Greenland’s political crisis concerns locals and foreign investors alike

Greenland's Former Prime Minister Aleqa Hammond addresses attendees at Arctic Frontiers, January 2014. © Mia Bennett.

Greenland’s former prime minister Aleqa Hammond addresses attendees at Arctic Frontiers, January 2014. © Mia Bennett.

Yesterday morning, mining company Rare Earth Minerals (REM) announced that it had discovered rare earth minerals within its licensed areas near Narsarsuaq, in southern Greenland. Listed on the Australian stock exchange, REM is one of several companies from Down Under investing in mineral exploration on this Arctic island. REM’s four exploration licenses in Greenland are in close proximity to Greenland Minerals and Energy Limited’s (GMEL) Kvanefjeld project, perhaps the country’s biggest and most promising rare earth minerals site. GMEL, too, is Australian. Thanks to all of the mining that has taken place in the red, sandy deserts of Western Australia, numerous companies have developed expertise that can be applied as far away as the Arctic.

REM’s CEO explained in a press release,

“The discovery of a new Rare Earth Element deposit east of the world class Kvanefjeld REE project is significant for REM….some of these samples contain significant quantities of neodymium oxide, which is a critical rare earth oxide or CREO as defined by the US Department of Energy. This along with the proximity of these results to two of the world’s largest REE deposits, is very encouraging indeed.”

Neodymium oxide is used to make lasers and colored glasses, such as sunglasses. That means that in the future, beach-goers at more southern latitudes could be looking through a little bit of Greenland as they watch the warm waves crash on the shore. But due to the political crisis rocking Greenland, that day has slipped further into the future.

Political crisis could jeopardize mining projects

Just a year and a half ago, the Siumut party cruised to victory following an election dominated by the mining issue and the question of whether to import thousands of foreign workers. After winning a close (15-14) vote in Parliament last October to overturn the ban on uranium mining, Siumut and its coalition partner, Atassut, fulfilled Prime Minister Aleqa Hammond’s promises to promote the extractive sector.

Yet the victories of 2013 have abruptly become a distant memory for Hammond. She has had to resign in the wake of accusations that she used more than DKK 100,000 (USD $17,000) in state funds for personal expenses, including flights, hotel, and minibar expenses for her family members, according to Greenlandic newspaper Sermitsiaq. The allegations are all the more ironic in light of her official biography, which notes,

“Aleqa loves to spend time with her family, which are very important for her. Often the children are brought along, when she goes to work or while travelling. It is important for Aleqa that the children get to know both of her ”worlds”.”

Two ministers from her own party, including the mining and natural resources minister Jens-Erik Kierkegaard, and two ministers from the Atassut party also resigned. The parliamentary coalition has collapsed, as many members of Atassut have now sided with the opposition party, Inuit Ataqatigiit (IA). Kierkegaard was supposed to travel to China to meet with investors, but that trip has now been cancelled. Siumut party member Kim Kielsen, Minister for Nature and the Environment, has stepped in as acting prime minister. Greenland will now hold elections on November 28.

Greenland’s political instability makes it risky territory for investors from all corners of the world. As I’ve stated before on this blog, however, political instability – whether in Russia or in Greenland – is often good news for environmentalists, since developmental interests shy away from tumultuous investment grounds. While REM’s press release does not mention anything about the political tumult in Greenland, it’s sure to be preoccupying the minds of the company’s board members. Sara Olsvig, the leader of IA, wants to revisit the uranium mining question with a nationwide referendum to make sure that all people’s voices are heard rather than just those of parliamentarians. If the people of Greenland vote to reinstate the ban, that could jeopardize certain agreements that the Greenlandic government has already made with several mining companies.

Little political apathy in Greenland

Never too young to get involved: protestors in Nuuk gathered outside parliament last year to fight overturning a ban on uranium mining. © William Davies, 2013.

Never too young to get involved: protestors in Nuuk gathered outside parliament last October to fight overturning a ban on uranium mining. Photo courtesy © William Davies, 2013.

A referendum would likely attract a lot of public debate in Greenland, where political involvement is already high. 74.2% of eligible voters participated in the 2013 elections. Earlier this month, before Hammond officially stepped down, 600 protesters called for her resignation outside parliament in Nuuk. In a city of about 16,000 people, this represents close to four percent of the population. Imagine an equivalent in a place like London, where the population tops 8 million. This would mean some 316,000 people outside 10 Downing calling for David Cameron’s resignation – numbers that are hard to imagine.

