Arctic Ice Cap
(13 years, 11 months ago)
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Lord Jay of Ewelme
To ask Her Majesty’s Government what assessment they have made of the economic and security implications of the melting of the Arctic ice cap.
Lord Jay of Ewelme
My Lords, my interest in the Arctic stems from my interest in climate change. It seems to me to be entirely appropriate that we should be discussing this aspect of climate change, the Arctic, when climate change negotiations are taking place in Cancun. I very much hope, though not with every expectation, that the negotiations in Cancun have a greater chance of success than those that took place in Copenhagen a year ago. By focusing on the Arctic, I do not do so at the expense of the focus that needs to be continued on those who suffer most from climate change, particularly in the poorest countries of the world.
The issue this evening is not whether climate change is happening or who or what caused it. The issue is that change, dramatic change, is occurring in the Arctic with potentially profound implications, including for British interests. The question is whether we are doing enough now to protect and promote our interests in the future. The subject might be less immediate than many discussed in your Lordships’ House, but other nations are reacting to the changes they see or foresee. Our interests are affected too and my concern is that, if we do not take them seriously now, we may well regret that later.
The Arctic is the fastest warming region on Earth. By 2007, it had lost half the ice that existed in 1950—over one million square miles of ice, roughly equivalent to one quarter of the United States. The result is that the Arctic is becoming more accessible. In 2007 and 2008, the north-west passage was opened for two weeks. In August last year, two German commercial ships, unaccompanied by icebreakers, traversed the North Sea route from Vladivostok to the Netherlands. These routes are substantially shorter than the traditional sea routes from east to west and vice versa. They are, of course, only navigable for short periods and there is always the risk of ice and of atrocious weather in hostile, not-well-charted waters. My father was captain of a naval escort ship which escorted Arctic convoys during the Second World War and his description of conditions in the Arctic were not for the faint-hearted.
These seas, the Arctic Ocean, are not going to become the new great sea route for the world in the next decade, but, in 20 years or so—by which time scientists expect ice-free summers—they might. When they do—and I believe that it is a “when” and not an “if”—will there not be opportunities for maritime nations such as ours? Might there not be scope for developing again some of the great ports of northern England, Scotland and Northern Ireland to service the new shipping lanes? Are there not huge opportunities, too, for our insurance companies and our insurance markets? I hope that the Minister will comment on that.
Meanwhile, there is already great interest in the prospect of mineral extraction from the Arctic. Here too, there are risks and opportunities. The risks, of course, are the environmental catastrophes that can follow mineral and especially oil extraction, as we have seen already in Alaska and, more recently, in the Gulf of Mexico. There is at present uncertainty over the likely timescale for exploiting the Arctic; much will depend, as always, on demand, on price and on technology. However, present estimates—and they can only be estimates—are that 13 per cent of so-far-undiscovered supplies of oil in the world, 30 per cent of natural gas and 20 per cent of natural liquid gas, could lie in the Arctic. The Arctic already currently produces about 10 per cent of the world’s oil and 25 per cent of its gas, and those figures seem bound to increase. Here again, the opportunities for Britain companies that are used to operating in some of the world’s most inhospitable zones are great, so what is being done now to maximise their chances of success? What scope will there be for fisheries in our increasingly ice-free Arctic? My understanding is that Iceland, Norway and Russia are already interested in investing in large fishing fleets with an eye to Arctic bounty. What is Britain doing? Is there scope for replacing some of the declining traditional fisheries with fisheries in the Arctic? Will we allow others to gain the advantage here, or will we take it ourselves?
There is significant change under way in the Arctic, with important implications for Britain. It is therefore equally important that we should remain fully involved in international negotiations and discussions about the future of the region. There are many British academic and non-governmental organisations with great experience and expertise and with much to offer others. The British Antarctic Survey, which has an important Arctic dimension and a deservedly high reputation, is one, but intergovernmental co-operation is crucial. The key forum is the Arctic Council, consisting of the Arctic states: Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States. The UK is an observer and, indeed, an active observer, and rightly so, but there is a move among Arctic states members to limit the role of observer states, including the United Kingdom. Can the Minister give an assurance that we will continue to be closely involved in the work of the Arctic Council, given its importance and our experience and interests in the region?
