Arctic Economics

Snoehvit's Shaky Start

 

Snoehvit gas field and the pipeline to the LNG plant near Hammerfest.  Source: StatoilHydro.

Guy Chazan reports (Norwegian Oil Firm Goes to Energy’s Last Frontier) that StatoilHydro's Snoehvit project was ambitious. Remote-controlled gas wells at the bottom of the Barents Sea; 90 miles of underwater pipeline bringing the gas to shore; a liquification plant built in Spain, floated to a remote island in northern Norway on the world's "largest heavy-lift vessel," and floated into position on "a high tide" and "a full moon."

But things haven't gone as well as they might:

The Stoltenberg Report

Last June, the Nordic foreign ministers asked Norway's former Minister for Foreign Affairs and Defence, Thorvald Stoltenberg, for ideas to encourage closer foreign affairs and security cooperation over the next 10 to 15 years. 

Now we have it:  Nordic Cooperation On Foreign and Security Policy.  Stoltenberg's 13 proposals are his own work, based on conversations with politicians and experts; this is not the result of committee deliberations and there was a very limited staff.  These will be developed further in coming weeks and will be taken up at a meeting of the Nordic foreign ministers in Reykjavik this spring (Stoltenberg Report Presented to Nordic Foreign Ministers).

Not all of the proposals deal with the Arctic, but many do.  In summary:

Hang together or separately

What are the Russians up to in and off of Norway (Norway's Security)...

...where fighter jets scramble on average once a week to intercept Russian warplanes buzzing close to their country. The Kremlin’s aircraft and ships do not quite break international law. But they commit what a senior official terms “breaches of etiquette”. These have included naval manoeuvres in the midst of Norway’s oil and gas platforms in the North Sea, involving aggressive air sorties that grounded all offshore helicopter flights; that was inconvenient, expensive and dangerous. Also troubling was a mock bombing run against Norway’s northern command centre at Bodo, and at least three other, so far unpublicised, incidents.

Whatever it is, it's making people nervous.  Norway, Sweden, and to some extent Finland, are looking at increased security co-operation: North stars.  Introducing the Nordic Atlantic Defense Organization:

Rambunctious Russians

The Economist reports on Russian activity in the Barents Sea and northeastern Alaska (The Arctic contest heats up):

...in Norway, where fighter jets scramble on average once a week to intercept Russian warplanes buzzing close to their country. The Kremlin’s aircraft and ships do not quite break international law. But they commit what a senior official terms “breaches of etiquette”. These have included naval manoeuvres in the midst of Norway’s oil and gas platforms in the North Sea, involving aggressive air sorties that grounded all offshore helicopter flights; that was inconvenient, expensive and dangerous. Also troubling was a mock bombing run against Norway’s northern command centre at Bodo, and at least three other, so far unpublicised, incidents.

Will the financial crisis slow development of the Shtokman gas field?

Location of the large Shtokman gas field in the Barents Sea (Gazprom map)

From the Barents Observer: Shtokman in jeopardy?

The rapidly unfolding world financial crisis could have wide-reaching consequences for a number of giant regional industrial projects. One of them is the Shtokman field in the Barents Sea.

Several major industrial projects are under planning in the Barents Region. Now, the financial crisis and falling raw material prices could result in the postponement of several of them. As BarentsObsever recently reported, leader of the Shtokman Devlopment Company, Yuri Komarov already last month expressed concern about possible Shtokman consequences from the world financial crisis. The situation looks far more gloomy today. Gazprom is heavily dependent on loans and credits for the development of new projects. Now, the credit market is drying out, and new major loans for Gazprom might be put on hold.

Overview of the Northern Economy

Statistics Norway has pulled together a survey of the Arctic economy.  The report was edited by Solveig Glomsrød and Iulie Aslaksen: The Economy of the North. 

This is a systematic survey covering the same issues in a similar way across the various Arctic countries.  The editors have coordinated the efforts of a team with members from almost every Arctic country.

Chapters look at the distinctive elements of the circumpolar economy, the natural resources of the Arctic, the individual regional economies, the interaction between the traditional subsistence economies and modern market economies, and the impact of climate change on economic activity.

Recommended.

Edit Dec 23 2008

The Global International Waters Assessment

FYI:

The Global International Waters Assessment is preparing studies of the world's marine water bodies.  Studies are available for three Arctic regions:

Svalbard fish patrol

The Russian trawler Kodrun, detained by the Norwegian Coast Guard.

Illegal fishing is a serious problem in some Arctic waters.  The World Wildlife Fund looks at the issue in this working paper: Illegal Fishing in Arctic Waters.  The paper focuses on cod in the Barents Sea, and on Alaska pollock in the Western Bering Sea and the Sea of Okhotsk.  

In the last week the Norwegian Coast Guard has detained two Russia fishing vessels in the vicinity of the Svalbard Islands for fishing violations: Russian trawler arrested in Spitsbergen waters; Norway arrested another Russian vessel (Svalbard and Spitzbergen refer to the same islands on the northern edge of the Barents Sea.  I've been using Svalbard in this blog and continue to do so here, but the Barents Observer refers to Spitsbergen).

Svalbard Islands Offshore Oil and Gas: Norway vs Russia

Norway and Russia disagree about Russian rights to explore for oil and gas around the Svalbard Islands.  Russia plans to do that in 2009  The Barents Observer reports: Norway challenged by Russian plans in Spitsbergen waters. 

In January 2007 the Norwegian Academy of Science and Letters held a conference on Politics and Law - Energy and Environment in the far north.  Legal scholars from Russia, Norway, and the U.K. offered different perspectives on the subsurface rights issue.  The papers are available from the conference web site.

Snow White's Gas

Norway has begun to exploit its Snøhvit (Snow White) Gas Field in the Barents Sea: Norway Looks North for Oil and Gas (Erin Wayman, Geotimes, February 2008).  Underwater production facilities and pipelines, invisible from the surface, and designed to by "overtrawlable," extract the gas and deliver it over 140 kilometers to a liquification plant built on an island near Hammerfest in northern Norway.  LNG carriers then deliver it to market.

 

Both figures: Statoil (http://www.statoil.com/statoilcom/snohvit/svg02699.nsf?OpenDatabase&lang=en)