By Tom Fries Arctic News for April 14 - 22
THE BEST READS THIS WEEK
If you’ve only got a few minutes, these three articles are the best-written and most eye-opening of the week.
1. The Calgary Herald offered a moving article on the history behind Canada's First Nation reserves and the reasons for which aboriginal people still cling to them despite conditions that are sometimes terrible.
2. We (by which I mean “I”) tend to think of Gazprom’s relationships with its external customers as most important. But the oil & gas giant is facing future difficulties funding its own necessary upgrades because of net-loss domestic sales, enforced by price controls in Russia. And Russian domestic consumers constitute 60% of Gazprom's demand. Natural Gas Europe offers a clear and reorienting article on the issue.
3. French company Areva is looking to build, operate and decommission a uranium mine, to be called Kiggavik, near Baker Lake in Nunavut. The listed costs of the mine and the jobs it would bring really open one's eyes to the scale of such projects. Their initial environmental impact statement, weighing in at 10,000 pages, was rejected by Nunavut, and they are preparing to submit a revised version. We all know that the process of setting up such a thing is incredibly complex, but this excellent article from Nunatsiaq News helps to make it really concrete.
BLOOD AND TREASURE
Operation Nunalivut, with 150 Canadian Armed Forces members, continued near Resolute Bay (Ottawa Citizen). As part of this, divers are exploring the 1853 wreck of John Franklin's Breadalbane in Lancaster Sound (Eye on the Arctic). If you’d like, you can read the official statement opening the exercise from Minister Peter MacKay.
If you want a comprehensive overview of Canada’s Northern forces, the government has provided a thorough backgrounder. It’s a great read for anyone interested in the topic, and might be interesting to compare with an overview from Earth Magazine of the US Navy’s planning process for the Arctic of the future.
Mother Russia also had military exercises underway this week. Operation Ladoga concluded, and a Swedish blog offered a great series of photos of the various planes that were involved in the exercise. Russia is of course also looking ahead to the demands of a future Arctic, and is in the process of setting up a degree program for submarine engineering at Northern Arctic Federal University in Arkhangelsk (Barents Observer).
Frightening casual readers with visions of Arctic war continues to be a booming trade. This Associated Press article on the "militarization" of the Arctic (Fox News) was syndicated in so many different news outlets that it became pointless to count. A similar article from Voice of Russia took a marginally more measured tone. Greenpeace – speaking only for myself – I mostly love, but sometimes...not. This post is from John Hocevar, who apparently went through Wikileaks releases to find evidence that “several nations…are ready to go to war” over Arctic resources. And even the German-language press has decided to get in on the game (Der Standard).
THE POLITICAL SCENE
Collaboration was in many ways the watchword for this week. A conference held in Murmansk with representatives of all 8 Arctic states concluded, once again, that international cooperation on search-and-rescue is an absolute necessity if the Northern Sea Route is to be exploited (Voice of Russia). The much talked-about Goose Bay conference of the 8 Arctic defense chiefs also wrapped up this week with an agreement to meet once a year henceforth and to cooperate in disaster mitigation and search-and-rescue efforts (Foreign Policy blogs). Simultaneously, eminence grise of Arctic issues and former Foreign Affairs Minister of Canada Lloyd Axworthy issued a strong call for the US and Canada to work together closely on any and all Arctic issues over the next four years, during which Canada and the US will lead the Arctic Council (The Province).
Increasingly, it looks as though search-and-rescue collaboration may in fact be the seed for future Arctic cooperation of all kinds (Star, Vancouver Sun). And a good thing, too: analysis was released this week of a disastrous rescue mission near Igloolik, Nunavut last October. It shows the weaknesses in our existing capabilities in stark relief (Star). Minister of National Defense Peter MacKay also made a well-timed announcement of an additional $8.1mn investment for 2012 in Canada's search-and-rescue capabilities (Market Watch).
Canada and Denmark also continued to work on a resolution of the Hans Island question, a bone of contention that is providing fodder for great posts like this one, which gives some great backstory, and this one, highlighting the “viciousness” of the conflict. One keeps hoping that an agreement will be reached, but the Danish ambassador told us, so very politely, not to hold our breath (Ottawa Citizen). The larger country in that debate is meanwhile rolling its eyes and tapping its foot impatiently as it hears that the processing of its claim to the Arctic seabed via the UN Commission on the Limits of the Continental Shelf may not be resolved until 2030 (Vancouver Sun).
