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Polar Ice Thaw Exploited by Russian Energy Developers

July 26th, 2013 | by Morris Beschloss | Comments

While post-Soviet Union Russian businesses are not exactly known for their innovative acumen, Moscow has jumped to a big lead in exploiting the opportunities made available through the rapid melting of the North Polar icecaps, and the waters around it.

With an Arctic coastline that dwarfs a combination of Canada, Norway, Greenland (Denmark), and Alaska (U.S.), the Russians are already planning both the huge natural resources that ice cap melting made possible for mining, as well as opening the opportunities to directly access the lucrative Asian markets by the subsequent sailable seas.

A significant example of Russia’s possibilities already active in the groundwork stages, is a multi-thousand mile stretch of ice-free waters where Russian energy company, Novatek, controls vast natural gas deposits. This gives Novatek a straight ice-free water shot directly to the enormous Chinese markets. This ties right in with the recent bi-national agreements signed by the two nations inhabiting the world’s largest population and land masses respectively. Novatek is partnering with French energy giant Total and the China National Petroleum Corporation, already in the early stages of a $20 billion liquified natural gas plan on Russia’s central Arctic coast.

With the “Northeast Passage” shipping lanes opened up only four years ago, a new updated fleet of oil tankers will be ready to supplement Russia’s already massive natural gas business, whose pipelines are dominating the former Soviet Republics of Ukraine, and Georgia, as well as most of eastern and central Europe.

This dovetails with the most recent energy outlook, published by the U.S. Energy Administration which projects a 56% increase in energy demand by 2040. Natural gas is a significant component of this expansion, which will further benefit Russia and the U.S., barring potential interference by the Environmental Protection Agency, which has stated its indifference to America’s economic benefits.

In addition to opening sea lanes from Siberia, the melting icecap has opened more of the sea floor for exploration. Although such advantages will also eventually accrue to the previously mentioned nations bordering the Arctic ice cap, Russia has the advantage of overwhelming exposure, as well as geographic positioning to the dynamic Asian markets’ sea lanes.

Russia’s Novatek has also developed a swap arrangement with Qatar, the Arabian major producer of oil and natural gas. This would allow Qatar to fulfill Novatek’s external newfound winter time obligations, during the most in-depth winter months, while supplementing Qatar’s natural gas shipments to Novatek’s European customers in the summer.

While the U.S. lays claim to a limited portion of the major resource material available in the vast stretches of the polar areas, little interest has as yet been evoked by American-affiliated energy development corporations. This is typical of the Administration’s current opposition to global expansion, based on American-controlled resources.

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