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Profiteering from the Arctic Thaw

It's always about the money..




By Erich Wiedemann

Global warming isn't necessarily the catastrophe it's made out to be -- at least not for multinational oil companies. Shrinking ice caps would reveal the Arctic's massive energy sources and shorten tanker routes by thousands of miles.

Ice-cap melting may be bad news for the polar bears in ManitobaCanada, but it is great news for Pat Broe of Denver. When the ice melts in the Arctic, the polar predators have to search for new hunting grounds or starve -- but Broe doesn't mind. He figures global warming will make him around $100 million a year.

His friends laughed at him when he bought the run-down port in Churchill -- a tiny outpost of a thousand souls on the Hudson Bay. What could he possibly want with a harbor in one of the most deserted places on the planet that's frozen over a big chunk of the year?

Wait and see, said Broe. He only paid a symbolic price of seven dollars -- not a bad price for a port. He knew that time was on his side. Temperatures in the Northern Hemisphere are rising twice as fast as in the southern half. The summers are getting longer and the pack ice is getting thinner. By 2015 the North Pole is expected to be navigable for normal ships six months out of the year. It's then that a golden age will dawn upon Churchill.

Via Arctic waterways, an oil tanker only needs a week to make it from the Russian port city Murmansk on the Barents Sea to the east coast of Canada. That's only half the time it takes from Abu Dhabi on the Persian Gulf to Galveston, Texas. And from Churchill to Chicago on the Hudson Bay Railway, it's not much further than from Texas to the Windy City. Tankers from Venezuela to Japan can even save some 12,000 kilometers (7,500 miles) by traveling over the pole.

Of course, with rising ocean temperatures comes an increased danger of icebergs, but at least the Arctic oil fields aren't in a region plagued by political instability. No suicide bombers, no kidnappings, no explosions. What risk there is up north, is nothing big oil companies aren't happy to take on.

The first cargo likely to be transported via the Northwest Passage is Russian oil from Siberia destined for North America. The melting ice will also make it easier to get to oil and natural gas fields that are still blocked by pack ice.

The Arctic is a giant treasure trove for energy multinationals. A quarter of the world's oil and gas reserves are estimated to be hidden underneath its rapidly shrinking ice. At current market values they would be worth $1.5 to $2 trillion. There are even proven oil deposits at the North Pole itself.

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posted by ... @ 9:35 PM