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The Coming Age of Arctic Oil and Gas Development


Inuit Cautiously Prepare for the Future

May/June 2011 | by Whit Fraser

The Inuit Circumpolar Council (ICC), which represents 160 thousand Inuit living in Canada, Greenland, Alaska and Russia, is developing a common position for future environmentally sensitive oil and gas exploration and development in Arctic waters.

The Inuit Council agreed a framework for a formal “Declaration on Resource Development in Inuit Nunaat” during a two-day summit of Arctic Inuit leaders in Ottawa January 23 to 24. The word “Nunaat” means the traditional Inuit homelands.

The need for a clarified Inuit position emerged at the Copenhagen Convention of Climate Change in December 2009, when Inuit from the four countries were faced with the conflict between combating worldwide greenhouse gas emissions while at the same time encouraging non renewable resource development especially for oil and gas including offshore areas.

When ICC met for its general assembly held in Nuuk, Greenland, in July 2010, the Inuit leadership got its marching orders. “We were given a clear message from the delegates at the General Assembly in July to move forward on many mandates,” said ICC Chair and Greenlander Aqqaluk Lynge, “but the most urgent they told us was to plan an Inuit leaders’ summit on resource development.”

The Premier of Greenland, Kuupik Kleist, is leading the declaration and clarification of the Inuit position. Before becoming Premier of Greenland, Kleist had a long association with the Inuit Circumpolar Council that had hosted the meeting in Ottawa in January 2010.

“Economic, social and political realities,” he said, “make it imperative that Inuit develop a clear position on resource development, especially on the timely, political and environmentally sensitive matter of offshore.”

Greenland and Inuit are very aware of the gulf oil blowout disaster and the calls around the world for a ban on offshore drilling.

At the same time, Greenland has opened areas in the Davis Strait to offshore drilling and has been encouraged by early results offered by Cairn Energy of the UK.

Kleist adds if Inuit want “greater political and economic freedom, then the paramount question we must ask ourselves is what price are we prepared to pay?”

In 2009, the fifty-six thousand Greenlanders, of who about 80 per cent are Inuit, won that political and economic freedom in the form of self-reliance and control over resources following 30 years of difficult negotiations with Denmark?

According to the United States geological survey, Greenland waters may contain up to 50 billion barrels of oil, the equivalent of Libya.

While Circumpolar Inuit use the term “open for business” they’re also clear that they will set stringent economic and environmental conditions on development.

ICC’s future support for offshore drilling is directly tied to the Intergovernmental Arctic Council’s already published “Offshore Oil and Gas Guidelines” stating these standards are the “minimum requirements that must be met.”

The Inuit hold a seat as permanent participants on the Arctic Council that is comprised of Governments representing Canada, Denmark, Finland, Iceland, Sweden, Russia, and the United States.

Lynge says the guidelines reflect the fact that “Arctic lands and waters exist in one of the extreme climates where Inuit still depend on the land and sea for their livelihood. These guidelines focus on the specific challenges of drilling in Arctic waters, including ice, weather conditions and distances”.

The guidelines also call for stringent environmental protection measures, including standby drilling rigs and clean up equipment on-site and an international fund to cover liabilities and compensation in the event of a major accident.

The Ottawa summit also stated the Declaration must contain other principles; including assurance that Inuit are primary beneficiaries of future developments and ensuring development respect the UN declaration on the Rights of Indigenous Peoples and Inuit legal rights.

The decision to formalize an Inuit Circumpolar position on resource Development comes after 40 or more year’s experience, both positive and negative, with oil and gas exploration and development in all circumpolar countries.

Edward Itta, Mayor of the North Slope Borough of Alaska that takes in the Prudhoe Bay region, said in his region oil developments lead to the massive Alaska land claim settlement, and that gave Alaskan Inuit more political and economic independence.

Itta said they weren’t prepared for the development in the sixties and seventies but today with educated young leaders, they can negotiate binding social economic and environmental impact agreements. “I only see one way to maintain our economy and subsistence and it is by working with them,” (industry and governments) said Itta.

