3/12: James Astil, Political Editor, The Economist, begins the meeting:
Three Pillars on which much Arctic discussion began:
(1) Vast changes (climate) in the High North creating opportunities;
(2) Technological drive creating massive development;
(3) Dramatic developments were harmonious, because of the interest in Arctic countries to keep the peace;
Today: Only the first pillar remains in place. And there is now the more vexed question of Arctic security.
As a place to develop oil resources, has the Arctic been oversold? And, is it still this harmonious location with peace among countries? Many thanks to DNV GL, Diamond Sponsorship, and Silver Sponsors, Nordic Carriers, and DNB Bank.
Open to the press (no Chatham rule).
Up now is the first speaker, Minister of Foreign Affairs, Norway, Børge Brende. Challenges in the region suggest we focus on the Arctic. Opportunities in the High North ensure we focus on solutions. Attractions in the High North are to be found in the Arctic itself. It is and should be a region of peaceful cooperation, respect of international law and sustainable resources. Our goal for Norwegian Arctic policy is to ensure that peace and stability (for innovation and global environment) continue.
I just had conversations with my good friend John Kerry in the United States, and we are all invested in creating the Arctic as a peaceful productive place. Asian countries are lining up to participate in the Arctic council. We never believed, or at least I never believed, that the Arctic would in the short run replace the Suez canal, nevertheless, we keep planning, exploring, and recognizing that this process is painstaking and deliberate activity.
[references “Nansen” without last name (Fridtijof) as part of the century of Norwegian discovery, ed.]. We see the global effects (affects) of changes, that are alarming, excellerating global warming, 2015 will be a decisive year on the “war on climate change”. Short term changes in supply/demand do not change the geological knowledge in the ground. It is still expected that global demand for energy will increase by 40 percent and oil will be dominant for decades to come (even though we have to make a shift toward natural gas). Safe to assume that Arctic gas will have its day. Arctic oil and gas operates under the most strict conditions in the world. The way in which we meet the energy of the future must survive the judgement of future generations, which requires peace, stability and environmental sustainability. Robust defense enables security. Overlapping claims will be settled within the established legal framework. Well functioning political institutions such as Arctic Council are required for smooth functioning of cooperation among the Arctic states.
Establishment of Arctic economic council. Norwegian-Russian relations have been productive in the past as seen in regulation over cod fishing. “It was tough 15 years ago to listen to scientists, but we are now seeing the yield of listening to sound advice.” Russia staying out of Ukraine would be helpful (paraphrase, ed.). The modern Arctic adventure is just beginning.
Okay, well, up now we have Artur Wilczynski, Ambassador of Canada to Norway, talking about the importance of the North to Northerners, but in fact, I have not been able to listen to a word he has said, because of the talented Dr. Berit Kristofferson, who is requesting that we should have coffee, and I (after a brief rock-paper-scissoring over the privilege) have since ventured out to the coffee bar.
And here she is, recently minted Dr. of Philosophy in Political Science and Geography with a wonderful dissertation on Arctic oil and gas development (as “opportunistic adaptation”), and of course, seen here enjoying the coffee that I graciously left the ballroom to provide… Ah, up now we have an American, Julie Furuta-Toy, Charge d’Affaires, US Embassy in Norway. Ms. Furuta-Toy is outlining the importance of the American government’s ability to carry out a safe and secure leadership, as the country begins to take over the Arctic Council chairmanship over the next two years. The Americans remain inspired by Canada’s previous leadership on Arctic Council, and want to place remote communities in the Arctic on the top of the agenda, especially given the climate change impacts.
Okay, well, up now we have a group discussion between James Astill, and the two previous speakers, with James asking about differences between Canada, America and the Norwegian Arctic. Artur, making the case that Norwegian live in Norway, and in Arctic Norway, too. While most Canadian live “along a narrow band” of the US-Canadian border. Americans are not very aware of Alaska, but are aware of its vast untrammelled wilderness that requires safeguarding, according to Ms. Furuta-Toy, having these vast areas to be preserved in terms of prosperity.
Timo Koivurova, Research Professor, Northern Institute for Environmental and Minority Law, Arctic Centre, provided quite an interesting presentation on splitting up the continental shelf among states. The white spots on this image suggest there is not much Arctic ocean left unclaimed after the various Arctic nations have made their scientific/political claims. Up now, we have a banker talking about the long-term opportunities in the Arctic — standing “at the cross-roads” – increased political tension, climate change, technological shifts, economic challenges — “Mega Trends”, Mr. Harald Serck-Hanssen, Group Executive Vice-President, DNB Bank.
“Pygmies live here” – reading from Latin of an early map 16th century depicting occupants in the Arctic.
Trends: (1) quest for resources – whatever we do, 2 billion more folks in the next 30 years. The country which takes the longest term perspective on securing resources, China, has taken an interest in the Arctic, courting Greenland, Iceland, set up a base at Spitsbergen, and wanting to include themselves in the Arctic Council; (2) Geopolitical rivalry — DNB just divested from the Murmanks region; (3) Technological development and infrastructure – oversight mainly. Drones are good, showing a catamaran style “airship”; (4) Climate change, we expect stricter regulation and “increased reputational risk” of operating in the Arctic.
The Arctic “only holds about 4 million people”. With falling oil prices, I feel there will be less interest in oil and gas development. Actually, we saw a number of mega projects put on the back burner (Shtokman in Russia, Johan Castberg in Norway). So, in short, “yeah”, Arctic has been oversold. Lack of ports, infrastructure, ships, huge environmental concerns, 77 ships across the Arctic and only about 30 (?) this past year. But let us turn to fish farming. Now fishing is booming in the Arctic. Tourism. The Arctic will be exotic and authentic for decades. Hurtigruten, the Norwegian ship cruise has just been purchased by a British concern, suggesting that tourism is entering heady days.