However, the Arctic Council covers only some Arctic issues, essentially protecting the environment, which is, of course, crucial. Other international organisations have a key role too, for example, the International Maritime Organization, for shipping issues, or the UN law of the sea conference, but other issues, including, crucially, security, are less obviously covered by existing institutions. Sovereignty is not always clear. We all remember, I suspect, the Russian flag planted on the Arctic sea bed a couple of years ago to stake a sovereignty claim. How are territorial disputes linking, for example, to oil fields, to be resolved as the Arctic becomes more widely navigable and exploited?
I do not know how often Arctic affairs have been discussed in your Lordships’ House, but I would guess that they will be discussed pretty regularly in the future, as the significance of the melting of the ice cap becomes more apparent, and with it the important implications for British interests. I look forward to Minister's response.
Lord Jenkin of Roding
My Lords, we are deeply indebted to the noble Lord, Lord Jay. I am sure that he is right in saying that this is just the first of the debates we shall have on the Arctic. He mentioned the pace of the melting of the ice. This is nothing new. When Nansen’s “Fram” drifted across the Arctic Ocean, it took three years to get from the Bering Strait to clear water off Greenland. When the French boat “Tara” did it in 2006, it took just two years. Indeed, the Arctic flow is twice as strong as it was 100 years ago, and that is a pretty dramatic change. In 2007, the summer ice shrank to half the level that it was in the 1950s and 1960s, as the noble Lord said. I would like to draw to the attention of the House another phenomenon, which scientists call the Albedo effect. The sunlight shining down on ice or snow is almost all reflected and only about 15 per cent goes to warm the seas underneath. If there is clear water, 95 per cent of the sunlight warms the water. Therefore, as the amount of clear water in the summer increases, so the Albedo effect has an accelerating impact on the melting of the ice. This is the reason why the Arctic is growing warmer faster than anywhere else in the world.
The noble Lord raised a number of questions, but there is no doubt about it: this has greatly encouraged the huge search for minerals. There is a difference. Off Alaska, the American environmentalist movement has now made it extremely difficult for international oil companies to prospect for oil with any prospect of being allowed to do so. Shell, one of the big companies there—a British company— is at the moment marking time on this. If one looks across to Siberia, however, the Russian experience is very different. There are, as I have heard described, staggering quantities of gas as well as oil. During the Soviet era, there were enormous and immensely damaging changes to the environment. That is now being corrected by the new Russian administration. The Russians have at least three very major projects offshore of the Siberian coast. Much the biggest is the Shtokman gas field, which is—noble Lords may be surprised to learn— the second largest gas field in the world, though in immensely challenging, hugely deep water.
The noble Lord referred to the ice cap; but of course, there is no land under the North Pole—it is all ice. It is immensely deep water, sometimes four or five miles deep. There are huge icebergs, but in Alun Anderson’s book After the Ice, which first attracted me to this—and I really recommend anybody who is interested in this subject to read it; it is a fascinating compendium of facts, history and forecasts—the author described the Shtokman field as,
“the hottest groundbreaking project in the entire Arctic, and Russia is driving it forward”.
That is something of which we really need to take account. If one looks at the deeper water further north, it is even more difficult. The combination of accelerating warming and this advancing technology poses, as the noble Lord has said, huge challenges for us all, and I, too, look forward to my noble friend’s reply from the Front Bench as to what we are doing about it.