Canadian Nellie Cournoyea, a former premier of the NWT and Chair of the Inuvialuit Regional Corporation, and one of the partners in the proposed Mackenzie Valley Pipeline, echoed the view that the economic future for Inuit is closely tied to oil and gas development.

Cournoyea, who is also well known within the Canadian oil Industry as a tough negotiator, says the Inuit declaration must reflect the constitutionally binding comprehensive Canadian Inuit Land Claim Settlements, adding that “a government benefits package is much lighter than our claims. The will and intent of those claims needs to be expressed in the Arctic Council.”

Premier Kleist acknowledges Greenland’s decision to proceed with drilling in the Davis Strait is a matter of considerable concern to the Government of Canada. “I have had a dialogue with the Canadian Minister of the Environment and now Canadian employees will be on the drilling sites along our West Coast.”

Canada’s Minister responsible for the Northern regions, Health Minister Leona Aglukkaq, who is also the conservative MP for Nunavut, put the federal government clearly on side with the Inuit. “Canada is actively taking on the same issues you are here to discuss, namely resource development in the Arctic. Internationally, we continue to support the Arctic Council as the leading forum to advance our Arctic foreign policy.”

Although the Government of Nunavut did not attend the Summit because of a conflict with the opening of the Nunavut Legislative Assembly, recent initiatives by Nunavut indicate the Territory is concerned that it is not getting enough attention from petroleum companies. This past November, the Nunavut Government sponsored a symposium promoting the potential of its offshore areas for oil and gas.

The proposed Inuit Circumpolar Council’s declaration offers considerable clarity to the oil industry and governments because, in spite of their previous opposition to large-scale resource extraction, Inuit are, in Premier Kleist’s words, “part of the global economy.” It is also in that same context that the Inuit leaders in the circumpolar Arctic are clear they will be tough negotiators and deal makers on every front: environmental protection, revenue sharing, social-economic benefits and controls.

Interestingly, Inuit leaders from the four circumpolar countries draw a clear dichotomy between offshore oil and gas exploration and mining. Increasingly in recent years, federal and territorial Governments have been putting more and more economic priority on mineral development and less on petroleum.

Now, Inuit organizations are reminding governments of their long held concerns and opposition towards uranium mining. In the new territory of Nunavut, both the government and land claim organization, Nunavut Tunngavik, have called for reviews of uranium mining policies.

In Greenland, opposition to uranium mining has not changed and the ICC Chairman Aqqaluk Lynge says a move towards a Circumpolar Declaration on Resource Development is not designed to “reopen or change” the organizations long held policy opposing uranium mining in the circumpolar Arctic.

Canada’s National Inuit Leader Mary Simon told a news conference after the meeting that in her view mines have to be considered “on a case by case basis”.

No doubt, the recent nuclear crisis in Japan as a result of a double barrelled earthquake and tsunami catastrophe will bring the uranium question into even sharper focus, at least in Canada which holds some of the world’s potentially largest uranium deposits.

The apparent contradiction between petroleum development, including offshore areas and uranium mining, may be traced to the Arctic Council itself that worked very closely with the aboriginal permanent participants over the past 20 years to address aboriginal concerns and build effective partnerships.

The Arctic Council guidelines make important cultural and geographic recommendations that are critical to gaining Inuit support: “measures should be taken to recognize and accommodate cultural heritage, values, practices, rights and resource use of indigenous residents.”

For Greenland, which is a leader among four Inuit Arctic nations on oil development, the guidelines have provided enough comfort to have granted 20 exploration licences along its west coast.

“If Greenland stayed away from exploiting its natural resources then some other place on earth will do it says,” Premier Kleist. “But we are also doing it under the strongest precautions and with the best technology and practices.”

These are the very same kind of words and assurances used by top executives and politicians to allay concerns about nuclear power plants in Japan and deepwater drilling in the Gulf of Mexico.