Tuesday, July 30, 2013

Why oil companies are banking on the ice caps melting

By now, it should be common knowledge that the ice caps are melting due to an increase in the Earth’s surface temperature. Blockbuster Hollywood movies and proponents of global warming have offered us one apocalyptic scenario after another. Ice ages. Tsunamis. Super-storms. However, one demographic may actually be banking on the ice caps melting: big oil.

According to a report filed by the U.S. Geological Survey, an estimated 13% of the planet’s reserve of unperturbed oil, and 30% of natural gas, sit beneath the once-thick sheath of Arctic ice. Oil executives are salivating for a chance to begin drilling operations. Nations, too.

Russia has already dispatched a fleet of submarines to explore the North Pole. Amy Crawford, a writer for Smithsonian Magazine, says China is next in line.
"China obviously does not have any Arctic coastline. Their northern border is about 900 miles from the Arctic Circle. But they are seeking influence."

In order for China to get in the game, they’ll need support from Canada, one of their main suppliers of crude oil. But if Canada does throw their support behind the Chinese, the move could damage relations between Canada and their neighbor to the South, the United States.

The U.S. and Canada are currently vying for control of the Northwest Passage, a direct sea route to the North Pole that, thanks to global warming, is ice-free for the first time in years. The route is substantially shorter (4,000 miles and 2 weeks shorter, in fact) than the alternative route through the Panama Canal. Obviously, this represents some financial leverage. Canada contends that stretches of the Northwest Passage fall within its jurisdiction, while the U.S. argues that it’s part of international waters. Let the bickering begin!

Russia, on the other hand, controls 100% of the Northeast Passage, giving them a distinct advantage in the race to claim the Artic oil, which is technically ‘up for grabs’. Crawford writes: “In 2007, they (the Russians) actually did this symbolic flag planting where they sent a formerly secret mini-submarine down and they planted a titanium flag. So it sounds like something out of Christopher Columbus' playbook."

Big oil companies are scrambling to compete, but so far have been forced to abandon exploratory voyages due to insufficient technology. Most of today’s tankers are unable to withstand the sub-zero Artic temperatures and vicious winds – issues naval submarines don’t have to consider.

Are oil and gas really worth all the trouble we’re going through? Wouldn’t it be more cost-effective for countries to invest in alternative forms of energy? Why hope that the ice caps melt when we can work towards the solution of a clean, renewable infrastructure? Unless we want to spend our retirements under water…

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