March 21, 2008

US Co claim to develop the Arctic oil and gas

Vast oil potential in Arctic, new data says

Randy Boswell , Canwest News Service

Published: Thursday, March 20, 2008

A U.S.-based company that has controversially laid claim to nearly all of the Arctic Ocean's undersea oil said Thursday that new geological data suggests a "potentially vast" petroleum resource of 400 billion barrels.

That figure is backed by a respected Canadian researcher who recently signed on as the firm's chief scientific adviser.

Las Vegas-based Arctic Oil & Gas has raised eyebrows around the world with its roll-of-the-dice bid to lock up exclusive rights to extract oil and gas from rapidly melting areas of the central Arctic Ocean, currently beyond the territorial control of Canada, Russia and other polar nations

The company, which counts retired B.C. senator Edward Lawson among its directors, has filed a claim with the United Nations to act as the sole "development agent" of Arctic seabed oil and gas.

The firm acknowledges that the Arctic's petroleum deposits are the "common heritage of mankind," but has argued that the polar region requires a private "lead manager" to organize a multinational consortium of oil companies to extract undersea resources responsibly and equitably.

The Canadian government has dismissed the company's "alleged claim" over Arctic oil as having "no force in law," but experts in polar issues have raised alarms about the firm's actions, saying they could disrupt efforts to create an orderly regime for exploiting resources and protecting the Arctic environment under international law rather than a marketplace model.

In its latest statement about the polar seabed's "enormous reserve potential" for petroleum deposits, Arctic Oil & Gas cites recent scientific evidence that huge, floating mats of azolla - a prehistoric fern believed to have covered much of the Arctic Ocean during a planetary hothouse era about 55 million years ago - decomposed soon after the age of the dinosaurs and exist today as "vast hydrocarbon resources" trapped in layers of rock below the polar ice cap.

Bujak, a former geoscientist with the Geological Survey of Canada who now works as a private consultant in Canada and the U.K., is described in the Arctic Oil & Gas statement as confirming the "highly probable validity" of recent research pointing to rock layers "extremely rich" in "hydrocarbon precursors" throughout the Arctic basin.

Bujak, who previously worked for PetroCanada as a petroleum geologist, co-authored a landmark 2006 study in the journal Nature that first detailed the ancient azolla explosion that shows up today in Arctic seabed core samples.

He is also scheduled to describe the potential Arctic oil jackpot as the keynote speaker at a Calgary meeting of the Canadian Society of Petroleum Geologists in May.

"We are extremely fortunate to have brought on board an expert of the calibre of Dr. Bujak," company CEO Peter Sterling says in the statement. "His expertise and his connection to other geoscientists allow us to validate data and confirm its utility in our pursuit of the vast hydrocarbon resources that we intend to successfully locate and extract in the 'Arctic Commons'."

Neither Bujak nor Lawson could be reached for comment on Thursday.

Scientists have predicted that global warming could leave the entire Arctic virtually ice-free for months at a time within 20 years. That prospect has hastened a scramble among nations with a polar coast - namely Canada, Russia, the U.S., Norway and Denmark, which controls Greenland - to try to strengthen their scientific claims under the UN Convention on the Law of the Sea to extended territorial sovereignty over the Arctic Ocean floor.

A report issued last week by the European Union's top two foreign policy officials also highlighted the looming international struggle over Arctic oil deposits.

Authored by Javier Solana, the EU's foreign policy chief, and Benita Ferrero-Waldner, Europe's commissioner for external relations, the study pointed to "potential consequences for international stability and European security interests" as the retreat of Arctic ice makes shipping and oil and gas exploration a reality in the region.

Noting the "rapid melting of the polar ice caps," the report noted that "the increased accessibility of the enormous hydrocarbon resources in the Arctic region is changing the geo-strategic dynamics of the region."

The EU report was just the latest in a string of recent warnings about potential clashes over Arctic resources - including a prediction from former U.S. Coast Guard Cmdr. Scott Borgerson of possible armed conflict between the U.S. and Canada over Arctic sovereignty.

"The United States should not underestimate Canadian passions on this issue," Borgerson, a fellow at the influential Council on Foreign Relations, wrote in an article in the latest issue of Foreign Affairs magazine. "Unless Washington leads the way toward a multilateral diplomatic solution, the Arctic could descend into armed conflict."

© Canwest News Service 2008

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