The Arctic This Week Take Five: Week of October 5, 2020
Lundin Doubles Down Swedish Investment in Norwegian Arctic Oil
On October 5, Lundin, a Swedish oil company, simultaneously announced plans to drill three exploration wells in the Barents Sea during the first quarter of 2020 and to buy stakes in oil discoveries, from Idemitsu, a Japanese company. Through the $125 million deal with Idemitsu, Lundin will add 70 billion barrels of oil to Sweden’s strategic reserves, and will acquire near-50% ownership of two projects in the Norwegian Barents Sea, the Alta find and Polmak exploration. (Barents Observer, Reuters, Reuters)
Take 1: Although these investments and explorations come from private companies, they were made possible by significant tax credits and a support package Norway offered the oil industry this June. They consolidate Swedish investment in Norwegian Arctic oil, and signify both nations’ commitment to oil development in the Arctic as a long-term economic baseline. This investment comes within days of the announcement that 2020 was the hottest September on record in Europe, and despite recognition by both governments of the imminent need to reduce dependency on fossil fuels to meet emission reduction targets. The soundness of the investment on a purely economic basis is also yet to be seen. The future of the oil market remains uncertain overall and Equinor, Norway’s state oil company, confirmed this week that the pandemic has pushed up the costs and minimized returns on its offshore oil and gas developments.
Russian Criminal Investigation Follows Die-Off of Marine Life in Kamchatka
On Wednesday October 7, Russia opened a criminal investigation into the source of oil-based pollution which caused a mass die-off of marine life and adverse human health effects off the coast of Kamchatka, just south of the Arctic Circle. The announcement follows the declaration of an “ecological disaster” by Greenpeace in the area last week, and a report to regional authorities by Russian scientists on Tuesday, October 6, which confirmed that nearly all marine life in Avacha Bay (on the Southern coast of Kamchatka) had been killed. The appointed Russian Investigative Committee has not named suspected sources of the pollution. According to the WWF, the pollution does not appear to be the result of an oil spill – rather it is “likely caused by a highly soluble substance.” (Newsweek, Reuters, Reuters, Reuters, The Guardian)
Take 2: The establishment of a criminal investigation is a sudden and strong response to pollution that was originally blamed on storms by Russian authorities and has been largely ignored by them over the course of the last month. The sudden change of tune reflects pressure from above, and is driven by Russia’s ambition to rebrand Russia as a transparent and environmentally responsible developer of Arctic resources. Indeed, Russia’s ecology minister, Dmitry Kobylkin, said in televised comments that Russian president Vladimir Putin had directly ordered him to establish the cause of the situation. Putin also reacted strongly to the late reporting of an oil leak at Nornickel’s plant in the Siberian Arctic this May, as discussed below.
Nornickel Disputes Cost of Environmental Damage Caused by Arctic Fuel Spill
On October 5, Reuters reported that Nornickel estimated the cost of its fuel spill in the Arctic this May to be 21.4 billion rubles ($273 million). This figure was produced by Nornickel’s power subsidiary, NTEC, and is 86% lower than the 148 billion rubles ($1.81 billion) in damage claimed by a Russian environmental watchdog organization, which will bring Nornickel to court over the spill next Monday, October 12th. Nornickel currently estimates the total cleanup and rehabilitation costs to be 921 billion rubles ($12 billion), and says the watchdog applied an unreasonable multiple to the figure for a delayed response that the company does not acknowledge. (Reuters, TASS)
Take 3: This oil spill was huge – 21,000 tons of diesel. Greenpeace compared it to the Exxon Valdez oil spill in scale, and Putin was publicly furious about Nornickel’s delayed response and acknowledgement of it. Nornickel is now clearly under national pressure to save face, and will want to use this court hearing and dramatically reduced estimate of the spill’s environmental costs to downplay the damage and emphasize its commitment to safe, sustainable development. Since the spill, Nornickel has invited the Siberian Branch of the Russian Academy of Sciences to send a large scientific expedition to the Taimyr Peninsula – the site of many operating and proposed extractive industries – to conduct a large-scale ecological survey, and tasked them with producing recommendations for industrial companies operating in the Arctic on how to preserve nature. Not surprisingly the preliminary findings suggest that the expedition is in tune with an attempt to greenwash and minimize the event.
Russian Hypersonic Missiles Test Launch over Arctic Kola Peninsula
On Wednesday October 7, Valery Gerasimov, the Russian Army’s Chief of General Staff, told Russian President Vladimir Putin that Russia had successfully test launched its Tsirkon hypersonic cruise missile from the Russian Northern Fleet frigate, Admiral Gorshkov. According to Gerasimov, it is the first time such a missile launched from a warship has hit its target at sea. The missile flew 450 kilometers (280 miles) over the Kola Peninsula in four and a half minutes, and reached speeds of more than Mach 8, which is 8 times the speed of sound. (Barents Observer, Reuters)
Take 4: Missiles or candles on your cake? Wednesday was indeed Russian President Vladimir Putin’s birthday, and this is a welcome present for him. He has touted the Tsirkon missiles as a “new generation” of Russian weapons, and publicly commended the accomplishment on Wednesday. Amplifying the message that these missile tests send is particularly strategic at this moment, as weapons control tensions are high between the U.S. and Russia, and the last major nuclear arms pact between the two powers, New START, is due to expire in February. Hypersonic missiles travel faster than conventional ballistics, and are more likely to be able to penetrate the US’ current missile defenses. More generally, Putin has repeatedly pledged to increase Russia’s military presence in the Arctic, and this successful test is a powerful symbol of accomplishment towards that end.
Five Tribal Governments Sue Federal Government Over Ambler Road Permit
This Wednesday, Oct. 7, the Anchorage Daily News reported that the Tanana Chief’s Conference filed a suit against the Federal Government over a review of the Ambler Road’s regional impacts, which they say was “rushed, flawed, premature and inadequate.” The Conference represents 42 tribes in Interior Alaska, which seek to nullify a federal permit issued by the U.S. Bureau of Land Management this July for the construction of a road link between Alaska’s minimal road system north of Fairbanks to the Ambler Mining District. (ADN, Fairbanks Daily News Miner)
Take 5: The Ambler Road has been fought across many decades and multiple U.S. administrations, and is one amid a large swath of controversial resource development projects in Alaska that the Trump administration has either pushed through or sought to push through during its term. This suit reflects tribal and environmental entities’ hope that if permitting can remain caught in court, realization of the actual road may be avoided in the event that a new administration is elected in November. On the flip side, the Trump administration is looking to shore-up their campaign promises to cut bureaucratic red tape and create jobs in natural resources. This effort is in line with other efforts to open Alaskan resources to development in recent months, some of which – the attempt to issue permits for the Pebble mine, the opening of the Arctic National Wildlife Refuge to oil exploration, and attempts to overturn the “roadless rule” in the Tongass National Forest – remain similarly embattled in the lead-up to elections.