In Russia, Vladimir Putin’s “state of the union” address to the Russian Duma covers, of course, many different topics, including Arctic oil and gas and sovereignty questions, even if only briefly. It’s long, but worth a read, particularly if such things are your field of study. In his speech, Putin talks about a purported reversal in Russia’s childbearing decline (Barents Observer). His figures are really dramatic, though, so I’m a little bit skeptical.
I was also surprised to learn that 2,500 km of the Northern Sea Route are actually not covered by Russian radar yet. This ties in to Russia's decision to invest in 20 new stations with 15-20 border guards each to observe and manage its Arctic waterways (Russia Today, Barents Nova, Radio Free Europe, Arctic Portal). If you’d like a good overview of Russia’s Arctic ambitions, then take a look at this wonky but thorough review of the most recent edition of Russian Politics and Law, which gives nice summaries of each article.
China’s Arctic aspirations continue to be the stuff of legend. Despite ongoing acrimonious negotiations between Iceland and prominent Chinese developer Huang Nubo, Premier Wen Jiabao started his most recent European jaunt with a trip to the volcanic country, which might provide a “strategic foothold” for China in the Arctic (Reuters). China has the largest embassy in Reykjavik, which may or may not be evidence of the country’s interest in the region (J of Energy Security). The same trip provided an occasion to announce that Sweden may be supporting China's interest in permanent-observer status on the Arctic Council (Washington Post, Business Week). China’s BRIC compatriot India is preparing to test the air systems associated with its INS Vikramiditya. Those air systems include a newly-purchased “Black Panthers” group of fighters and anti-submarine helicopters. Cost for the whole package is reported as $1.504bn (Indrus).
ENERGY and EXTRACTIVE INDUSTRIES
The Lloyd’s – Chatham House report published last week continues to garner a great deal of attention for its perhaps unexpectedly frank language regarding the risks that accompany Arctic oil and gas drilling. Chatham House provided talking points and a download of the full report.
In Russia, Gazprom is facing future difficulties funding its own necessary upgrades because of net losses on sales to its domestic consumers, who constitute 60% of its demand. Prices in Russia are kept artificially low (Natural Gas Europe). Pretty much everyone covered the tit-for-tat agreement between Exxon and Rosneft, which will allow the former access to projects in the Kara Sea (East Prinovozemelsky blocks 1, 2 and 3) and the latter access to projects in Texas, Alberta and the Gulf of Mexico. Reserves in the Kara Sea alone are expected to be in the neighborhood of 85 billion BOE by one account; Rosneft cites oil at 35.8 billion barrels and natural gas at 10 trillion cubic meters. Ownership of projects in the Kara Sea will be 1/3 Exxon, 2/3 Rosneft (Bloomberg, Reuters 1, Reuters 2, Forbes). Exxon CEO Rex Tillerson, Rosneft CEO Eduard Khudainatov and Deputy PM of Russia Igor Sechin announced details this week at the Arctic Oil and Gas Conference in Moscow, and 23 Greenpeace members or supporters got themselves arrested for protesting outside the conference venue (Reuters). A lone voice from the Moscow Times says that the deal is dangerous territory for Exxon because of the shady Rosneft-Kremlin takeover of Yukos (Moscow Times). Take a quick read and decide for yourself. Forbes offers a good, clear explanation of the strategy of the Exxon-Rosneft deal, and others like it that we can expect in the future.
Rosneft is apparently also on a search for in-country and foreign partners for the development of 12 licenses in the Barents and elsewhere. According to Barents Observer, invitations to talk have been sent to Lukoil, TNK-BP, Surgutneftegaz and Bashneft. Meanwhile Novatek is, oh so casually and noncommittally, seeking partners – rumors say EDF – for a Yamal LNG plant (Reuters). Novatek and Gazprom have already inked a deal to partner on gas projects on the Yamal and the Gydan peninsulas (RIA Novosti, 4-traders, Platts).
