Arctic Economics

Does Iceland Have Offshore Oil and Gas?

Iceland plans to offer 100 offshore oil and gas exploration leases for bid this January.  Northern Crude has pulled together background materials on this and on Iceland's proposed new tax regime for oil and gas: Icelandic Oil.

Anders Åslund's ten reasons for thinking the Russian economy will falter

Åslund, of the Peterson Institute, in today's Moscow Times: 10 Reasons Why the Economy Will Falter:

The high cost of northern living

Kennie, a blogger (Tales from the Arctic) and a teacher in Arctic Bay on Baffin Island, went through the grocery store and photographed product prices to prove something to her incredulous friends down south: Believe me now?  $37.89 for six cans of Minute Maid juice?

The post provides 19 more price exhibits.

The economists at the University of Alaska Anchorage's (UAA) Institute for Social and Economic Research have recently looked at the high prices for fuel in remote Alaskan communities: Dollars of Difference: What Affects Fuel Prices Around Alaska?  

The study by the UAA economists suggests several reasons for high fuel costs (and I assume much of this applies to other goods):

• transportation costs - there are no roads, in some places fuel even has to be brought in by air;
• these remote and rural communities are often very small limiting potential for economies of scale;
• the communities are served by small numbers of transportation, wholesale and retail firms, so there might be some exercise of market power;
• rural transportation or storage infrastructure may be limited or in poor condition;
• the need to load and unload items several times as they move through the limited transportation infrastructure and between transport modes;
• short ice-free season increases transport and storage costs.

Holman (Ulukhaktok) in April

Johanna Wandel, the "Geo-geek," went to Holman, Northwest Territories, in April 2005, and sent back these great pictures: White on White. 

Wandel gets around; here are other photo essays on Iqaluit and Arctic Bay on Baffin Island, ice roads near Yellowknife in the Northwest Territories, and Greenland.

What else can go wrong in the Arctic?

A few days ago I posted a brief list of the scenarios the Canadian Forces are practicing this August in their Northern Operation Nanook 2008 training exercise: What sorts of things can go wrong in the Arctic?

Gary Rice, a retired Canadian colonel, adds to the list in a 2007 paper "Four Selected Intrusion Scenarios."   The paper is in Defence Requirements for Canada's Arctic which is published by the Canadian Conference of Defense Associations Institute.  Each scenario is laid out on detail.  The four:

• Rescue and evacuation.  February 2010. A foreign commercial cargo/passenger aircraft makes an emergency landing.
• Terrorist attack. August 2008. A non-state terrorist group smuggles a nuclear device into a northern port.
• Sovereignty challenge.  July 2009. A foreign nation with the intent to transit the North West Passage without prior notice.
• Civil unrest and domestic sabotage.July 2013. A radical separatist group barricades a highway and sabotages a gas pipe-line and oil and gas wells.

This may be the ugliest: