The National Post is Canada’s second largest national paper.
The five hotels of the Northwest Territories town of Norman Wells (population: 800) saw more than their fair share of hard hats last year. “You could not get a room there for six months last winter,” said David Ramsay, Northwest Territories’ minister of transportation industry, tourism and investment. “Grocery stores saw a 100% increase in sales; it was unprecedented economic activity for that period of time — we are going to see even more this coming winter.”
Norman Wells is not alone in witnessing this bonanza. Towns and communities across the vast Arctic landscape are waking up to the riches that lie buried beneath, as oil executives scope for prospects and Arctic governments take another ‘strategic’ look at the region’s hydrocarbon and mineral riches.
The area shared by Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden and the United States offers an estimated 46 trillion cubic metres of undiscovered global natural gas, or 30% of the global total. In addition, it holds 90 billion barrels of oil — or 13% of the estimated global total of undiscovered oil, according to a 2008 U.S. Geological Survey.
While the Arctic’s resource potential has been known for decades, the North Pole has historically presented a daunting logistical challenge.
In what may be described as an environmentalist’s worst nightmare, global warming and melting ice in the Arctic are rewarding oil companies with access to its thawing oil, gas and mineral deposits through greater shipping access. But that’s just part of the equation.
“Climate change has reduced the barrier to entry — it is definitely an enabling factor,” says Charles Emmerson, who wrote The Future History of the Arctic and is a senior research fellow at London-based Chatham House. He believes the entire Arctic area could see investments of more than $100-billion over the next decade, primarily in oil and gas, mining and shipping. “Other key drivers include improved technology. Secondly, the cost of producing the fields may be less than before, and more importantly, the price for oil is right — not so much for gas.”
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/07/20/left-out-in-the-cold/