Confirmation came from the Wall Street Journal and Russia Todayof Putin's readiness to cancel export taxes for offshore projects in Russia's Arctic and to allow private companies’ involvement in those projects. Barents Nova provided some details of how that tax relief will work and how different projects will be categorized. But Anna Kireeva of the Bellona Foundation in Murmansk blasted the Shtokman project in particular, pointing out that the technology which will supposedly enable the project to work is but one failure in a long list. Across the Bering Strait in Alaska, tax reform for oil and gas producers as well as for other industries continues to be difficult to pass. Political maneuvering halted a bill in its tracks this week (Alaska Dispatch).
Output from Prirazlomnoye in the Barents will be delayed by one year, says the IEA, which reduces estimates of growth in Russia's overall gas production by 1% this year (Bloomberg). Betters news came from the Samburg field in the Yamal-Nenets, co-owned by Eni, Gazprom Neft, Enel and Novatek, which is getting ready to come on-line with an initial production of 43,000 bopd and an expected max in 2015 of 145,000 bopd (Reuters).
Russia’s environmental watchdog is preparing a judgment against TNK-BP for leaking between 300,000 and 500,000 tons of oil and other waste products into the Ob and Yenisei river basins annually (Bloomberg), and TNK-BP stock took a modest dive late in the week based on that news (RIA Novosti).
Across the pond in Canada, environmental groups are worried that Ottawa’s proposals to “streamline” the environmental permitting process for large-scale projects will make it dramatically easier for large companies to begin and operate projects without meaningful environmental oversight (Globe and Mail, CBC). Indeed, reaction to this decision breaks down exactly along the political and sectoral lines you would expect. Note that the division of labor between federal and provincial regulators is left unclear in the streamlining initiative. There’s continued concern over Arctic drilling in the US as well, as the federal Oil Spill Commission Action questioned the level of readiness to deal with any future Arctic disaster (OSCA).
Inuvik, meanwhile, continues to wonder how precisely it ought to deal with the disappearance of its natural gas supply. Switch to diesel? Synthetic natural gas? Wood? Looks like there are no easy solutions (National Post). Some people have proposed wind energy as an option, but Qulliq Energy Corp’s experience with wind power in the Canadian North has been…suboptimal (Nunatsiaq News). Alternative energy is also far from clearing a few important hurdles in Yukon, where a waste-to-energy program has been deemed too costly. “There just isn’t a business case there”, says a Yukon Energy spokesperson (Whitehorse Star). In Norway however, Statoil is beginning to look at wind farms to power its offshore rigs, which seems strange somehow but is probably good. Tax breaks for offshore wind projects could, if the right conditions are met, make wind energy cheaper than local gas generators (Aftenbladet 1, Aftenbladet 2). Russia, too, is moving oh-so-slowly towards renewable energy as an idea, pushed in part by the efforts of the Bellona Foundation. At a conference last week, Arkhangelsk announced that its energy mix is becoming increasingly sustainable, moving towards biofuels and away from heating oil and diesel. Small hydro plants to power remote communities, mines etc. are gradually being developed as well (Bellona).
Canadian fuel station operator Couche-Tard has agreed to purchase Statoil’s Statoil Fuel and Retail, giving the Canadian company its first entrée to the European market and allowing Statoil to divest itself of what Statoil CFO Torgrim Reitan seems to see as a non-core business (Aftenbladet). Also in Norway, Dong Energy's Oselvar field on the Norwegian continental shelf began to produce oil this week (Aftenbladet). There is disappointment, however, at an exploratory well on the Eik prospect in the Barents; Noreco, Front Exploration and Petoro came up with nothin’ (Reuters). This doesn’t jive with Oil and Energy Minister Ola Borten Moe’s recent statement that Norwegian companies have a duty to bring up as much as possible from mature fields (Aftenbladet, w/ Google Translate). Does he mean to convey a drive to produce more, or a drive to do as much as possible without creating new wells?
Norway’s oil services firm Aker solutions won a $1.9bn contract with Statoil to provide services on the Norwegian continental shelf (Aftenbladet). Congratulations to their business development office. Aftenbladet also pointed out that, because of tax structures, the Norwegian government ends up paying 78 cents of every dollar that oil companies spend on benefits for their employees, and that the government is thus essentially sponsoring the industry’s benefits packages.