The average person in Greenland might be more invested in politics than the average Westerner because what gets decided in Nuuk can instantly have a bigger impact than it might in, say, the United States, where new policies have to filter down through numerous bureaucracies. In a place where you can walk down the street and run into the (now former) prime minister, who the local newspaper simply refers to by first name, there’s no such thing as high politics. Instead, they’re part and parcel of daily life. A hunter I encountered in Kangerlussuaq this past summer complained about the government policy first implemented in 2013/2014 prohibiting winter and spring hunting. Whereas such a regulation in the U.S. might only affect a small proportion of the population, in Greenland, where ten percent of the population is directly or indirectly employed by the hunting sector, such a seemingly arcane decision exerts a much bigger impact. Scale up such policy debates to the level of rare earth mining, and you have a much bigger issue on your hands with the potential to affect quality of life and the pursuit of traditional livelihoods for a great deal more than 10 percent of the population.

Political crisis could ground Air Greenland flights

Mining questions aside, the political tumult is already affecting the ability for Greenlanders to plan for next year. A decision on whether to operate the summertime Air Greenland route between Iqaluit and Nuuk in 2015 will be up in the air until after the election, according to CBC. The airline needs politicians in both cities to commit to buying seats in order for the route to be financially viable. Worse yet, ten other domestic Air Greenland routes have yet to be confirmed for next year, as they depend on government subsidies that have not yet been decided. In a country with no roads in between communities, these air routes are often the only way of getting around, even between locations that are close to each other as the crow flies, like Sisimiut and Kangerlussuaq.  Boats and ferries offer an alternative, but they are slower and not always available due to weather conditions. In short, Aleqa Hammond’s decision to fly her relatives around the world could render it impossible for many in Greenland to take a short plane ride to see their own relatives nearby.

Up to ten Air Greenland routes are up in the air pending government subsidies, which cannot be decided until after the November 28 elections. Photo: © Mia Bennett.

Up to ten Air Greenland routes are up in the air pending government subsidies, which cannot be decided until after the November 28 elections. Photo: © Mia Bennett.

NASA Satellite Imagery Reveals the Arctic at Night

Composite image of night lights in the Arctic, as imaged in April and October 2012 by SUOMI NPP's Day/Night Band. Data downloaded from NASA Earth Observatory.

Composite image of night lights above 60°N (with the Arctic Circle also included for reference), as imaged in April and October 2012 with SUOMI NPP’s Day/Night Band. Data downloaded from NASA Earth Observatory. Click for full resolution.

In winter, the Arctic is considered to be a dark and dreary place save for when the northern lights shimmer and cascade across the polar skies. Yet even on a night when the aurora borealis are not putting on their performance, many parts of the Arctic are still brightly illuminated. Thanks to the Suomi National Polar-orbiting Partnership (Suomi NPP) satellite, jointly operated by NASA and the National Oceanic and Atmospheric Administration (NOAA), and put successfully into orbit on October 28, 2011, we can now see this in spectacular detail. 

Whereas many phenomena in the Arctic were previously difficult for satellites to image in wintertime due to the lack of daylight, SUOMI NPP’s Day/Night Band can clearly detect manmade and natural developments, like shipping, oil and gas development, and sea ice break-up at night, with or without lunar illumination. Its resolution is a little bit coarse – 750 meters – but its sensitivity is impressive, allowing it to detect light from a source as small as a street lamp. You may have seen some images from the satellite already, such as of the Nile Delta aglow or of the Korean Peninsula, where the contrast in artificial lighting between the two countries is as stark as day and night.

The image at the top of this post, a composite of cloud-free images taken in April and October 2012, depicts the earth north of 60°N, with the Arctic Circle included for reference as well. I downloaded the GeoTIFFs from NASA Earth Observatory and displayed them in ArcMap using the Polar Azimuthal Equal Area projection.

NorwayNightLights Norway’s well-developed Arctic coastline bustles with activity from the Lofoten Islands, past  Hammerfest and around the North Cape (Nordkapp). The lights then continue along Russia’s northwest coastline on the Kola Peninsula. Here, the city of Murmansk – the largest north of the Arctic Circle – forms a distinct point of light.

Iceland, too, has lots of activity around its coasts, especially near Reykjavik. However, south of Vatnajökull, Iceland’s ice cap, there is a desolate stretch of dark coastline, where the unforgiving sandur - glacial sands – stretch out to sea. In Canada, a few places twinkle in the Northwest Passage and along the Dempster Highway leading from Whitehorse to Tuktoyaktuk, on the edge of the Arctic Ocean.

