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Gold9472
03-25-2007, 05:56 PM
Race for island riches heats up

http://calsun.canoe.ca/News/World/2007/03/25/3828516-sun.html

By AP
UPDATED: 2007-03-25 02:40:45 MST

HAMMERFEST, Norway -- Barren and uninhabited, Hans Island is very hard to find on a map.

Yet these days the Frisbee-shaped rock in the Arctic is much in demand -- so much so that Canada and Denmark have both staked their claim to it with flags and warships.

The reason: An international race for oil, fish, diamonds and shipping routes, accelerated by the impact of global warming on Earth's frozen north.

The latest report by the UN Intergovernmental Panel on Climate Change says the ice cap is warming faster than the rest of the planet and ice is receding, partly due to greenhouse gases.

It's a catastrophic scenario for the Arctic ecosystem, for polar bears and other wildlife, and for Inuit populations whose ancient cultures depend on frozen waters.

But some see a lucrative silver lining of riches waiting to be snatched from the deep, and the prospect of time-saving sea lanes that could transform the shipping industry the way the Suez Canal did in the 19th century.

The U.S. Geological Survey estimates the Arctic has as much as 25% of the world's undiscovered oil and gas. Russia reportedly sees the potential of minerals in its slice of the Arctic sector approaching US$2 trillion.

All this has pushed governments and businesses into a scramble for sovereignty over this suddenly priceless sea.

Regardless of climate change, oil and gas exploration in the Arctic is moving full speed ahead. State-controlled Norwegian oil company Statoil ASA plans to start tapping gas from its offshore Snoehvit field in December, the first in the Barents Sea.

Alan Murray, an analyst with the consulting firm Wood Mackenzie, said most petroleum companies are now focusing research and exploration on the far north.

Russia is developing the vast Shkotman natural gas field off its Arctic coast, and Norwegians hope their advanced technology will find a place there.

"Oil will bring a big geopolitical focus. It is a driving force in the Arctic," said Arvid Jensen, a consultant in Hammerfest who advises companies that hope to hitch their economic wagons to the northern rush.