In US oil news this week, Daily Kos published a really strongly-worded piece running down the list of things that are preparing us for the next oil-spill disaster in the Arctic. It’s not upbeat. The Huffington Post followed suit with a similarly sharp, depressing piece from David Yarnold, president of the National Audubon Society. And there’s extensive battle going on in Alaska over potential oil revenues – who gets them? The federal government or the state (Alaska Dispatch)?
Plenty of news in minerals this week. The diamond-mining operations of BHP Billiton and Rio Tinto, including those in Canada, are an object of desire for Kohlberg Kravis Roberts, which is considering purchasing and merging them to create a competitor for De Beers and Alrosa (New York Post). Such a company would control 15% of the world's diamond supply. A pan-territorial "North Works" training program to help channel 1,400 aboriginal workers into high-paying jobs working in northern mines has been proposed in Canada; collaborative funding would total $200mn (upherebusiness). Similar programs are being supported not just by government but by private companies like Agnico-Eagle, which inked an MOU with Nunavut to develop mining curricula at the high school level (Eye on the Arctic). But even once workers are educated, there are many challenges even in the logistics of supporting a workforce for a remote project. Sometimes you need workers to wrangle your workers (Eye on the Arctic).
(Before I launch into the next three paragraphs, let me thank Nunatsiaq News for being the best – and, this week, the only – resource I can find for comprehensive and high-quality reporting on mining issues in northern Canada.)
A program similar to but much smaller than the mines-training programs is in place to encourage residents of Nunavut to move into fields supporting local aviation (Nunatsiaq News), and the federal government has meanwhile added $3 million to the investment fund of the Nunavut Resources Corporation, the first Inuit-owned mining development company, to support its growth (Nunatsiaq News).
Areva is looking to build, operate and decommission a uranium mine, to be called Kiggavik, near Baker Lake in Nunavut. The listed costs of the mine and the jobs it would bring really open one's eyes to the scale and complexity of such projects. Areva’s initial environmental impact statement, weighing in at 10,000 pages (!!!), was rejected by Nunavut, and the company is preparing to submit a revised version. The company is talking about the future of the project cautiously, making clear that, as always, much depends on the going price of uranium (Nunatsiaq News, Eye on the Arctic). But melting permafrost could be an enormous issue there, reducing the company’s ability to contain radiation. See this article from Nunatsiaq News on the damage that’s already occurred to, for example, the Iqaluit airport as a result of melting permafrost.
Elsewhere in Canada’s North, Baffinland’s Mary River iron project released its plans for a 149 km rail line running, in essence, across Baffin Island. It would require “great feats of engineering, stamina, [and] about $1.9 billion”, says Nunatsiaq News. Another massive iron project in the works in Newfoundland and Labrador, a joint venture between India’s Tata Steel Ltd. and New Millenium Iron Corp., is being prepared to ship ore to European markets via Sept-Iles (Nunatsiaq News). Generally speaking, mining companies interested in prospects in Nunavut are hoping for the Nunavut Planning and Project Assessment Act to be implemented, as it would streamline requirements for the permitting process, making the undertaking of projects easier and cheaper (Nunatsiaq News). The overall cost of operating in Nunavut relative to other potential sites is expected to be a matter of increasing concern, warned Patricia Mohr of Scotiabank (Nunatsiaq News).
Central Yukon's Peel River watershed and its minerals are also a bone of contention. Estimates suggest that exploitation of Yukon's mineral resources could help the territory generate up to 7% growth in years ahead, but environmental groups are not interested in yielding pristine wilderness to the backhoe (Star). Meanwhile in Alaska, the proposed Pebble Mine is stuck in a tug-of-war over regulatory oversight between Alaska and the EPA. It will be fascinating to watch this story develop as the EPA proceeds with its Bristol Bay watershed assessment. We’ll see whether fisheries and mining can make function together amicably in this context (Alaska Dispatch). A similar tug of war between Alaska and federal environmental organizations is taking place in a more general sense, as Alaska’s senators argue that NOAA’s involvement in regulation of the Chukchi and Beaufort seas is “beyond the agency’s mission and expertise” (press release).
In Russia, Murmansk is considering supporting the development of a chemical-industry “cluster” related to its existing minerals industries (Barents Nova), and Polyus Gold, the nation’s largest producer, increased production by 27% in Q1 2012 vs Q1 2011. One of the company’s primary gold mines is Kuranakh in Yakutia (RIA Novosti).
