Harvesting Arctic Resources

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Harvesting Arctic Resources

According to the Berkeley Earth Surface Temperature study, there is now conclusive evidence that the average world land temperature has gone up by 1° Celsius since the mid-1950s.1 And whether it’s caused by human activity, natural phenomena, or a combination of the two, it’s likely that global warming will make the Arctic region increasingly accessible to commercial development over the next 20 years.

This commercial development of the Arctic is extremely important for the world economy for at least four reasons.

  • First, the Arctic represents a vast new frontier for oil and natural gas exploration. Huge deposits of oil and gas have already been discovered in the Arctic and these likely represent only a tiny fraction of what can be extracted. According to the United States Geological Survey, as much as 13 percent of the world’s untapped oil and 30 percent of its untapped natural gas could lie under the floor of the Arctic Ocean.2
  • Second, the region is likely to yield a wealth of minerals. As explained in a McKinsey Global Institute report titled Resource Revolution,3 the world’s demand for minerals such as iron ore, uranium, copper, manganese, and gold will grow explosively over the next two decades. The mineral deposits outside the Arctic that have not yet been exploited are increasingly expensive to mine, lie in politically unstable regions, or both. However, a report by Polaris Project Partners estimates that the Arctic sea floor is brimming with massive deposits of gold, copper, coal, diamonds, iron ore, lead, zinc, and nickel. All of these were considered inaccessible until the ice began to melt.4 Now, according to a Lloyds/Chatham House Risk Insight5 report, Russia is already operating 25 mines in the Arctic, while Alaska’s exports of zinc, lead, gold, and copper amounted to nearly 40 percent of the state’s foreign export earnings in 2010.
  • The third reason for the Arctic’s high economic value is its potential role as a global trade route. Since the 1500s, businesses have dreamed of accessing a shortcut between Europe and Asia via the “top of the world.” However, Arctic shipping routes which, until recently, remained impassable year-round are now open for months at a time in the summer. These sea lanes through the Arctic can dramatically reduce shipping costs and times. The U.S. Coast Guard recently reported that the number of ships crossing the Bering Strait has doubled versus just a few years earlier, with about 400 passages counted in 2011...

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