I have followed the past two days, the political section of the Arctic Frontiers conference, with great interest, with the thought of the Paris climate conference in November always at the back of my mind.
Clearly, in a country rich from the sale of oil, cutting climate-killing emissions is a tricky issue. The oil sector was strongly represented here, but so too were those who see the need for a transition away from fossil fuels in the interests of the global climate.
With climate change opening the Arctic to development and the search for the oil, gas and minerals thought to be locked beneath the icy region, this year’s Arctic Frontiers meeting has attracted record participation. The impact of low oil prices on development prospects, and political tensions between Russia and western Arctic states have heightened interest in listening to what experts and decision-makers have to say on the relation between climate and energy.
With prime ministers from Norway and Finland and other ministers from Sweden and Denmark, as well as the US special Representative for the Arctic and the Russian President’s special representative for international polar cooperation addressing the meeting, media interest is high in this Arctic city, two hours flight north of the Norwegian capital, Oslo. (Looking at my flight schedule, I see Oslo is actually closer to Frankfurt than to the Arctic north of the country).
Do we need Arctic oil in a warming world?
The Norwegian premier Erna Solberg was here for the presentation of a report on sustainable growth in the north, a joint venture by Norway, Sweden and Finland. Gas is one of the four drivers named in the report. She left no doubt about her country’s continuing interest in oil and gas exploitation in the Arctic region. She told me in a brief interview she sees no contradiction between this and attempts to reach a new world climate agreement in Paris at the end of the year:
“’We have an oil and gas strategy. There are many not yet found areas where we think there is more gas. We think gas is an important part of a future energy mix, and I think we have to explore to find it.”
The same day, the Norwegian government allocated new licenses for exploration in the north-western Barents sea area of the Arctic. Many of the blocks released for petroleum licensing are close to the sea ice zone that had previously been protected. The zones have now been redefined. Conservation groups are upset. WWF Norway says the announcement is risky, as there is still a lack of knowledge about species and ecosystems in this area.
Will low oil price halt Arctic energy development?
With oil prices at a record low, environmentalists hope Arctic development will slow down or even be put “on ice” permanently. Representatives of WWF told the delegates in Tromso – including high-ranking representatives of major oil companies Statoil and Rosneft – the world does not need oil from the Arctic. And gas should be only a “transition fuel”. Samantha Smith, leader of the ngo’s Global Climate and Energy Initiative, quoted the recent study indicating that 50% of the world’s remaining gas and 30% of the oil must stay in the ground if the two degrees centigrade target for maximum global temperature rise agreed by the international community is to have any chance of being adhered to. She presented an alternative vision of “a thriving green economy in the white north”, with renewable energies replacing the search for oil and gas.
Business rethinking fossil investment?
As I wrote here on the Ice Blog after the Sunday evening opening, it is not only the environment lobby that is advocating a switch to renewable enerergy. Jens Ulltveit-Moe, the CEO of Umoe, one of the largest, privately owned companies in Norway, active amongst other things in shipping and energy, said with the current low oil price, Arctic oil was simply not viable, and this would remain the case for many years to come. And by then, he said, the EU’s climate targets and the international support for a two-degree target would make fossil fuels a non-option.
But Sjell Giæver, Director of Petroarctic and Tim Dodson, Norwegian Statoil’s Head of Global Exploration, insisted short-term price drops alone would not halt Arctic exploration. The region was the last place to discover large new reservoirs to satisfy continuing high demand for oil and gas for an increasing world population.
Oil ventures in the Arctic have not been particularly successful in recent years. Statoil’s Dobson admits the biggest ever exploration drilling programme in the Barents Sea last year had a disappointing outcome. Statoil and others have also withdrawn from the hunt for oil off the coast of Greenland.
Russia hungry for Arctic energy
But the Russian President’s Special Representative for International Cooperation in the Arctic, Arthur Chilingarov, who is also a Member of the Board of Directors at the Russian oil giant Rosneft, stressed the company had completed construction of the northernmost well in the world last September. He said a new oil and gas field has been discovered and the program of Rosneft for 2015 to 2019 provided for a large volume of prospecting and drilling in the western part of the Arctic.
One factor however that is slowing Russian activity the Arctic is the implementation of sanctions by European countries and the USA on account of the tensions over Ukraine. Russia has turned to China and other countries for help, but the lack of western technology is an obstacle to further development in a region where bad weather, ice, remoteness and complete darkness in the winter months make oil and gas development a risky business.
There is a clear tendency amongst those involved in Arctic cooperation to play down the sanctions and keep political tensions out of the region. Norwegian President Solberg told me: “We have a good relationship in the Arctic Council with Russia. We have said we will be in line with Europe on sanctions, although Norway is one of the countries hit most by the counter-sanctions from Russia, for instance the fact that oil and gas exploration are among the sanction areas.”
But in the meantime, on a day-to-day basis, cooperation continues, for instance in the joint management of fish resources, said Solberg.
Business as usual?
While the debate continued in the political section of Arctic Frontiers, a new, business strand of the conference opened in parallel. It focuses – on oil, gas and minerals. Olav Orheim from GRID Arendal, a centre that works with UNEP, stressed that a lot of people here are in favour of Arctic oil and gas exploration, in the interests of jobs and economic benefits.Yet after the publication of last year’s IPCC report and with climate change high on the international agenda, there seems to be a wider acceptance here in Tromso of the disconnect between burning fossil fuels and the ever more urgent need to reduce greenhouse gas emissions.
Gunnar Sand is Vice President of SINTEF, the Norwegian “Foundation for Scientific and Industrial Research”, which has close ties to the oil business. From a moral point of view, “we all want to stay below the two degree limit”, says Sand. But it is not possible to change a society and an infrastructure based on fossil fuels overnight.
Technical progress too slow to stop warming
Technology for renewable energy is still not developing fast enough, says Sand. Emission reduction scenarios also rely heavily on carbon capture and storage (CCS), which would reduce emissions from fossil fuel burning and bridge the transition to a low-carbon economy. But the technology, which he himself has been involved in, is moving too slowly. I first met him during a visit to Svalbard, when he told me about a carbon capture and storage project, designed to capture emissions from Longyearbjen’s power station underground. He confirmed in Tromso that it has never been put into action.
Global warming, Sand says, is the most serious challenge of our time. This has to be reflected in political priorities. Governments have to create economic incentives to speed up change.
US special representative ex-Admiral Robert Papp indicated dealing with climate change would be one of the key policy drivers when the USA takes over the Chair of the Arctic Council, the international body that coordinates Arctic affairs, in April.
The Chair of the US Arctic Research Commission Fran Ulmer says a carbon tax would be the best way forward, to encourage industry and consumers to save energy and cut emissions. But she acknowledged the reluctance of governments to impose decisions that could upset their voters at the next election. That is the reality we face as countries weigh up their pledges for the November climate conference in Paris.