The Arctic region has long been admired globally as an example of good governance, one characterised by peaceful cooperation and engagement. The is partly because the region has not been a potential geopolitical flashpoint for any armed conflict since the Cold War. But in recent years, this dynamic has changed. The dramatic effects of climate change have been most noticeable in the Arctic. The melting of the ice caps has opened new commercial opportunities in transport and energy, making the region of interest for the largest economies in the world who are now asserting themselves firmly in the region. These manoeuvres are likely to have global geopolitical ramifications.
The Arctic is home to some 22% of the world's natural undiscovered oil and gas reserves, and the thawing process has also opened the region up to transportation, paving the way for energy exploitation and transportation. This has coincided with a key period in the depletion of conventional fossil reserves elsewhere, particularly for Arctic nations. For the USA, conventional fossils are expected to run out in the upcoming decades, whilst Norwegian and the British reserves are expected run out in less than a decade. According to some estimates, Russia's energy reserves are expected to begin running out by 2030 . For these nations the Arctic has emerged as a crucial strategic asset for energy security and economic growth. These accelerating changes are reshaping the geopolitics of the region, Russia, Denmark, Norway, Canada and the US, have made territorial claims in the region; crucially, these claims are less about territory and more about energy riches.
Moreover, Arctic sea routes are another huge asset to Arctic nations. Journey times via the Northern Sea Route between the Pacific and Europe are a third shorter. Providing the world's largest shipping fleets reduced journey times would have major consequences for global trade, 90% of which is transported through maritime routes. Russia has been at the forefront of advancing its Arctic interests; it was amongst the first to submit territorial claims to the UN, and is actively pursuing the potential of the Northern Sea Routes. For Russia, maintaining its global dominance in the energy world is fundamental to its geopolitical standing and enhanced energy transportation offers it the added potential to rival the Suez Canal in connecting the two most dominant shipping blocks in the world; Europe and the Pacific.
As these changes in the Arctic become more noticeable, the prospect of a geopolitical stand-off becomes greater. What's more, the crisis in Ukraine has become a catalyst for a potential confrontation in the high seas between the Arctic states; something that would have devastating global ripple effects. The Ukraine crisis has already led to a sharp increase in the militarisation of the Arctic region, with Russia declaring large swathes of Arctic waters as a military priority zone and conducting regular military drills in the a region long been coveted by the US, Canada, Norway and Denmark.
Behind this geopolitical posturing lies the simple reality of the pull of the Arctic's hydrocarbon resources. The recent drop in oil prices should not be seen as a permanent feature affecting the Arctic. Arctic energy has far more to do with the future of global energy resources and less to do with current energy markets. Indeed the biggest claimant of these resources will go on to shape the energy balance of the world as we enter a phase of accelerating depletion from existing resources. So far, it seems that the largest share of natural gas geographically lies in Russia's favour, with the lions share of oil geographically in America's favour.
But as militarisation soars, and territorial disputes continue to go unresolved, the chances of disputes escalating into confrontation should not be underestimated. Whilst the Arctic council is seen as a reliable arbitrary organisation and much of the high Arctic seas are governed according to the UN Convention on the Laws of the Seas, the region has not yet been tested in on a scale that is not entirely infeasible given present and upcoming developments. This is complicated by the United States not being party to the UN Convention on the Laws of the Seas, raising the risk of confrontation as other nations refer directly to the UN convention to submit territorial claims with varying levels of success.
With the United States assuming chairmanship of the Arctic council, the Arctic region could enter a phase of tense and fragile international cooperation. The backdrop of the Ukraine crisis and swift changes in the Arctic region are expected to weigh down heavily on America's chairmanship. It is critical the Arctic council - a relatively successful institution for resolving international conflicts, remains free of international sabre-rattling so that a collective approach can be adopted to solve some of the complicated problems of territorial divisions and energy resources peacefully. The backdrop of Ukraine must not poison the positive spirit of the Arctic council.