In the short and medium term, the investment opportunities in the High North have been overstated, but the mega trends remain, and will be challenges against the environmental issues moving forward.
“The Richest-Man-In-Norway”, Fred Olsen, asks a question [editor’s note: Berit stated this phrase to me upon seeing Oslen stand, and the same phrase was repeated by Norwegian Institute for International Affairs, specialist in Asian studies [name here], who happens to be sitting at Mr. Olsen’s table.]
Okay, well, we just heard a few comments from Aile Javo, President, Saami Council, who just mentioned on stage that The Economist event title, “Has the Arctic been Oversold” – presumes that the Arctic has been sold to begin with. Also, as one of the indigenous persons living in the Arctic, she begs to differ stating, “The Arctic is our homeland, it is not for sale. You cannot sell something that is not yours”. Ah, a photo of Ms. Javo taken during the coffee break.
In fact, there is some disagreement between Ms. Javo and Ms. Janet King, President, Canadian Northern Economic Development Agency, who feels resource development is really necessary as expressed by local villagers in the Canadian North who seek the kind of changes that such economic investment can bring, and are in fact, disappointed by this new discourse of under developing underdevelopment.
Chiming in is Tom Paddon, Chief Executive Officer, Vaffinland and Chair, Arctic Economic Council, mentioning the importance of recognizing the long term commitment or “reconciliation” for “extrapolating” how economic investment can be commensurable with indigenous interests.
“This is a very up-beat story”, James Astill responds, and turns then to Alexander Shestakov, Director, Global Arctic Programme, WWF, requesting whether he can follow up with a “similar up-beat story.”
Well, in fact, Russia has been in the Eurasian Arctic mingling with indigenous folks for hundreds of years, according to Mr. Shestakov, and that is a major difference with the North American setting, where indigenous folks are mainly taking jobs as “cooks, cleaners, and drivers”, when development comes to town [based on his own observations while traveling in Alaska]. As Mr. Shestakov points out, indigenous participation in development is based on some kind of lopsided “consultation” where 500-page technical reports are expected to be reviewed by northern groups who do not have the skills to comment.
Q: What are the results of sanctions against Russia?
A: Well, international standards on environmental safeguarding, which are more expensive to maintain, and were only followed to lure Western financing, are now absent from development consideration in the Russian Arctic, and along with that, the World Bank investments to create standardization surrounding these developments.
According to Nils Andreassen, Executive Director, Institute of the North (Alaska), the Arctic Council distracts us from domestic policy making.
Ah, now here are three types of visuals from which we are using to get to know the celebrity status of the dignified folks on stage: (1) as a projection on the back screen; (2) as a close-up during the networking coffee break; (3) and, from a distance [in a group] sitting on the stage. Interestingly, an associated of Ms. Javo [name here] later commented to me in person, that Ms. Javo was quite nervous having to sit among the group. When I asked why, the associate mentioned that much of Ms. Javo’s discourse is scripted in advance, and that, expected to be seated in a round chair discussion would require spontaneous responses, something to which she is uncomfortable given that English is not her native language.
Well, in fact, there was no need for her to worry. Ms. Javo presented herself fabulously and I for one, given her fluent command of English, would never have suspected she was nervous given the professional manner in which she mingled.
Up now, we have a “Climate Change Presentation” — titled, “When Climate Change will Force you to Re-Evaluate: A Warning”, by Jason E Box, Professor of Glaciology, Geological Survey of Denmark and Greenland. Dr, Box is presenting quite a few dramatic images. The dramaturgical form can be understood discursively by what Jason calls the “hockey stick” pattern of CO2 levels, that is, chemicals released into the atmosphere in larger and larger quantities, and whose dramatic rise during the industrial period of the last 200 years, unheard of change over the past 2 million years of projection, can be seen in this image of the “hockey stick”.
Doctor Box does have some fabulous abstractions — all referring to such heady issues including Arctic seafloor methane release, heating up of the ocean, falling rates of Greenland ice sheet, rates of black carbon release, persistent circulation anomalies, land and ocean methane release — I could not have imagined! that such complicated topics could provide such interestingly simplified forms of drama.
Here are a few examples of abstraction as a dramaturgical form:
Thank you Dr. Box!
Well, plenty of folks are “disappointed that the oil boom is over”, so says Liv Hovem who is the stand in for Elisabeth Tørstad, Chief Executive Officer, DNV GL & Oil and Gas, who could not make it to the event. During my previous visit, we had CEO of the company, Henrik Madsen. Perhaps both Henrik and Elisabeth Diamond sponsors of the event, were caught up in other pressing matters.
The three shocks [by Jarand Rystad, Managing Partner, Rystad Energy]: (1) Shale oil production would be much higher than expected (the “world” produced more oil); (2) A European collapse in demand (“Europe” did not buy enough stuff); Saudi Arabia did not step in with less production (“Saudi inaction” to collapsing prices of oil).
Arctic has “really big fields” and companies want big fields. Scaling up includes efficiencies.
Okay, well, we are getting close to the end of a long, long day, now talking about mining with a strong list of folks, including the mayor of Longyearbyen (Christin Kristofferson) an advisor of Bellona (Karl Kristensen) and Secretary General of Norwegian Mineral Industry (Elisabeth Gammelsaeter).
Now up, the last speaker: Ping Su, Professor, Political Science of Polar and Oceanic Studies, Tong Ji University.
Here is the list of items that Dr. Su finds important: Political instability, harsh weather conditions, poor infrastructure, fragile ecosystem, impact of world market,.
China’s recognition of Arctic challenges: Government, academic, enterprise.
Epilogue: [stay tuned…]