Lord Teverson
My Lords, I am absolutely sure that the noble Lord, Lord Jay, is right that we will be discussing this topic on many occasions in future. I find it one of the most interesting topics because views on the Arctic are some of the most diverse that there are. If one reads the press cuttings and look at the news, whether it is the two Mir exploratory submarines of the Russian Federation or whatever, the Arctic is going to be, or already is, the second Cold War, with all the military threats that there are, including the resource wars—all of that is a real threat to global security. On the other side, I was at a meeting not that long ago of heads of parliamentary foreign affairs committees in Prague. I was speaking to my Danish colleague—Denmark being, because of Greenland, one of the Arctic Council nations—and I mentioned all these issues about the north-west passage, international waters and resources, and she looked at me completely calmly and said, “No, the Arctic Council has all of these under control. We are discussing them all and we are doing that within international law and everything will be resolved. Robin, don’t worry about it. Worry about everything else, but that one, as Arctic nations, we’ve got sorted”. That is a paraphrase.
The Arctic is of great interest to us. First, the Arctic is the leading indicator of global warming. As the noble Lord, Lord Jenkin, said, an important factor is the reflective effect of the polar ice cap, which will lead to the increase in methane in that area that we already see elsewhere in our planet’s atmosphere. We have international shipping; we have the strong Canadian view that not all of these waters are international waters, and that it has national control over many of these areas, and so there is potentially a dispute with the United States, among others, and those other nations that might want to use them. There are commodities there, including 100 billion tonnes of hydrocarbons—25 per cent of global reserves. All of that is there to be fought over; I refer to territorial claims and the 1,200 mile-long Lomonosov Ridge—and I am not sure whether I have got that pronunciation exactly right— Ridge that extends across much of that area.
From my humble position, I see that there are things that need to be done, and I would be interested in the Minister’s reply. First, in terms of world security, global warming is the one thing that needs to be sorted out in this area, but that is not just an Arctic issue. In terms of territorial disputes, it is most important that we persuade and cajole the United States to finally become a signatory to the United Nations Convention on the Law of the Sea, through which these disputes and boundaries can be resolved amicably.
As regards drilling and the way in which these resources will inevitably be exploited, this year, the Gulf of Mexico has shown that we need very stringent terms and conditions in terms of the way in which those minerals are exploited and in terms of the emergency facilities when that does not work. As to international seaways, we need to look to Canada to talk very closely and carefully with the international community to resolve international waters conversations and disputes in a way that everyone is able to respect. We also need to increase hugely our communications ability in respect of emergencies and the seaway. But, most of all, I ask that we encourage—the EU and the United Kingdom should participate in the Arctic Council—the use of these methods to come to a peaceful, long-lasting and legal framework for resolution of these issues.
Viscount Waverley
My Lords, the Arctic has a magical attraction posing special physical challenges—remoteness, ice and extreme temperatures, with long periods of darkness. But as the region warms in the decades to come, the ice cap will gradually melt and its ecosystems change. Technology will improve and commercial opportunities will present shorter shipping routes, fishing grounds, new destinations for commercial tourism, and new oil and gas development opportunities. The United States Geological Survey 2008, for example, has estimated the potential magnitude of the resources in the Arctic as containing, as we have already heard, 90 billion barrels of oil, 1,700 TCF of gas and 44 billion barrels of natural gas liquids, all equating to some 10 years of current global oil and gas demand.
A framework for the staged implementation of performance-based standards is required therefore to govern Arctic offshore oil and gas exploration, development, production and transportation, which must take into consideration the special challenges of the Arctic environment, and so enable compliance integrated with regulatory arrangements. Therefore, co-operation between industry, regulators and other stakeholders is a fundamental.
The central question that comes to my mind is, “How is a global treasure to be developed in a manner which provides, yet preserves?”. International and national interest in mitigating and adapting to future changes to make responsible development happen has led to calls from Arctic and non-Arctic nations to anticipate and assess the new levels of activity to the region. Effective governance through Arctic-specific international standards, and adapted national regulations and standards, is critical in managing and mitigating risks and securing safe, reliable and environmentally responsible development. Many commentators choose to view the changes in the Arctic in terms of security; namely, energy security, environmental security and human security.
