It is unfortunate for politicians that God did not divide the geology of the Earth according to the map of world states - it was human hands that drew those lines later, whereupon rests much angst in the Middle East and in Africa concerning oil, gas and mineral wealth. As the demand for energy rises across the world, gas as a resource is provoking antagonism between Russia and the U.S. in the Arctic, and between China and Japan (who are also old foes) in the East China Sea.
The politics of the Arctic region are about to be transformed in part through the development of the Snohvit ("snow white") gas field. The gas will be liquefied by cooling it to minus 165 degrees C. so that it can be transported in tankers around the world, initially to test Europe's first Liquefied Natural Gas Plant, then in 2007 full production will commence with gas being supplied to Norway via a 100 mile long pipeline. Since Snohvit is located entirely within Norwegian waters, there should be no objection, and yet the development project has met with controversy, since it is seen as "the door-opener to the Barents Sea", a potential reserve that is as yet virgin territory for oil and gas production.
Within the Russian sector of the Barents Sea lies the Shtockman field which is ten times the size of Snohvit and is therefore "big-fish" indeed. Russia holds most of the cards in the cat and mouse game, formerly of "chase the submarine" but now "chase the contract", and it is a political chess-game whose outcome will depend on exactly which countries are allowed to be pieces on the board. Arctic reserves of gas are estimated at 3,600 billion cubic metres, which exceeds the known existing Russian reserves of 3,169 billion cubic metres. It is unlikely that the U.S. will get a slice of the action in view of U.S. vice President Dick Cheney's comments to the effect that Moscow was playing power politics with its natural resources, and that oil and gas must not be turned into intimidation or blackmail. This has apparently not gone down well with Moscow. Two French companies, Gaz de France and Total, and a German company, RWE Dea are in readiness to benefit from Russian bad feeling toward the U.S. oil giants, and are already part of the consortium with Statoil in the exploitation of the Snohvit field.
This is yet another serious blow to the U.S., since Washington is working hard to diversify its imports away from Middle East dependency - including, as I have written about in the previous two postings, embarking on a wholesale manufacture of synthetic oil products (gasoline) from coal. The Barents Sea might provide a politically stable alternative supply of both oil and natural gas - a prize indeed!
It is remarkable that the region has remained unexploited purely over a demarcation dispute about where a border lies. Before 1970, the (then) Soviet government drew a maritime line from its north-western coast directly up to the North Pole. However, Norway is now seeking an internationally recognised "median line principle" in which the border is drawn equidistant from each dividing party's coastal borders. In consequence of this lack of resolution, an area of 66,800 square miles, which is estimated to hold 12 billion barrels of oil has remained "pure" from all exploration. However, a compromise between the two sides looks likely, as both Russia and Norway are keen to tap the Barents Sea's resources: huge though they are, it is salient to note that 12 billion barrels is still only sufficient to keep the entire world running in oil for a little more than four months!
Environmental groups are not happy about the prospect of Arctic Development, however, arguing that since the ice-cap is already melting there, the region should be kept free from exploitation. I don't think that's very likely somehow!
Japan and China are also in dispute about how both sides might exploit a giant gas field (200 billion cubic metres worth) located in the East China Sea, since it is straddled by the water-border between the two nations. A tricky one, I suppose, as it is the potentially the same resource that is being tapped even if legitimate "holes" are bored within each of the two jurisdictions. Apparently, there is to be a summit in Beijing to iron-out a strategy on this tricky matter. Meanwhile, both Japanese and Chinese warships have been observed patrolling the area. Beijing has said that it would like to make the East China Sea a "sea of cooperation" between the two nations, but in view of recent comments by Tokyo that China should withdraw from the field, it may well become a "sea of confrontation".
Meanwhile these potential "cold wars" in the North and the East will gather political substance; with as yet ungauged consequences.
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