Natural Resources

Role in energy transition

As a propellant of industry and infrastructure, energy is crucial for human development, human wellbeing, and economic growth. Whether it manifests itself as higher incomes, reduced poverty, increased life-expectancy, or improvements in education, one of the greatest benefits of such economic development is a higher standard of living for ordinary people. Energy is, therefore, critical for improved quality of life and much of the energy used for development is harnessed from natural resources extracted in the Arctic.

While global warming-induced climate change has elicited a sense of urgency to transition away from polluting natural resources such oil and gas, the intermittency of renewable sources and the lack of low-carbon infrastructure makes alternatives energy sources inadequate to power current development needs, which include the need to decarbonise the global economy for the wellbeing of the planet. A successful transition to a green economy must, therefore, be pursued with an understanding of current limitations and a sensible vision on how these limitations can be overcome as conscientiously and sustainably as possible. One solution is, therefore, to understand when it is necessary to continue to rely on fossil fuels to ensure that decarbonisation itself is not put at risk during the energy transition.

Undiscovered reserves

High oil prices affect the realisation of environmental goals by making it harder to power the energy transition, a problem that is only worsened by the current oil shortage. According to experts, at 1,732 billion barrels of oil and 7,257 trillion cubic feet of natural gas at the end of 2020, there are enough accessible oil and natural gas reserves left to fuel economic development for about 50 years at current levels of consumption. Fifty years is not a lot, but the key word here is accessible. In reality, the Earth has huge reserves of oil, gas, and other critical resources that do not yet fit this criterium due to an absence of infrastructure.

Much of these inaccessible reserves are in the Arctic. A 2008 US Geological Survey report estimated that "about 22 percent of the undiscovered, technically recoverable resources in the world" lie above the Arctic Circle in the amount of 90 billion barrels’ worth of oil reserves, 1,670 trillion cubic feet of natural gas reserves, and 44 billion barrels’ worth of natural gas liquids (NGLs). Reserves are largely concentrated in three parts of the Arctic – the Beaufort Sea, the northwest of the Russian Arctic, and the Canadian Arctic Archipelago – but exist across the region. Reserves and production volumes vary considerably by country.

While currently supplying only 10 percent of the world’s oil and 25 percent of the world’s natural gas, the Arctic is, nevertheless, an economically attractive source of future energy resources and is on track to becoming the world’s most important. Nevertheless, all technological and industrial development in the fragile Arctic landscape, including exploration projects, must be pursued with sustainability and environmental protection in mind. Such projects require great investment, cooperation with countries and companies, adaptability, and intelligent energy choices.

Alternative energy
solutions

One viable energy solution for the Arctic involves incorporating hydrogen and nuclear technologies into the clean energy mix. Hydrogen, in particular, combusts without releasing emissions, and is increasingly being recognised as an important tool for decarbonising various industries, from transport to heating.

Hydrogen cannot be produced without palladium, a platinum group metal vital for every aspect of the hydrogen economy, from purification to fuel cell production. Forty percent of the world’s palladium is produced in the Russian Arctic.

Small nuclear reactors (including floating ones), also being a zero emissions energy source, can both supply energy and heating to resource extraction sites in the Arctic and help spur development in remote locations in a sustainable way.

Pathway to sustainability

Practicing strong sustainability in the Arctic means implementing measures to ensure that any future development helps in the fight against climate change instead of facilitating climate change itself. In practice, this means building ports and roads that use clean sources of energy, introducing net zero regulation, remediating environments that have been compromised by past development, and ultimately having sustainable development at the very core of new projects and never putting economic gain above environmental wellbeing.

Strong sustainability requires the mindful engagement of multiple players, from federal and regional governments to scientists to local indigenous populations to businesses, each of whom brings a singular perspective and a unique set of tools to the table. The most successful pathway toward strong sustainability is collaborative.