If the Arctic is to be developed, and there is no possibility of this not happening, it is essential that international co-operation on science, planning, inclusive engagement, standards of operation and safety is ensured. Have we got to the stage that world players, Governments and private sector alike have the experience and technology to develop in a manner that causes no future long-term regret? Have we learnt from the Gulf of Mexico oil spill, including what went wrong and what will be done to prevent a similar occurrence? A constant concern is whether sufficient emphasis will be placed on addressing the wishes and needs of the Arctic’s 4 million inhabitants. The Arctic is not about taking short-cuts and the residents of the region should be brought on board at an early stage of planning.
In 2009, the Aspen Commission on Arctic Climate Change of the Aspen Institute identified initial principles of Arctic governance as forming the foundation and the standards by which future governance and sustainable management of human activities in the Arctic marine environment should be measured. Building on those principles, the Aspen commission is in the throes of publishing its final report, which is expected to report its recommendations in January 2011.
I expect a number of points to emerge, the most important of which is to ensure the strengthening of the Arctic Council to allow it to follow through on all recommendations, including those of the Aspen Institute. Other points I expect include, first, that marine spatial planning should be the innovative tool to implement and measure success over time of ecosystem-based management across sectors and large marine ecosystems. It should be noted, however, that the starting point of such a process should be the formulation of clear development objectives. Secondly, a new Arctic marine conservation sustainable development plan should be called for and should recognise that the region’s challenges are not limited to national concerns. Launching such an effort would require high-level ministerial engagement, if not that of the heads of state of Arctic Governments. And thirdly, an Arctic science programme should be implemented and integrated as part of an Arctic marine conservation sustainable development plan, using an open-source information network. The Arctic high seas, for example, should be designated as a science reserve to signal a new level and scope of international co-operation and collaboration. A specific plan should be developed to gather the scientific information urgently needed to make informed decisions about the region’s future.
A real opportunity exists for a new era of international co-operation in the Arctic, allowing for objective and balanced debate to defuse and pave the way for the development of this global treasure. The noble Lord, Lord Jay, has played his part by raising the critical need for debate at this early stage. He should be thanked.
Lord Rotherwick
My Lords, the principal driver of the temperature of the earth is the sun and fluctuations have occurred for as long as measurements have been recorded. The Arctic is among the most sensitive to temperature fluctuations and consequent changes in the ice cap. Notwithstanding the downsides of the melting of the ice cap, one of the upsides, as mentioned by the noble Lord, Lord Jay, is the increased accessibility of the north-west passage. This opens up considerable economic and environmental benefits, providing scope to obviate existing security threats in the Gulf of Aden and introducing alternative routes to the Suez and Panama canals.
Nor should we ignore Greenland, an autonomous country within the kingdom of Denmark, located within the Arctic Circle. It is the world’s largest island and owes its name to the agricultural opportunities that settlers were keen to exploit—a green land that as a private pilot I have landed on a number of times. Populated for around 5,000 years, the Norse Vikings established farmland settlements around the year 1000 AD, something which would have been impossible in 1900. However, even at the time of the Vikings’ presence on the island, almost the entirety of the land mass would have been covered by at least a 1 kilometre sheet of ice, yet the climate along the coast was conducive to supporting an agricultural community, attractive in its similarity to the lifestyle of the Scandinavian farmer of that period, based on arable and livestock farming.
Approximately 85 per cent of the island is covered by ice and Greenland benefits, as we have heard, from valuable fish stocks, an issue which ended its brief membership of the European Community in the 1980s. Its natural resources include coal, iron ore, lead, zinc, molybdenum, diamonds, gold, platinum, niobium, tantalite, uranium, fish, seals, whales and hydropower—quite a lot. Additionally, there are significant potential oil and gas fields, especially in the northern and north-eastern parts of the island. The current economy remains critically dependent on increased catches and exports of shrimp, Greenland halibut and, most recently, crabs. These represent around 82 per cent of the country’s total exports.
