Norway eyes oil era for Greenland

The Arctic nation of Greenland seems on the verge of an industrial revolution that’s involving controversial oil exploration and several Norwegian players. At stake are the conflicting fortunes of fishermen, and huge environmental risk.

State Secretary Erik Lahnstein of Norway's foreign ministry led a delegation to Greenland this autumn. He thinks Greenland can learn from Norway, while Norwegian officials are clearly interested in how Greenland's industrial era may develop. PHOTO: Utenriksdepartementet

A steady stream of Norwegian politicians and businessmen have been making their way to Greenland for months. State secretary Erik Lahnstein from the Norwegian Foreign Ministry was among the most recent to land in Greenland, while Foreign Minister Jonas Gahr Støre was there with a group of other powerful politicians, including Carl Bildt of Sweden and Hillary Clinton of the US, earlier this year.

They’re all keen on following Greenland’s path into what may be a new oil and gas era, along with ventures into mining and aluminum production. Not only are Norwegian politicians watching events closely, but so are Norwegian geologists and businessmen eyeing new opportunities.

Among them is Stig-Morten Knutsen, who formerly worked for Norsk Hydro and now works as exploration chief for Nunaoil, which could become Greenland’s version of Statoil. Newspaper Dagens Næringsliv (DN) reported that it has stakes in all the exploration blocks off Greenland and gathers all seismic examinations and drilling results. It’s charged with protecting the country’s technological and economic interests.

“This is good business for a geologist,” Knutsen told DN late last month. “Operating here presents enormous challenges for the oil companies,” he said referring to the harsh Arctic weather, the darkness of winter, the icebergs and strong currents in the area. Much of the drilling also takes place in deep water.

“But the companies clearly believe the gains can outweigh the costs,” he told DN.

Another Norwegian executive from Norway’s oil industry, Tor B Lund, is working for one of the oil companies involved off Greenland, Cairn Energy of Scotland. Lund also used to work for Hydro, most notably leading Hydro’s controversial venture into Libya. His bosses in Ediburgh didn’t want him to talk to DN but a company director likened Cairn’s involvement in Greenland to “a marathon, not a sprint.” Asked whether it was safe to drill for oil in the difficult Arctic waters, David Nisbet of Cairn countered: “Is it safe in Northern Norway? In the Barents? In Alaska? We’re at least drilling south of the Arctic Circle. It’s nothing different that what you’re doing in Norway.”

Norwegian Foreign Minister Jonas Gahr Støre was also in Greenland earlier this year, along with US Secretary of State Hillary Clinton and Swedish Foreign Minster Carl Bildt. PHOTO: Utenriksdepartementet

The concerns of local fishermen aren’t different either, nor those of environmental activists. More than 20 vessels were drilling for oil off Greenland last summer, even physically moving ice bergs and trying to keep them away from the oil rigs. It was enough to raise alarm from Professor Rick Steiner, formerly of the University of Alaska, who’s been researching Arctic oil operations for 30 years.

“No matter how secure we make exploration, there will always be a considerable risk for a major oil spill,” Steiner told DN. “People make mistakes. The question is not whether it will happen, but when.”

An accident can be catastrophic, since the strong currents would spread the oil. Setting fire to any spilled oil may help, but experts say it would take decades for the oil to break down because of extreme cold. The entire scenario seems outlandish when the world is allegedly concerned about climate change and global warming, and offers more evidence that official concern is backsliding.

Lahnstein (right) forging ties with Greenland's energy minister Ove Karl Berthelsen (center). At left, president of the Sami parliament, Egil Olli. PHOTO: Utenriksdepartementet

Greenland’s fishing industry is also alarmed. The isolated country has lived off hunting and fishing for centuries. Now the oil exploration and possible extraction despite many dry wells threaten fishing. “What will happen if there’s an accident?” Alfred Jacobsen, who exports Greenland seafood, queried. “We don’t know. And we’re not getting any good answers when we ask.”

Jørn Skov Nielsen, a top local bureaucrat who’s considered one of Greenland’s most powerful men, claims the oil and mining projects represent Greenland’s only possibility to become economically independent at last. The new industry can mean huge new value creation for Greenland, he says, and he denies he has too much power.

“We’re lagging behind,” Nielsen told DN. “Industry can create growth and narrow the gap between our expenses and our income.” He seems to welcome the companies showing interest in Greenland and now China is warming to Greenland as well. (external link)

‘We have experience…’
The lure of new oil resources and wealth is clearly what’s attracting people like Støre, Bildt and Clinton, as governments generally view a need for more oil. Lahnstein was also keen on forming bonds with Greenland’s prime minister, Kupik Kleist, and the equivalent of Greenland’s oil minister Ove Karl Berthelsen.

“We have some experience that can be of interest for them,” said Lahnstein, who led a Norwegian delegation to the island this autumn. He acknowledged, though, that Greenland is a “rich but vulnerable” society, with “enormous tension” between the traditional society and the possible new industrial era.

“The investment in minerals, industry that demands power and petroleum is so great that it must take place in a balanced way,” Lahnstein said. “We know from our own experience that some industries can undergo strong growth and downturns when cycles turn.” He urged the importance of “good processes and democratic anchors” to safeguard various interests.

That’s what concerns local players, who feel threatened by the foreign business interests and the few bureaucrats and politicians making decisions. While Nielsen doesn’t want Greenland to be left behind, those in the traditional fishing industry and in environmental groups are urging caution.

“Our young democracy isn’t managing this well enough,” Mikkel Myrup, volunteer leader of Greenland’s environmental organization with just 40 paying members, told DN. “There’s no broad public debate. No objective information. Power is concentrated in few hands. Low education levels make us dependent on the bureaucracy. This is problematic.”

Views and News from Norway/Nina Berglund

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  • Fireboatman

    One thing for sure, I would rather buy my oil from Norway and Greenland than from that paria in Venezuela and the middle east all because we have stupid congressmen that will not alow us to drill our own oil. We have a lot of prople out of work and the Democrats do not give a damn about them. The Democrats want everyone on the dole where they can control us.