SOCIETY, HEALTH and EDUCATION
Icelanders are moving to Norway in greater numbers, in response to the financial crisis. Norway's strong economy provides a great incentive, but with dramatically higher costs, does the math work out (euroviews.eu)? Travel between Finland and Russia has also been eased slightly. European visitors traveling to St. Petersburg via the Allegro train (service from Helsinki to St. Petersburg) will soon need no visa for visits of less than 36 hours (Barents Nova).
In Canada, budget cuts continue to rasp away at the infrastructure that supports native communities. The Calgary Herald offered an excellent and moving article on the history behind Canada's First Nation reserves, and why aboriginal people in Canada still cling to them despite conditions that are sometimes terrible. Indeed, the history of aboriginal people in the Canadian and Alaskan Arctic may stretch further back than thought. Archaeologists are working on further excavation of the 12,000 year old Raven Bluff site near the Kivalina River in Northwest Alaska (Frontier Scientists).
Resolving the complicated and difficult relationship between the federal government and First Nation groups, and bringing the condition of northern aboriginal communities up to those enjoyed by other Canadians elsewhere, will be key to protection of Canada’s North, says Mary Simon of Inuit Tapiriit Kanatami (Embassy Magazine). This will be additionally difficult under current financial constraints. Indeed, Simon’s own ITK has had 40% of its health budget cut by the federal government (Nunatsiaq News). Ottawa is also making efforts to reduce the oversight and paperwork with which community-run health programs in Nunavut are saddled, hoping that this will help to improve service delivery (CBC). In Montreal, a permanent facility for Nunavimmiut from Nunavik who are staying for medical treatment is scheduled to open late in 2013 (Nunatsiaq News).
Next door in Alaska, the state’s Army National Guard helps to provide critical medical care to remote communities (dvidshub.net). It’s no easy task. The Nunavut community of Kugaaruk is also facing some significant challenges: an earlier tidal surge has salted the town's drinking water supply. Hopefully spring runoff will cleanse it again quickly enough to avert the necessity of emergency measures (CBC).
BUSINESS and INDUSTRY
[Shipping]
Lloyd’s Register has just arrived at new rules for double-ended tankers, designed to go stern-first through ice in the absence of an accompanying icebreaker (marinelink.com). For layperson’s details on this, see thisfrom gcaptain.com. The Congressional Research Service came out with a report as well covering possibilities and issues for the upgrading of the USCG’s icebreaker fleet. Thanks to Will Rogers of CNAS for pointing it out.
Monitoring icebergs will of course be an ongoing challenge, and the launch of the new Sentinel-1 satellite constellation scheduled for 2013 will help to provide more complete and frequent coverage of hazards in northern waters (zeenews.india.com). The announcement came from the International Convention for the Safety of Life at Sea and the International Ice Patrol.
A new deep-water section of the Arkhangelsk port is slated for construction (Dredging Today). (This article also has my personal favorite photo of the week.) Also enjoying government support is Canada's port at Churchill. The Churchill Port Utilisation Program will put $25mn over five years towards the goal of keeping Churchill competent as a significant port for grain heading overseas from Canada's farms (MarketWatch).
For a good overview of the world’s existing oil transit chokepoints (useful information for understanding the value of the Northern Sea Route and the Northwest Passage) see this from the US Energy Information Agency.
[Forestry]
RusForest, despite a significant net loss last year, saw its recent rights issue oversubscribed by more than 1/3. Whence this interest? No details were available. But the company now has some sorely-needed cash on hand (TTJ Online).
[Fisheries]
The Alaska Department of Fish and Wildlife and the Western Alaska Salmon Stock Identification Project are road-showing the results of a three-year study into Western Alaska's salmon stocks, helping users of that resource better understand its composition and how best to manage it for the long term (Cordova Times). Meanwhile, this year’s dramatic spread of ice in the Bering Sea is having a starkly negative impact on the snow crab catch (KUCB). Likewise on land, a huge dump of snow is wrecking the start of the trout-fishing season in Yakutat, Alaska (Eye on the Arctic).
SCIENCE, ENVIRONMENT and WILDLIFE
For a general briefing book on the Arctic environment, the European Commission (of all things) provided a newsletter (PDF, for download) covering a number of different Arctic environmental issues. One that is rising to the fore this week is the northward advance of shrubs, which are the leading edge of the boreal forests (Alaska Dispatch). This of course creates a low-albedo feedback loop that, in turn, accelerates warming.