Opportunities for fishing in Greenland may be widened further but the scope to broaden its economic position in respect of other natural resources should not be discounted. For example, the increased interest in hydrocarbon exploration off Greenland’s western coast represents a significant opportunity to deliver both economic and environmental benefits. The potential abundance of hydropower generation could also become a considerable source of power. Similarly, there has been an increase in tourism in Greenland. Cruise liners now operate in the western and southern waters during the peak summer tourist seasons. Although debates on topics of this kind tend to be characterised by the threat of impending doom, we should not forget that opportunities will emerge. We should be alert to them and include them in our considerations.
Lord Alderdice
My Lords, the noble Lord, Lord Jay, to whom we are indebted for achieving this debate, started his speech by asking whether your Lordships’ House had paid much attention to the Arctic in the past. Perhaps one of the notable references was that of Lord Dufferin, who, as a young man in his 20s, took a wooden sailing boat and sailed the whole way to Spitsbergen. This was before he went on to be ambassador at St Petersburg and Paris, Viceroy of India and Governor General of Canada, where he is still favourably remembered.
In those days, the voyage was not much followed up because although Lord Dufferin wrote letters to his wife which were published in Letters From High Latitudes, it was a cold and difficult place. There were much better places to go for resources, such as in the scramble for Africa, the struggle over South America and North America and of course in the Far East. Indeed, every century seems to have seen a scramble or race for somewhere. In the latter part of the past century, it was probably the struggle for space.
One characteristic of every one of those struggles was not just that it opened up new lands in order that there would be more resources available, but that it ended up with military struggle—the struggle for power and control. While we think of the situation in the Arctic and the melting of the waters in environmental terms—I understand that today it is expected in Ottawa that the Minister may well declare a scientific park just off the north of Baffin Island—and although there has been much said about the economic consequences, we must think about the security consequences. Those are the questions that I would like to add to those that have already been raised by other noble Lords when my noble friend comes to reply.
My old friend Bill Graham, when he was defence Minister in Canada, remarked on the fact that the melting of the Arctic ice opened up great opportunities but also real threats. Canada has sent military equipment and men into the region in order to identify its own interests and show that it has the capacity to defend them should the time come. In 2009, the president of the United States in a presidential directive indicated potential security concerns in the region, and Russia has for quite a substantial time had a major military presence on the surface and more particularly under the surface in the region.
We have always to some extent—although this was not entirely true during the Second World War when a threat did indeed emerge from the north—felt that there was some degree of protection. That is not the same if it is possible to traverse the areas easily. Not least at a time when austerity has forced us to cut back on our military naval fleet, it is important that part of our strategic defence thinking over the next number of years should include not just the opportunities, which are marvellous and the requirement to protect our world, but the potential threats to our own security and that of the European Union.
This is not solely a matter for ourselves of course. It is clearly a northward shift of emphasis for NATO. If one looks at the map not from a normal perspective of Britain being right at the centre but looks down at the world from an Arctic projection, one sees a northern equivalent of the Pacific rim, where there is a major confrontation between Russia, which has half of all the coastline, Canada and the United States and, as has been mentioned, Denmark in the form of Greenland, as well as Norway. I am keen to hear from my noble friend what our security advisers are telling us about the need to protect ourselves and our national interests, and what is being discussed at NATO in this regard where there is a much greater and more obvious responsibility.
Lord Greenway
My Lords, I agree very much with the noble Lord, Lord Jay, when he says that he does not think we will see a great new northern sea route coming into play within the next 10 years. I suggest it will be quite a few years beyond that. Most of the voyages that have been made round the north-east passage rather than the north-west passage, which is over the top of Russia, have been experimental. We can go back to 1997 when a Finnish tanker made the voyage. More recently, as the noble Lord said, two German freighters made the voyage but not, as he said, from Vladivostok to Holland; in fact, they came from South Korea and went over the top to Rotterdam. They stopped off on the way at Novyy in Yamburg province which meant they had icebreaker escort and had to take Russian ice pilots.
