After the gas crisis, the Arctic could be Russia and Europe’s next flashpoint

A new cold front could open up in the political tension between the European Union and Russia over energy. This time in the Arctic.

On Wednesday, the EU put forward proposals that could see it pushing to ban the tapping of new oil, coal and gas deposits in the Arctic in an effort, it said, to protect the region from further disruptive climate change.

Russia, a major holder of Arctic territory where an abundance of its hydrocarbon and fish stocks are found, is not too pleased with the proposals with Russia’s Deputy Prime Minister Alexander Novak telling CNBC Thursday that they were politically-motivated and nonsensical.

“ I was a bit surprised when I heard about this yesterday. Why the Arctic, why not the Equator? One could come up with a number of places in the world where oil and gas production must be banned,” he told CNBC’s Hadley Gamble at the Russian Energy Week conference in Moscow, according to a translation.

“This proposal has no other motivation than political,” he added. “What do these statements tell us – that we need to stop extracting the entire gas produced at the moment? I think that the authors of these proposals have very little understanding of the real state of affairs,” he said.

The EU proposals come at a time when tensions are already high between Russia and the EU when it comes to energy, and specifically natural gas. Prices have been soaring as Europe’s demand is squeezed by tighter-than-expected supplies.

Russia has said it has ramped up gas supplies but critics say it is using its gas exports to the region for political purposes, chiefly its bid to get Germany to certify the Nord Stream 2 gas pipeline. Russia denied it was exploiting Europe’s gas crisis, with President Vladimir Putin insisting to CNBC on Wednesday that Moscow was not using gas a weapon.

Arctic engagement

Tensions in the Arctic have already been growing between regional players for a number of years, particularly in light of Russia’s quiet expansion of its political, economic and military influence there.

Unlike Russia, the EU is a comparatively new player in the Arctic and the bloc, per se, is not a member of the Arctic Council, an intergovernmental forum to provide a means for promoting cooperation, coordination and interaction among the Arctic States, although the Council includes the EU member states Denmark, Finland and Sweden.

The EU appears to be looking to increase its role in the region, however, and in a proposal mooted by the European Commission on Wednesday, it noted that “the Arctic region is of major strategic importance for the European Union, with regard to climate change, raw materials as well as geostrategic influence.”

It said it would aim to “strengthen EU engagement” in the region through “contributing to maintaining peaceful and constructive dialogue and cooperation in a changing geopolitical landscape, to keep the Arctic safe and stable” as well as “pushing for oil, coal and gas to stay in the ground, including in Arctic regions” and “supporting the inclusive and sustainable development of the Arctic regions to the benefit of its inhabitants and future generations.”

The Arctic is an integral part of Russia’s economy and territory, its coastline accounts for 53% of Arctic Ocean coastline and the country’s population in the region totals roughly 2 million people — that’s around half of the people living in the Arctic worldwide, according to the Arctic Institute, a center for circumpolar security studies.

Female polar bear with her two cubs on drifting iceberg in Barents Sea, Russia.
© Vadim Balakin | Moment | Getty Images

Alexei Chekunkov, Russia’s minister for development of the Russian Far East and Arctic, said in June that “the Arctic is the engine of economic growth. It accounts for 10% of our GDP and 20% of our exports” and Russia is aware of sustainability in the region; the theme for Russia’s chairmanship of the Arctic Council, a position it will hold until 2023, is “Responsible Governance for a Sustainable Arctic.

Sustainability is a big question for the region, which is being starkly affected by climate change: The Arctic is warming about twice as fast as the global average, according to the Norwegian Polar Institute, which has warned that “significant regional warming leads to continued loss of sea ice, melting of glaciers and of the Greenland ice cap” with drastic consequences for humans and nature in the region, and the world.

Novak questioned whether the EU proposals meant that people living and working in the region would have to move.

“There are many people living in the Arctic zone of Russia, there are many settlements and communities that inhabit these regions, we generate power to support their activities. What should we deduce from such statements – that we need to put an end to all human activities, to habitation in these regions altogether?” he said Thursday.

He noted that the proposals did not only affect Russia, with the U.S., Canada, and Iceland and Norway (which are both in the European Economic Area but not the EU) also having territory in the Arctic, and who are members of the Arctic Council.

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