ENERGY CONCERNS

India Faces Big Challenges In Its Quest For Arctic Energy

Ashwin Ahmad New Delhi 12 May 2019

While observers all over the world are dubbing the ongoing trade war between the U.S. and China as the ‘New Cold War’ another kind of ‘Cold War’ is breaking out far away from media headlines in the Arctic Circle.  In a recent speech, U.S. Secretary of State Mike Pompeo brought this battle into the media spotlight when he specifically singled out both Russia and China for their “aggressive moves” in the region. The fact that Pompeo made these comments just before a meeting with seven other foreign ministers whose countries are members of the Arctic Council suggests that apart from the battle for global trade, the new frontier for geo-political competition will be the Arctic region.

The U.S. Secretary of State’s warning comes amidst increased Russian and Chinese activity in the North Sea. Already, Russian activity has increased drastically in the Arctic region but also measures have been put in place to safeguard its interests. As Professor Sanjay Kumar Pandey, director of Russian and Central Asian Studies in JNU points out, Russia has established a large military presence in the Arctic with around two-thirds of its submarines based there. As for China, Beijing has self-declared itself as a “near-Arctic state” and has already undertaken voyages along the treacherous North Sea route. Pandey estimates “that in 2017 27 vessels passed through the Arctic in 2017. Eleven of these 27 vessels were from China or going through China.”

But what is the reason for this? Why has the Arctic region caused such a flurry of activity? The reason is energy. According to a report carried out by the U.S. Geological Survey (USGS), which provided a hydrocarbon assessment of the Arctic, 13 percent of the world’s undiscovered oil resources (90 billion barrels) and 30 percent of the world’s undiscovered natural gas resources (1,669 trillion cubic feet) lie in the region.

Not surprisingly Russia, who has the largest presence in the Arctic – 10 of the largest cities in the region are Russian – is making every bid to ensure that the region stays under Russian control. But sanctions lobbied at Russia post-Ukraine and aggressive activity on the part of Beijing –  China is attempting to bring Arctic shipping under the umbrella of the BRI by dubbing the Northern Sea Route as the ‘Polar Silk Road’ – suggests that this is a battle that Moscow may not be able to win alone.

Experts say that this is where India can fit into this geo-political race.  Earlier, New Delhi has shown little strategic interest in the Arctic region, a strategy that has since changed in the last three to four years. As Pandey points out, in recent joint declarations between India and Russia the Arctic region has been prominently mentioned. Not only that, Moscow has specifically asked New Delhi to participate in Arctic oil exploration in recent times.                   

While most experts are in agreement that India must shift its stance on oil exploration in the Arctic, they also argue that New Delhi must proceed with caution. Uttam Sinha, Senior Fellow, NMML says that rising environmental concerns especially among Scandinavian countries – who form part of the eight-member Arctic Council – and growing global resentment towards fossil fuels have made mining for oil resources a complicated matter. “Though oil reserves have been discovered in the Prudhoe Bay in Alaska there has been large scale public resistance to big oil companies drilling there. In fact, in a recent survey it was found that 70 percent of American voters do not want Alaskan oil.”

Given that India only has observer status at the moment in the Arctic council, Sinha believes that it is even more important for New Delhi to understand local sentiments are at play here among the countries concerned. He points to the example of the Labour Party in Norway whose stance strongly determines oil politics in the region. “The Labour Party has a strong labour union which comes from the oil industry itself. But they also have a populace who will fight hard for a clean environment. Such constituents can create doubts in the minds of political parties.”

While such issues are there in Scandinavia and many parts of the west, India faces a different set of problems with Russia. The sanctions have hit Russian investment ensuring that India will have to spend more of its own money for oil exploration. However, this is where New Delhi is caught in a Catch-22 situation. The reluctance by many Russian oil giants to put down other private players in what they see as their turf is something that will also cause some problems for New Delhi. Nevertheless, Sinha is confident that India’s strong scientific base and knowledge of the Arctic region is something that other countries will want to have on board when it comes to navigating and mining in one of the world’s most difficult regions.                    

“India must look at both scientific exploration and oil mining when it comes to negotiating the Arctic region. Let us also not forget we are the lead player in climate change in the world and overnight it will be difficult for us diplomatically to abandon our beliefs in the quest for oil. We must balance both these interests as we move forward.”

 

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  • A well articulated write up on the important natural resources. A developing India will always be energy hungry and all avenues to secure energy resources need to be tapped in right earnest. While alternative sources of non-petroleum energy is being explored the need to look for new petroleum sources is inescapable

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