This year, a Danish bulk carrier “Nordic Barents” carried 41,000 tonnes of iron ore from Kirkenes on the Norwegian-Russian border to Qingdao in China. The Russian shipping company Sovcomflot sent a relatively large tanker—117,000 tonnes deadweight—the “SCF Baltica”, loaded with 70,000 tonnes of gas condensate from Vitino and Murmansk to Ningbo in China in 22 days. She was also escorted by three icebreakers.
Sovcomflot is preparing to send an even bigger tanker—162,000 tonnes—on a trial voyage next year. However, here we come up against draft restrictions. At the moment the Sankov and Sannikar Straits are restricted to 12.5 metres and 13 metres respectively and larger ships, drawing more than 15 metres, will be forced to go further offshore into higher latitudes, where the risk from floating icebergs is greater.
Companies which have sent ships around the north have said that they are very satisfied—it cuts 4,000 miles off the voyage, it saves them paying Suez Canal dues and saves the piracy problems. If a much larger amount of shipping was to go round the north of Russia, and if one was to believe from WikiLeaks’ revelations that Russia is a mafia state, I can see various Russians becoming very interested in what was going around their shores and there is nobody there to help ships, unlike going through the Gulf of Aden.
One possible drawback to the northern sea route is attracting the attention from the green and climate change lobbies. One report suggests that the release of CO2 and engine particles—that is, black carbon or soot as we know it—from diesel engines in a sensitive area as regards climate change could lead to an increase in global warming.
Other reports suggest that up to 2 per cent of global shipping traffic could be using northern sea routes by 2030, rising to 5 per cent by 2050. To put that in context, today 4 per cent of world shipping uses the Suez Canal—that is an enormous amount of shipping. To be quite honest, I cannot see it happening for a very long time.
The other thing to take into account, which has not been mentioned, is that at the moment, with global warming, we have a two-month window in effect for shipping but the winter is still frozen over. Shipping is not going to suddenly take to using these Arctic routes. I think the likelihood is that it will be reserved for bulk cargoes, both wet and dry, mainly exports from Russia. The main container trades, I would suggest, are very unlikely to start using these northern routes. I want to give an example of the mileages—Hamburg to Yokohama going by the northern sea route saves about 4,000 miles; to Hong Kong you save about 1,000 miles and to Singapore the distances are exactly the same.
Container shipping is a very complex web these days and ships pick up cargo all over the place. Let’s face it—they are not going to get any cargo in northern Russia, so I think they are going to stick to their proven routes for some time to come.
Lord Brett
My Lords, when I left home this morning, I trudged through the snow to the car. My wife, who was kindly driving me to the station, asked what we were discussing this evening. I said the melting of the Arctic ice cap. She pointed out that the temperature was minus 11 degrees. I was going to offer some scepticism, but I decided that as I needed the lift I would not seek to educate her on the issue at that time. But she will be educated, I am sure, if I can persuade her to read Hansard and the excellent debate we have had. I am very grateful, as others are, to the noble Lord, Lord Jay, for setting it out so clearly. I would like to begin by looking at the point made by the noble Lord, Lord Alderdice, of security. There are a couple of very interesting RUSI documents: one by Clive Murgatroyd published last year called Defence and the Arctic—Go with the Floe?; and another by Paul Berkman. They raised the question whether there is any choice other than having a zone of peace or an enhanced military presence, with all the danger that that brings. I would be interested to hear what the Minister has to say about that.
A number of noble Lords have set out the opportunities provided by the melting of the Arctic ice cap and have rightly described some of the repercussions. Sometimes our media and our own enthusiasm will not give true weight to some of those issues. I have rarely seen the albedo effect, mentioned by the noble Lord, Lord Jenkin of Roding, argued other than in the most scientific and technical journals.
Access to oil and gas will be an issue, not only because of the unpredictable seas but because of the thawing permafrost. There is also the very real question of oil spills, which could be a major problem under ice, because it could spill for many hundreds of thousands of miles. That points, as all these questions do, to international co-operation, licensing and safety regimes. Then there are the fisheries. It is perhaps not so much a question of the ice cap melting that is the issue with fisheries, but as a result of that fish stocks will migrate to other areas. Sustainable fisheries management is the key. Again, that talks of the need for international co-operation, if we are not to see some of the problems that we have seen in the past decade or two repeat themselves.
