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Sunday, April 02, 2006

Global warming: What's in it for Halliburton?

Philip Bethge reports for Der Spiegel Online on the ways investors and corporations are planning to profit from the rapid melting of the Arctic ice cap in Global Warming: Climate Change Sparks Scrap for Arctic Resources 03/31/06.

The melting is opening up new possibilities for sea routes:

Last year was also a record year in many respects. According to data gathered by satellites, there is less sea ice between Greenland and Siberia than ever before: In August, the Russian ship "Akademik Fyodorov" was the first vessel in the history of seafaring to cross the pole without needing ice breakers. There are hardly any ice floes left in the Northwest Passage, which connects the Canadian Arctic to Asia. And even the Northern Sea Route along the Siberian coast, once not entirely navigable, was free of ice for a whole month last year.

That opens opportunities for port cities. Bethge writes, " It likely won't be long before cargo ships traveling from Hamburg to Yokohama will be able to sail along the Siberian coast - instead of through the Suez Canal." And:

The route from Russia to North America could be similarly shortened: a trip from Murmansk at the moment takes around 17 days. But by going via the Canadian port of Churchill, and transporting the goods south by rail, the journey will be cut to eight days at sea.

The first pioneers are already placing their bets on the new freight connection via Hudson Bay, such as the American entrepreneur and railway magnate Pat Broe, who is now seen as something of a visionary. In 1997 he bought the deserted port of Churchill from the Canadian government for a paltry seven dollars. Broe now calculates that the investment could soon be earning him $100 million a year.

And here's the Halliburton opening: "The US Geological Survey estimates that a quarter of the world's oil and natural gas reserves lie hidden under the Arctic Ocean." Time to get out the tin hats with the "Halliburton" labels.

But Bethge isn't writing primarily to help people figure out the best stock plays for the global warming catastrophe:

If the thaw continues, then excavation could soon become financially viable. Norway and Russia are already bickering with each other over drilling rights in the Barents Sea. The region's gas will soon be processed in Murmansk and Hammerfest, and then transported to other parts of Europe and America. The size of the Russian Shtokman gas field alone is estimated at 3.2 trillion cubic meters, making it one of the largest known deposits in the world.

The thought of such possibilities has plunged the Arctic nations into a gold rush frenzy. But it's certainly not only good news. The Arctic thaw will also create changes in the environment that bode ill in particular for coastal residents. The livelihoods of many of the indigenous Inuit peoples depend on the sea being frozen. Hunting on the ice is a key part of their cultural traditions.

Unfortunately, this is not tin-hat stuff at all. It's what we're really doing to the planet's environment:

On Sept. 21, 2005, sea ice extent dropped to 2.05 million sq. miles, the lowest extent yet recorded in the satellite record.

The massive ice sheet is almost five times the size of Germany and up to three kilometers thick. It contains enough water to increase the world's sea levels by more than seven meters. The unsettling news from the scientists is that the melting process seems to have already begun. "A further rise of two to three degrees and the melting of the Greenland icecap will be irreversible," warns Philippe Huybrechts from the University of Brussels in Belgium. The ice on Greenland itself could completely vanish within the next 1,000 years, Huybrechts says, estimating that together with melting in the Antarctic, there will be a rise in sea level of up to 90 centimeters by the end of the century.

That means that the quarreling Danes and Canadians need to resolve their testy territorial dispute over Hans Island pretty quickly - unless they want to find themselves bickering over a stretch of water. At least Copenhagen and Ottawa have agreed to carry on their argument in a more civilized manner: While attending last autumn's UN General Assembly meeting in New York, Danish Foreign Minister Per Stig Møller assured delegates that there wouldn't be any more flag-planting contests. Both countries remain adamant about sticking to their territorial claims, but the banner battle has been resolved without a diplomatic incident. It appears, Møller said gleefully, that the Canadian flag has fallen down of its own accord.

posted at 12:44:00 PM by Bruce Miller

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