You may recall earlier cries of horror about the Greenland ice sheet’s readiness to melt at lower temperatures than expected, given a very, very long time horizon. I believe this is the actual paper that underlies those earlier headlines (sciencepoles.org). Other research from the Cooperative Institute for Research in Environmental Sciences at UC Boulder suggests that the ice sheet is being lubricated by large releases of meltwater from surface lakes (Science Daily). And the permafrost, we are unsurprised to hear, continues to melt at rates that are visible from year to year (care2.com). This is probably a big issue, but whether we will be able to work up the energy to act on it - that is a different matter. Icebreakers, though, probably can’t be blamed for much ice melt in the North (NSIDC). Maybe all this speculation is wasted breath, though. One gentleman suggeststhat data about reduced Arctic ice extent and volume over years is actually a deceptive result of "drift" in the measurement instruments.
In other science news, the first edition of Fram Center newsletter is well worth a read, and a fun study involving sending balloons with instruments aloft into the aurora borealis conducted another round this past week. Where the balloons have landed, though, nobody yet knows (Alaska Dispatch).
Studies of polar bear DNA seem to indicate that the species diverged about 600,000 years ago, much earlier than previously thought (Alaska Dispatch). Another top predator that has been frequently on the lips of environmental activists, the gray wolf, has been doing real damage to herds of domestic reindeer in Yakutia (RIA Novosti). On the prey side of things, the Arctic ringed seal and the Beringia DPS bearded seal may be added to the endangered species list following final review by NOAA (Alaska Dispatch), but Norway's ambassador to Canada, in a speech in Iqaluit, expressed her country's strong support for Canada’s seal hunt as a part of aboriginal life and tradition, and her readiness to fight the EU ban on seal products (Nunatsiaq News).
In other animal news, massive flocks of cranes herald the arrival of spring in northern Sweden (Eye on the Arctic), and rapid adaptation in lake trout in the Northwest Territories may show that some species are capable of responding to climate change (Montreal Gazette) reasonably rapidly.
THE SPORTING LIFE
Russia's 5th annual North Pole skiing challenge is underway, with the seven "best-trained and most sportive" young athletes selected. These “fortunate” young contestants depart from the Borneo Arctic station for the 100-km challenge (Voice of Russia). Slightly eastward, A 65 year-old Frenchman is trying to be the second person to cross the Bering Strait by windsurfing (Surfer Today). The only other person to do so successfully managed the feat in 1979. Bon voyage and bonne chance. Wind will also be sending young people flying around Nunavik’s Hudson Strait in the upcoming kite-skiing championships in Kangiqsujuak (Nunatsiaq News).
THE GRAB BAG
Russia’s Shiveluch volcano – its northernmost – was spewing ash to a height of 31,000 feet earlier this week (RIA Novosti).
Alaska’s permanent fund, a receptacle for a good portion of the state’s hydrocarbon revenues, did well last year after a tough season during the financial crisis (Alaska Dispatch).
Vladimir Putin’s cousin, Igor Putin, has been named chairman of the board of Russky Zemelny Bank, which he “plans to turn […] into a backer of large-scale government projects”. Give me a second to recover from the shock of this news (Moscow Times).
Near Murmansk, two Russian peninsulas (Rybachy and Sredny) are under consideration for special protected status as parks (Barents Nova).
The Swedish city of Kiruna has been endangered by heavy mining, and the city is holding a contest among young architects to design a new city center (Eye on the Arctic).
A facility near Cape Dyer, Nunavut, is just one of the DEW-line (a radar line of Cold War vintage stretching across Canada’s North) facilities the Canadian government plans to clean up at a cost of $575mn. There’s a great photo in this article from the Winnipeg Free Press showing thousands of containers full of contaminated earth and other junk.
Three fuel trucks broke through the ice road between Tuktoyaktuk and Aklavik in the Canadian North. This is the largest such incident on record (CBC).
The Government of the Northwest Territories reached a tentative agreement with its union for the next four years (CBC).
Lastly, here’s a great video from Frontier Scientists on the detective work that went in to discovering where spectacled eider ducks breed.
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