We have the question of commercial shipping. Yes, there are insurance opportunities, but someone’s opportunity for enhanced insurance premiums is someone else’s penalty in having to pay them. More importantly, whatever shipping is used in those new routes, emergency cover is probably more difficult to provide than where we are at the moment. I join with others in asking what action the Government have in mind to meet these challenges in the IMO, with NATO, the EU and other international forums, by way of enhanced regulatory frameworks and increased collaboration. Specifically, what are the prospects of the United States signing up to the UN law of the sea convention? We have heard words from Washington to suggest that that is an intention, but is it a realistic intention, particularly in the light of shifts of power within Congress?
I finish with an important point from a domestic point of view—the impact of rising seas on the coastlines of Britain. We have seen various estimates of how the seas could rise as a result of melting ice caps, including one of 2 metres by the end of this century, which has been pooh-poohed or debunked, not least by the Met Office and others. But there will certainly be substantial increases. The last Administration made urgent legislation to protect homes and businesses, and the Environment Agency says that more than 5 million properties are at risk in England and Wales. We have yet to hear from the Government what flood defence schemes will be abandoned in the new austerity era and what will go ahead. Will the Minister share his thinking with us—and, if that is not possible in his oral response, can I have a response to that in writing?
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, this has been a short but expert debate, with a lot of extremely well informed contributions to what is a fascinating and probably rather undiscussed phenomenon of our times. It is a very fast-developing situation, as the noble Lord, Lord Jenkin, pointed out, with rapidly melting ice packs and ice floes in the Arctic region. The House is grateful to the noble Lord, Lord Jay, for letting us focus briefly on this; it may be the sort of issue that we will come back to in much greater detail in future.
The phenomenon is all the more striking because of the possibilities that it raises. Greenland is becoming greener, or so we are told. Indeed, there is evidence of areas becoming habitable again in Greenland, which have not been available for five or six centuries. There is a certain irony in the whole situation that, as the ice melts, the hydrocarbons are becoming more accessible. While we want to combat global warming, which is widely believed to be closely associated with excess use of fossil fuels, we have a situation which is making access to fossil fuels all the easier, although perhaps easier is too strong a word. It is certainly less difficult and more possible than it has been in history.
There is the hydrocarbon situation and the fascinating prospect of opening the north-west passage, which my noble friend Lord Rotherwick referred to, and the possibility of solar routes. I want to come to both of those in a moment, but let me begin by answering the central question: what are our key aims in the Arctic and what are we in the UK doing to meet these challenges? Let me sum up the answers to those questions briefly before coming to more detail about hydrocarbons and many other aspects of the Arctic phenomenon.
Our aims are to promote peace and good governance in the region, increase UK influence by maintaining good bilateral and multilateral relationships with the Arctic states, and to support the work of the Arctic Council and other international and regional bodies. The noble Lord, Lord Jay, asked about our status in relation to the Arctic Council We are an observer and we have presented a very strong case for our continued observer status. Frankly, we would like to see this whole issue raised by the Arctic powers of who should be observers and how that should work in the future. We want that to be as settled as possible and believe that we can make a powerful contribution to the continued work of the Arctic Council.
Our second aim is to protect crucial UK energy supplies from the region and promote UK business interests. Thirdly, we want to ensure access to fisheries and transport routes in the region, including the ones that may open up in the future—not just in summer but in winter. Fourthly, we want to promote wider UK Government objectives with regard to sustainable development, environmental protection and climate change.