Greenland is dark save for a tiny spot of light at Nuuk, its capital. The shape of the island overall, however, is visible thanks to the reflectivity of its ice cap. Ice reflects moonlight more readily than water, which is why in the above image, polar sea ice has a lighter shade of blue than the surrounding ocean. This phenomenon, the albedo effect, is the same reason why as the ice shrinks, less sunlight is reflected back into space. Instead, more is absorbed by the darker seas, which in turn expand and warm.

UrengoyNightLightsBut the places that blaze most brilliantly of all are the oil and gas production sites. Alaska’s North Slope appears brighter than even the big cities of Anchorage and Fairbanks. In Russia, the sources of light don’t seem to correspond at all with where the population centers are. Looking at this image, one might think that northwest Siberia was full of cities jammed up tight against one another. In fact, these are the lights of the Urengoy gas field, the second largest in the world. NASA already removed the gas flares from the composite image during processing, meaning that these are just the lights from places like camps and small settlements built around the hubs of industrial activity. Were the gas flares to be included, Urengoy would appear even brighter. Russia is the world’s biggest practicer of this wasteful activity, used to burn off natural gas produced during oil extraction that cannot be consumed or exported. It costs the country some $5 billion annually, according to the World Bank.

Sadly, all of these artificial sources of light emitted from the ground can make it impossible to see the aurora. Skyscrapers and neon billboards glitter in global metropolises like New York City or Tokyo, but only a handful of stars are visible in the sky. Just as the Manhattan skyline will never compare to the Milky Way, I doubt the gas flares and bright lights of Urengoy will ever hold a candle to the northern lights. To see them in their full glory, you need to go somewhere unspoiled by artificial lighting. While it’s easier to find pitch black conditions in the Arctic than in most other regions in the world, the image above is a reminder that even places we think are wild and unpopulated – like northwest Russia – are often blindingly lit.

SUOMI NPP is so sensitive to low light that it can even detect swaths of bioluminscent plankton, which sometimes grace the Arctic’s seas. But I’m not sure if there’s any consolation in the fact that even though we can now manufacture satellites that detect everything from aurora to bioluminescence, we’ve become less able to see these phenomena from our earthly perches.

The aurora as viewed from Å, Lofoten, Norway. © Mia Bennett, January 2013.

The aurora as viewed on a dark night from Å, Lofoten, Norway. © Mia Bennett, January 2013.

Alaska ships its first oil to Asia in a decade

Presumed Route of Polar Discovery tanker carrying oil from Alaska to South Korea.

Presumed Route of Polar Discovery tanker carrying oil from Alaska to South Korea. The brown line denotes the Trans-Alaska Pipeline, while lines in the sea denote commercial shipping (data from the European Commission).

On September 26, ConocoPhillipsPolar Discovery departed the Valdez Marine Terminal in Alaska for Yeosu, South Korea. Valdez is where the Trans-Alaska Pipeline, which runs from the North Slope, terminates. The North Slope produces the bulk of Alaska’s oil. Polar Discovery can carry 784,000 barrels – about a day and a half’s worth of North Slope production. The tanker belonging to ConocoPhillips, Alaska’s biggest oil producer, is transporting the first shipment of oil from Alaska to Asia in ten years.

The 1975 Energy Policy and Conservation Act, passed during the oil embargo to protect American consumers from price shocks and volatility, generally prohibits U.S. oil from export. Debate over the practicality of the law has grown in recent years, especially thanks to the hydraulic fracking boom in North Dakota. Still, only a few select locations in the U.S. are exempt from the ban. Oil transported through the Trans-Alaska Pipeline has been permitted export since 1996, while Cook Inlet oil has enjoyed the privilege for a longer time, since 1985. At the time, then senator Frank Murkowski (R-Alaska) declared,

“This is a small beginning but it can be a catalyst to unlock some of the previously impenetrable barriers.”

If that name sounds familiar, that’s because Murkowski is the father of current Senator Lisa Murkowski (R-Alaska), who filled his seat when he became governor in 2002. She then won election in 2004. Remarking on the export of North Slope oil to Korea, Murkowski stated in words that echoed her predecessor:

“This is the first North Slope cargo to leave Alaska for overseas markets in a decade. I am encouraged to see Alaska increasing its participation in global oil markets. It’s my hope that Lower 48 oil will soon follow suit.”

South Korea and Arctic oil

South Korea’s purchase of Alaskan oil fits into its quest to diversify its sources of oil. When Alaska exported oil previously from 1996-2004, South Korea purchased nearly half of the state’s 95.49 million barrels of crude oil exports. The rest all went to other Asian countries, yet the total exports only accounted for 2.7% of state production.

