Sun, Jun 10, 2012 - Page 9 News List

Arctic oil rush gambles with nature and diplomacy

In Svalbard, politicians and scientists talk of global warming and a low carbon economy. Outside, the drilling rigs are moving in

By Terry Macalister  /  The Guardian, SVALBARD, NORWAY

They are determined to defend their right to introduce national oil regulations — which environmental groups and the global community are beginning to challenge.

“Like it or not, what is happening in the Arctic and how it is dealt with becomes everyone’s business,” Wallis said. “This is an issue which Norway and other Arctic states have to accommodate.”

While Greenpeace has physically tried to halt drilling off Greenland and Alaska, Norwegian environmental group Bellona is waging a war of words with Oslo. Its leader, Frederic Hauge, said: “It’s a big, big, big gamble exploring for oil in this area. There are so many stress factors here — be it the fish, the nuclear waste from the Cold War and the fragility of the ecosystem. I am also very worried about the geopolitics of the Arctic. We are acting like petroholics and I do not believe there is widespread support for it.”

Norway’s state energy company, Statoil, has its commercial compass pointing north, believing there is nothing to stop its deep water experience of the northern North Sea being safely applied to the Arctic or sub-Arctic.

Statoil points out it has been operating the first Arctic offshore gas field at Snohvit, since 2007. The company — 67 percent owned by the government — has signed a strategic exploration and production deal with Russia’s state-owned oil group, Rosneft. Statoil is also helping another Russian state company, Gazprom, build the huge Arctic offshore gas field, Shtokman — said to hold more gas reserves than remain in all Norway.

Hauge points to the irony of more fossil fuels being developed in an area where the impact of their carbon production is most acute.

Giske sees no contradiction between Norway’s physical search for hydrocarbons and the hunt for low-carbon solutions at Ny-Alesund.

“We are all going to be dependent on fossil fuels for a long period and natural gas is the bridge into a low carbon world,” he said. “If the EU replaced all its coal-fired power stations with natural gas it would easily meet its 20/20 (20 percent reduction in carbon emissions by 2020) goal.”

He is more concerned about EU energy commissioner Gunther Oettinger’s recent visit to Oslo to push a new regulatory regime. Oettinger is arguing that Europe is a key customer of Norwegian oil and gas and points to Norway’s membership of the European Economic Area as a reason why a common offshore safety regime would make sense.

Giske said Norway and Britain had more experience than anyone else in Europe — over 40 years — so why change a system that has worked well?

Meanwhile, Norway has moved the headquarters of its army from Oslo to a northern town, Bardufoss, and signed its biggest ever single military contract for jets to be located there.

Who is the enemy? Russia?

“No,” Giske says.

China? He almost chokes.

“Look we don’t need to identify an enemy to justify defense expenditure. We are after all part of the NATO alliance,” he says.

In Ny-Alesund, there is no discussion of a new Cold War over Arctic minerals, with Wijkman more worried about warming. He urges ministers to “raise awareness among the public about the serious risks posed by climate change and the necessity of urgent action.”

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