Let me move from the general to the particular. I have noted already the irony that the melting of the ice means that all sorts of possibilities open up for access to the huge hydrocarbon resources in the region. We need to remember that this is not virgin territory. We have the Stockman field, to which my noble friend referred, Snohvit, the Norwegian development, Prudhoe Bay and the vast Alaska resources operated by BP, so oil and gas—particularly gas—is being extracted from the area in substantial quantities already. They are small compared with what is estimated to lie in the region, and all kinds of vast figures are thrown around. The US authorities estimated some years ago that 30 per cent of the world’s gas reserves and 13 per cent of the world’s oil reserves lay under the Arctic ice, or in the Arctic region. One has to be careful with these figures because they are assessments of what has not been discovered, so they have a guessing element to them. But there is no doubt that colossal reserves are there and the question arises as to how they can be got out economically and in line with all the other restraints that the world wants, including respect for the environment.
There are then the shipping aspects, which are potentially very interesting, to which my noble friend Lord Rotherwick referred. In a way, although one may be eliding the timescales a little, many would say that today travelling through the Gulf of Aden has become considerably more hazardous with the unfortunate growing piracy elements. Insurance premiums have gone up enormously for taking the traditional routes between the West and the East, and the north-west passage is many thousands of kilometres—and miles—shorter. If the passage became available in the summer, and at least parts of the winter, the gain would be enormous and of great interest to the great shipping and transport companies of the world. Those are the possibilities. They are undoubtedly exciting and real because the melting is taking place. Scientists argue about the precise nature and speed of the causes and whether we are talking about a cyclical, historical or permanent trend. That is a debate that we do not want to enter into this evening. However, the melting is a fact.
Against that, it has to be accepted that extracting oil and gas in the area could lead to oil spills and environmental hazards. The conditions are very difficult and, even with the melting of the ice, we are dealing with appallingly cold conditions. Deep-sea drilling, as we know from the tragedies in the Gulf of Mexico, is full of hazards. The world is watching closely to see that these things are controlled very carefully. The noble Viscount, Lord Waverley, was concerned about the guidelines for the extraction of hydrocarbons. We fully support the Arctic Council guidelines. They must be adhered to rigidly.
Secondly, there is the question of straightforward economics. At what price a barrel of crude does it begin to look realistic to develop the technologies to extract from under the ice and to develop the kind of offshore sub-sea stations that can draw oil and gas horizontally on to land-based refining and receiving stations? The costs are very high. All sorts of estimates fly around. There is no doubt that if the price of crude was as low as it dipped two years ago—or as low as it dipped back in the 1980s—the attractions of any kind of extraction in this area would be very small. There are major environmental issues and major fisheries interests to be safeguarded. There are the interests of the indigenous peoples to be looked after.
Against that, the politics of the whole region has begun to be not as dismaying and deterring as perhaps it seemed in the past. The littoral five—Russia, Norway, Denmark, Canada and the USA—and the other three members of the Arctic Council—Iceland, Finland and Sweden—are now co-operating more closely than they have in the past. The long debate between Russia and Norway about demarcation lines looks like being settled. It is yet to be completely signed but the spirit is one of co-operation and is constructive. The noble Lord, Lord Teverson, brought us a hint of the good news from his interlocutor. The major political problems and quarrels that might have tarnished the whole scene as it unfolds look like they are being tempered by a degree of co-operation, which is very good news.
The noble Lord, Lord Alderdice, asked about security. There are concerns that various countries have sent patrol vessels to the area. Everyone became very excited when the Russian authorities decided to place a sub-sea titanium flag on the North Pole. Again, one hopes that the spirit of co-operation that is evident in the Arctic Council will prevail.
That is the scene. We are involved with it and watch it very closely. The possibilities are undeniable and there are also dangers. I hope that noble Lords will feel that Her Majesty’s Government are alert to this new development. We are not closing our eyes to something of great importance. We are not an Arctic power but we tend to be close to it. The possible implications for our coastline, if the climate developments continue in the way some fear, and certainly for our energy security, are real.
I hope that this debate has helped the noble Lord, Lord Brett, warm up a little from his cold start this morning. I have not answered in detail about the flooding matters., but I will write to him about them. They are part of a more general concern that we all have about flood protection. I thank the noble Lord, Lord Jay, very warmly for initiating such a fascinating, interesting and important debate.