Currently, South Korea imports most of its oil from the Middle East, but that picture is changing. The below pie charts from the U.S. Energy Information Administration illustrate how Russia has entered the picture since 2011; the country now provides 4% of Korea’s imports. Whether South Korea will increase its reliance on Russia is unknown, since the crisis in Ukraine has called into question Russia’s reliability as a provider. In any case, a further rebalancing from 2013 is probably necessary due to a host of other geopolitical problems. Already, South Korea has cut oil imports from Iraq. Imports from the war-torn Middle Eastern country, which accounted for 10% of oil imports in 2013, fell by 23.4% from January to April of this year compared to the same period last year.


Pipelines to the Arctic

Thanks to the construction of new pipelines in the Russian Far East, the country is becoming an ever more important source of oil for countries in East Asia. The capacity of the East Siberia-Pacific Ocean Pipeline (ESPO), which opened in 2010 and stretches all the way from oil fields in West Siberia, will reach 600,000 barrels a day by 2015. For comparison’s sake, the Trans-Alaska Pipeline (TAP), which transported the oil from the North Slope to Valdez that is now making its way to Yeosu, has a capacity of 2.1 million barrels a day. In 2013, however, Oil and Gas Journal reported that less than 25% of that was being utilized. Production has continued to drop, going from 515,000 barrels a day in 2012 to 500,000 in 2013.

These low figures mean that producers want to get the most money possible for each barrel of the precious fossil fuel. The Los Angeles Times quoted ConocoPhillips as stating on the sale to South Korea, “We are entering into this transaction because during the trading period for this volume, bids from Asian customers were higher than bids from USWC customers.” Alaska may also be trying to undercut its giant neighbor to the east: Bloomberg reports that Alaska North Slope crude sold for $95.32 per barrel on September 29, 51 cents lower than Russia’s ESPO crude.

ESPO will likely continue to up the ante for TAP, though. This brilliant paper by Masumi Motomori (firewalled) on Japan’s need for Russian oil and gas, published in the peer-reviewed journal Energy Policy, suggests that ESPO will begin carrying oil from Gazprom’s Messoyakha project, located in the Arctic region of the Yamalo-Nenets Autonomous Okrug, in 2016. As will all oil and gas projects, and especially Russian ones, this prediction must be taken with a grain of salt, especially since there don’t seem to be many new updates regarding the project’s status. But if Messoyakha comes online and begins exporting oil through ESPO, the Hyundai and Daewoo cars on the streets of Seoul may be more likely to burn Russian Arctic oil than Alaskan Arctic oil unless ConocoPhilipps’ breakthrough sale becomes the rule rather than exception.

The Port of Yeosu

South Korea is therefore obtaining Arctic oil by both pipeline and tanker. The country’s Port of Yeosu fits into what arguably constitutes an expanded zone of Arctic destinational shipping. The Arctic Marine Shipping Assessment (PDF) defines destinational shipping as “conducted for community re-supply, marine tourism and moving natural resources out of the Arctic”.

Last year, one ship sailed from Ust-Luga, Russia, located on the Baltic Sea, with nearly 80,000 tons of naphtha via the Northern Sea Route to the Korean port. Located in Northeast Asia, Yeosu is strategically situated at the confluence point of the shipping lanes of the Northern Sea Route and the North Pacific Great Circle Route, which connects East Asia with the Pacific Northwest [2].

It’s also possible that Yeosu could one day obtain more than just oil from across the Pacific. In April, the U.S. Department of Energy granted ExxonMobil a two-year license to export LNG from the Kenai Peninsula. As with oil exports, Alaska will have to compete with up-and-coming nearby LNG providers, as numerous liquefaction terminals in British Columbia and Oregon are planned. All of these new sources combined with the expansion of Russia’s Sakhalin II LNG project mean that Asia could benefit from reduced oil and gas prices – but this will come at the expense of the Arctic and sub-Arctic environments.

Landsat 8 image of the Port of Yeosu on September 28, 2014. Oil storage tanks circled.

Landsat 8 image of the Port of Yeosu on September 28, 2014. Oil storage tanks circled; this is where Alaska Arctic oil will be stored.

Further Reading

[1] “How much oil is produced in Alaska and where does it go?” U.S. Energy Information Administration.

[2] I discuss the importance of these two shipping routes in a paper published in Eurasian Geography and Economics (2014) called “North by Northeast: Toward an Asian-Arctic Region.” It is available for free download this month here.