A new gold rush

For Greenland, global warming spells an era of booming growth

A new gold rush“Cucumbers, lettuce, radish, turnips,” says Buuti Pedersen, ticking off the grown-in-Greenland veggies now available at local supermarkets. For two years, stores have also been stocking home-grown broccoli and potatoes—“bigger, fresher and tastier” than those shipped from Denmark, says the 54-year-old artist, who lives on Ammassalik Island in Greenland’s remote southeast. Since summer now comes earlier and stays longer, Arctic wildflowers have become more abundant, sheep have been birthing fatter lambs (and more of them) and cod, which prefer warmer waters, have started appearing off the coast of Greenland—the fastest-warming place on the planet.

While the rest of the world agonizes over climate change, warming is triggering grand dreams on the scantly populated hunk of ice. The polar island, whose capital, Nuuk, barely reaches a population of 15,000, is profoundly rich in mineral wealth—some of it buried deep in ice. Yet, if Arctic waters become free of ice by 2012, as NASA climate scientist Jay Zwally has suggested, there could be a Greenlandic gold rush. Strange as it sounds, some say Greenland could become a vital mining, oil and shipping centre later this century.

Self-governance, which Greenland acquired in June, has granted the island more rights and “elbow room” from Denmark, says Mininnguaq Kleist, head of Greenland’s self-governance office, reached in Paris. With it, Nuuk takes control of policing and schools, Greenlandic becomes the official language, and Greenlanders are recognized as legally separate people from Danes, according to international law. Perhaps more crucially, the new agreement grants Greenland half of any future proceeds from oil and minerals.

Two years ago, the U.S. Geological Survey estimated that an area off Greenland’s northeast coast could yield 31.4 billion barrels of oil and gas worth more than $US2 trillion. If it materializes, northeast Greenland would become the world’s 19th-largest oil and gas reserve. Smaller fields west of Nuuk have reserves ranging from 400 million to 1.2 billion barrels. (A recent USGS study, released as Canada and its polar neighbours aggressively pursue competing claims to the continental shelf under the Arctic Ocean, says the Arctic contains 13 per cent of the world’s remaining undiscovered oil—80 billion barrels of crude—and as much as 30 per cent of its remaining natural gas deposits.) ExxonMobil, Chevron, Husky, Statoil, Dong Energy of Denmark and Canada’s EnCana Corporation have been awarded licences to prospect 137,000 sq. km off Greenland—a venture made easier by the rapidly thinning ice.

Since 2004, the overall volume of Arctic sea ice has declined by 40 per cent, according to NASA data. Three years ago, two top scientists shocked the climate community by predicting that the Arctic sea could be ice-free by the summer of 2040 (not long ago, scientists estimated this would occur at the end of the century). All over Greenland—whose melting ice sheet is the single biggest contributor to global sea-level rise—glaciers have doubled and tripled their speeds. The Petermann glacier, the Arctic’s biggest glacier, is on the verge of losing an ice shelf the size of Manhattan. In recent years, the Jakobshavn glacier has already retreated more than in the last 4,000 to 6,000 years. “We’re seeing things that people had previously thought were impossible,” says glaciologist Martin Truffer of the University of Alaska at Fairbanks.

For the first time, this summer both the deepwater routes of the Northwest Passage and the Northeast Passage over Russia were free of ice. In anticipation of its eventual opening, Greenland, which has an extensive marine infrastructure, is positioning itself as a major shipping centre. Massive increases in glacial runoff are bringing new opportunities in fresh water exports and a burgeoning hydro-power industry. Cheap, abundant energy has already attracted Alcoa: the U.S. aluminum giant is awaiting approval to build a $4-billion smelter plant in Maniitsoq (it has reportedly offered Nuuk a stake of between 10 and 50 per cent). Being at the centre of the global climate-change drama, meanwhile, has been a boon to tourism.

At the same time, warming heralds colossal threats: Greenland’s very cultural identity is vulnerable. In the past decade the number of traditional hunters dropped from 8,000 to 2,000, a worrisome figure for a country of barely 57,000. Still, there is “no future” in the status quo, says Kleist: the Greenlandic economy remains dependent on handouts from Copenhagen (last year, Denmark injected US$700 million, roughly 60 per cent of government revenues). Yet, if oil revenues exceed US$1 billion, the island will have practically bought its full independence, he says.

“For a long time, we have been an outpost of the world—very isolated,” he adds. “Slowly, however, we are becoming a hot spot.”




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A new gold rush

  1. I often wonder if Canada missed an opportunity to purchase Greenland from Denmark a century ago.

  2. I often wonder why people bother reading Macleans, what a rag.

  3. IF, IF, IF..
    As my GrandPa used to say,
    "Wish in one hand, and spit in the other and see which gets full first."
    Having Oil down there, and getting it up here are two different things.
    Having Gold below the ice and getting it out of the ground above the artic circle are two different things. High development costs, High initial costs, and then, maybe, you finally break even and maybe see a profit.

  4. happy for these people who rarely make any noise and are die hard independent and self sufficient !

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