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But like their predecessors, today’s merchant adventurers also risk being seduced by a mirage in the Arctic. True, sea ice is vanishing — it reaches its annual minimum at this time of year, and now covers around two thirds of the area it covered 30 years ago — but business opportunities in the region remain limited and their prospects overhyped.
For example, it is likely to be several decades, perhaps half a century or more, before much of the Arctic Ocean is ice-free for most, let alone all, of the year. Climate change seems to be changing how ice is formed — its thickness, and how much survives from one year to the next — but the latest computer models strongly suggest that the region will remain frozen over in winter for a long time to come.
This means that journeying through such waters will remain very difficult, forcing shippers to fork out large sums for icebreaker escort. Even in the summer months, ships will need specially strengthened hulls to keep their insurers happy, and fitting them is not only formidably expensive but commercially risky: they perform badly in normal conditions, and are virtually redundant in the winter months if weather conditions are too bad to operate.
But, even in high summer, ships could easily strike unexpected ice that would cause very costly delays. The Suez and Panama canal routes may be much longer — the Northern Sea route cuts the distance from Rotterdam to the Far East by about a third — but they will long remain commercially safer.
High hopes of finding a viable long-term source of energy in the Arctic are also likely to be dashed. It is rich chiefly in natural gas, which accounts for nearly all of its discovered petroleum and around three quarters of its estimated ‘undiscovered’ reserves, reckoned by the US Geological Survey to be around 1.6 trillion cubic feet. Not surprisingly, European leaders have expressed hopes that these resources might break Russia’s supply stranglehold and enhance the EU’s security of supply. But extracting these reserves, and then transporting them, will be extremely difficult. Most are located deep beneath icy waters where in some places, such as Canada’s Baffin Bay, icebergs float freely. Building the infrastructure and the thousands of miles of pipelines needed to bring this gas to destination markets could prove prohibitively expensive.
The Arctic does boast two big discoveries, Russia’s giant Shtokman field, and a massive Norwegian complex at Hammerfest, but both have been dogged with technical problems and cost overruns. Although discovered in 1988, Shtokman’s gas is not expected to flow until at least 2013. Even then, it will depend on high market prices to be viable. And the Arctic’s resources are more likely to tighten Gazprom’s grip over Europe than to lessen it, since the main ‘niche’ opportunities — the ones where important discoveries can be tapped into existing infrastructure at relatively low cost — are mainly in Russian territory, notably the largely unexplored Pechora Sea.
Fortunately, climate change is gradually opening up other important opportunities, such as in Greenland, where glaciers are retreating to give access to a large and ancient mineral seam. In the west, the British company Angus & Ross recently bought the disused Black Angel zinc mine and predicts that its newly discovered resources will have a productive lifespan of at least 20 years. More than 20 other companies, mainly from Australia and Canada, are exploring for gold, copper, zinc, lead, uranium, tantalum and other rare earth minerals. And Greenland’s flagship project is at Kvanefjeld in the south-west, one of the world’s most important new sources of rare elements such as uranium and sodium fluoride.
The mineral deposits of Canada and Alaska also boast some big opportunities. The Red Dog Mine is one of the world’s leading sources of zinc, and the iron deposits at Mary River, on Baffin Island, are now beginning to reach European markets. Russia also has vast resources of precious metals, such as the Norilsk mine near Dudinka, the world’s largest source of nickel and palladium, while its Siberian oilfields have a voluminous output, transported from a newly opened oil terminal at Varandey in the Barents Sea that is used throughout the year by specially designed ice-breaking tankers.
Such opportunities are of course very important, but any high hopes for the wider Arctic region are likely to be dashed. There are other parts of the world where petroleum can be exploited at a far lower commercial and environmental cost than north of the Arctic Circle: the United States has apparently limitless supplies of oil shale, while Europe would do better to look to liquefied gas and piped supplies from North Africa to break Russia’s supply grip.
In other words, like the brave sailors and explorers of previous ages, whose imaginations were seized by fantastic stories about the region and who often sacrificed their lives on daring but futile voyages, we too are at real risk of pursuing a mirage in the Arctic.
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