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Arctic oil reserves

Oil markets
By Paul Hodges on 26-Nov-2007

How thick is the ice cap at the North Pole? Will it melt within our lifetime, or will it take a century? Will its major oil and gas reserves become available for exploitation? These are the questions which may be answered by the Vanco Arctic survey, due to take place between February – June next year.

Arctic.bmpA blog reader has kindly sent me details of the proposed expedition. It will aim to resolve, via a 1000 mile survey, current scientific controversy over the precise thickness of the ice. This has apparently proved impossible to assess either by submarine or satellite till now. Then we will know whether the ice will melt within 15 years, at current rates, or within 100 years.

As and when the ice cap melts, global warming is expected to accelerate. The Arctic covers almost 3% of the Earth’s surface, and reflects approximately 80% of the incoming solar energy. If it disappears, the newly exposed ocean could cause a 70% increase in energy absorption, and an additional 0.4-1.0m rise in sea level through the inevitable thermal expansion of the ocean.

On the positive side, the Vanco organisers claim it will enable us to reach new sources of oil and gas, accounting for 25% of the earth’s known reserves. These are already the subject of claims, and counter-claims, by Russia, Canada, Denmark, Norway and the US. 10 billion barrels of oil are thought to be at stake. The new northern ocean will also offer much shorter trading routes.

Will investment bankers one day be preparing their prospectuses for potential new Arctic petrochemical plants?