A cold war, literally and figuratively, is brewing over huge energy reserves. The U.S., Russia and Canada are jostling in the frigid Arctic to stake claims to develop what may be the world’s largest untapped supply of oil and natural gas.
Up for grabs: about 90 billion barrels of oil and 2 trillion cubic feet of gas -- around 25% and 30%, respectively, of the world’s undeveloped reserves of the two fuels. For perspective, the oil pooled beneath the Arctic Ocean and tundra amounts to nearly seven times the oil bonanza contained in Alaska’s Prudhoe Bay field, the largest in the U.S.
The three nations plus Iceland, Norway and Denmark -- through Greenland, which is part of the Danish kingdom -- are hoping to lay claim to big stretches off their continental shelves before the United Nations Law of the Sea treaty kicks in late next year. Once it does, it will be tough for any country to legally challenge claims.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A rapid melting of ice in the Arctic has made the reserves more accessible, although full-scale production is at least a decade away, given the vast investment that will be needed to build and set up drilling platforms, pipelines and infrastructure. But with the claims deadline nearing, U.S. and Russian ice cutter survey ships are already busily crossing each other’s paths to do sonar mapping. Moreover, Russian submarine exercises in the Canadian Arctic prompted Ottawa to stage military maneuvers in the area.
The war of nerves will heat up in the spring. Moscow’s pledge to send paratroopers on a training mission in the region has prompted Canada to warn that it will scramble fighter jets to shadow Russian aircraft. “It’s unlikely any of the maneuvers will go much beyond an eyeball-to-eyeball confrontation,” says Peter Zeihan, a vice president for analysis with Stratfor, a global intelligence company. “Even if there is a collision between ships on patrol, the Russians’ first reaction would not be to push the big red button, but to fire off words,” he adds.
Meanwhile, the northern tier nations are also vying for another lucrative prize: control over sea-lanes that will open up as Arctic ice continues to melt, enabling ships to transit an all-water route that will link Europe, the Americas and Asia. This Northwest Passage has been the dream of the world’s merchants since the 16th century.
For weekly updates on topics to improve your business decisionmaking, click here.
-
Dow Sinks 301 Points on Trade War Talk: Stock Market TodayThe contentious relationship between the world's two biggest economies continues to drive global financial markets.
-
Top Places to Park $10K (or More) as Rates Start to FallWith more rate cuts upcoming, here are some smart places to maximize your savings on $10,000.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Apple Readies for AI Upgrade with New iPhonesThe Kiplinger Letter The tech giant has stumbled when it comes to artificial intelligence, but a new batch of iPhones will help it make headway.
-
Japan Enters a New Era of Risk and ReformThe Kiplinger Letter Japan has entered a pivotal moment in its economic history, undertaking ambitious policy and structural reforms to escape from decades of stagnation.
-
How Consumers Are Tinkering with Cutting-Edge AIThe Kiplinger Letter Companies launching artificial intelligence tools are jostling for consumer attention. Some products are already building a deep connection with users.
-
After Years of Stagnant Growth, Hope Emerges for EU EconomyThe Kiplinger Letter Can a German fiscal push outweigh French political peril?
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
How AI Puts Company Data at RiskThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
