Race for Arctic resources in a climate change era

In November, a student-led project made a disturbing discovery: Mesyatsev Island, a floating slab of ice previously observed in the Arctic, had almost disappeared. It took around a decade and a half for the 11.8-million-square-foot island to shrink by 99.7% and vanish from the Arctic’s map.

Indeed, the Arctic is changing fast, impacting ecosystems and economies all over the world. Over the last 50 years, the polar region has been warming up four times faster than other parts of the globe, a phenomenon known as Arctic amplification. Temperatures have risen considerably; in 2023, the region experienced its warmest summer.

“A melting Arctic presents new challenges and exacerbates existing ones for Arctic states and communities,” said Samuel Jardine, head of research at London Politica. “Degrading permafrost has already seen infrastructure damage as foundations collapse and pipelines deform.”

“It is estimated that 34% of the population in the Arctic’s permafrost regions will be at risk by the end of 2100, with it costing between US$205-$572 billion depending on who you ask to just maintain the operation of engineering and service infrastructure in the 2080s,” Jardine said.

“Depending on whether this investment happens and on the political will in the relevant states, this could see significant risk to human security and increased migratory pressure,” the expert told this author.

Race for Arctic resources

The Arctic is home to around 13% (90 billion barrels) of the world’s undiscovered conventional oil resources and 30% of its undiscovered natural gas ones, according to an assessment conducted by the US Geological Survey (USGS)

As Arctic ice melts, the cost of extracting its raw materials declines. In 2023, a Swedish mining company discovered a rare earth element deposit, which is believed to be the largest in Europe.

Meanwhile, the exploration and development of natural resources in the Arctic pose new environmental risks. Oil spills threaten fish, birds, and other organisms that serve as food for other species, while mines can produce toxic waste and destroy a crucial habitat for salmon.

No less importantly, the Arctic’s increasing accessibility is spurring geopolitical competition over natural resources.

“Changing temperatures also impact fisheries, which for the Arctic has always been one of the key trigger points for political tensions,” Jardine noted. “Over the last few years, there have been extensive political disputes, even between states who are broadly geopolitical partners like the UK, EU, and Norway, over fishing quotas and adherence to them in the High North as fish species migrate and politics spills over. Such incidents, of course, are comparatively minor, but tensions are likely to increase as fish stocks continue to change.”

Jardine notes that it is these new opportunities that are ironically creating most of the security issues.

“Melting ice and warming temperatures make resources easier to access (not least of all those on the seabed), which is already driving increased activity, such as Norway seeking to exploit its EEZ for seabed mining as it aims to move away from offshore oil. This not only drives securitization, as geopolitical tensions spill over, much as they are doing with fisheries, but also makes the various clashing claims to the Arctic seabed, specifically between Russia, Denmark, and Canada, an increasingly pertinent issue.

“For now, these states are utilizing the UN Commission on the Limits of the Continental Shelf, which can give binding recommendations but not enforce or determine maritime boundaries.

Given current geopolitical conditions, it is unlikely these states will be able to settle the issue among themselves, particularly with concerns that rights to the seabed can allow for “dual-use” infrastructure or utilization of national seabed regulations that might restrict maritime traffic,” the expert explained.

Geopolitics of shipping

Another security risk trigger is the rise in shipping traffic in the polar region. The shrinking sea ice has opened up for navigation a growing number of previously hard-to-reach regions. And as the frontier of natural resource extraction expands, Arctic shipping increases, too.

Among the largest regional projects are Canada’s iron ore mine in the Mary River area of Baffin Island and Russia’s Yamal Gas project. Both projects have contributed heavily to the increase in the number of bulk carriers and gas tankers in the Arctic.

“The melting Arctic is expected to unveil three new shipping routes over this century that are all on paper significantly faster than traditional routes to traverse East-West,” Jardine said. “Some estimates have the Arctic becoming ice-free in summer by 2030, which would facilitate non-ice-class vessels being able to safely travel the routes.

“All three routes have geopolitical problems to varying degrees already, but the big ‘flashpoint’ is most likely to be over the Northern Sea Route (NSR),” the expert added.

This raises concerns about unresolved disagreements over new sea route sovereignty. Russia claims that the NSR lies within its territorial waters, while the US and a number of other countries reject this claim.

Another sea lane, the Northwest Passage or NWP, is claimed by Canada to be within its internal waters, but the US insists that the NWP is an international strait.

Governing the Arctic

Some four million people live in the Arctic region, distributed across Norway, Denmark, Finland, Sweden, Iceland, Russia, Canada and the US. Around 10% of them are indigenous peoples.

National governments control their own territories, including territorial waters and coastlines, while the remainder of the Arctic Ocean falls under the jurisdiction of the UN Convention on the Law of the Sea (UNCLOS).

Many Arctic-related matters are addressed by international agreements, such as those on the prevention of unregulated high seas fisheries and marine oil pollution response cooperation, the International Code for Ships Operating in Polar Waters and the UN Convention on Biological Diversity.

Three decades ago, a special structure called the Arctic Council was created to bring together the representatives of the eight Arctic states as well as indigenous peoples residing in the region. This international forum has been successfully dealing with issues like oil spills, the loss of sea ice, tundra thawing and rescue operations.

The Arctic Council has survived multiple challenges, but the most impactful one was the recent breakdown of relations between Russia and other Arctic states over the ongoing military conflict in Ukraine.

Politics aside, the problem with the pause in full-fledged cooperation is that it does not help in dealing with climate change implications. Nor does it serve the interests of indigenous peoples. Now that the Arctic is facing climate change risks that threaten the whole world, any limitations in collaboration are unhelpful, if not harmful.