Greenland is the least densely populated country in the world, and its economy was until now mainly driven by fishing exports, a small amount of tourism, and one working gold mine. The fact that Greenland is not exactly an economic powerhouse or tourist hotspot is hardly surprising considering that a two kilometer thick layer of ice covers 80% of the country for 12 months of the year. Challenging conditions one might say.
While the icy realities of Greenland might protect its inhabitants from the ugly side-effects of industrialization and urbanization, it also stifles the country’s political and economic independence. As of now, the world’s largest island is a self-governed colony of the Kingdom of Denmark and therefore subsists on an annual subsidy provided by the Danish government. In its effort to gain more political and economic independence from the Danish crown, the people of Greenland recently were recently aided by an unlikely ally: global warming. As global warming slowly destroys the Greenlandic ice sheet new technologies allow for exploring the island in the search for natural resources.
After a series of unsuccessful attempts over the past 30 years by oil companies to make commercial petroleum finds in Greenland, the island is, in fact, emerging as a lucrative exploration and extraction site for the oil and gas industry. The United States Geological Survey (USGS) estimates that 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil is to be found north of the Arctic Circle.
Those estimates put the oil reserves in Greenlandic waters at some 52 billion oil barrels which would propel the island into the top tier of global oil producers while singlehandedly achieving economic independence for its economy.
In order to chart these promising resources, the Canadian oil exploration company EnCana was granted two exploration and exploitation licenses in the sea west of Nuuk in 2002 and 2004. Since then other energy giants such as Cairn Energy and NUNAOIL A/S were granted four exploration and exploitation licenses of the South Western coast.
Since oil exploration licenses were first offered more than ten years ago, considerable advances haven been made in surveying and extraction technology that ultimately resulted in the discovery of both oil and gas fields by Cairn Energy in the autumn of 2010.
The race for natural resources in the Arctic Circle is, however, not limited to the business level, arctic powers are also scrambling to take advantage of the region’s potential. Russia, for instance, plans to deploy two army brigades to the north to defend its interests in the region and is upgrading its six nuclear icebreakers. At the same time Canada is currently conducting its largest ever modern-day Arctic military exercise and Norway has already shifted its military command center to the Arctic town of Reitan.
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