Arctic oil and gas interests of the five Arctic littoral states. Kathrin used three indicators to Arctic Frontiers 2012: Reports from Tromsø

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determine the five Arctic littoral states’ Arctic oil and gas interests: overall standing of the Arctic, specifically security relevance, market relevance and identity, cultural and historical relevance of the Arctic and its resources. The following table summarises the empirical results.

Kathrin concluded that the five Arctic coastal states show not only different levels of interests, but also different reasons for their interest in the High North. Further, the countries concerned are unlikely to enter into a geopolitical ‘race’ for the region’s resources. While Russia has the biggest Arctic resource base, the US and Canada are not dependent on these resources and their exploitation given the two countries’ own vast resource bases. And given that the high importance of Arctic oil and gas in Norway and Greenland is primarily focused on the exploitation of the national resource base, also these two countries are not expected to join any confrontational ‘cold rush’ about Russia’s resources. If any conflict about Arctic natural resources were to arise, it will most likely concern complicated business relationships between the Russian state and foreign oil and gas companies wanting to get a share of Russia’s vast

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hydrocarbon base to satisfy especially high European demand. Much will thus depend on how Russia will handle the delicate balancing act of needing foreign involvement to expand its oil and gas production and wanting to keep the production of these resources as strategic and thus as far away as possible from foreign hands. posted by Andreas Raspotnik 3.33pm

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