V. Putin, the President of the Russian Federation, said the Arctic development is one of the country’s strategic initiatives. The Arctic has substantial oil hydrocarbon reserves that are yet to be explored, according to S. Donskoy, the Minister of Natural Resources and Environment of the Russian Federation. All-out Arctic development should be environmentally friendly. Tourism is seen as one of the means of the region development. Increase in the number of tourists visiting the Arctic means that tourism could potentially become one of the driving forces for the Arctic Circle development.
Federal media covered the following Arctic agenda events last week:
V. Putin, the President of the Russian Federation, announcing the need for engineering capabilities that will provide for, among other things, the Arctic development, at a Presidential Council for Culture and Education of the Russian Federation meeting;
The Arctic Days in Moscow Forum being held and S. Donskoy, the Minister of Natural Resources and Environment of the Russian Federation, announcing that 91% and 53% of the Arctic offshore and land hydrocarbon reserves respectively are undiscovered;
The President of the USA deciding to suspend issuance of licenses for geologic exploration and development of the Arctic shelf for 5 years.
Engineering capabilities for Arctic development
The Arctic Days in Moscow Forum was the last week’s highlight. Media outlets coverage of the event included an array of in-depth publications on the Arctic’s economic and resource potential, among other things. A Presidential Council for Culture and Education of the Russian Federation meeting was held at the same time. The Arctic development is crucial for the country and demands powerful engineering capabilities, according to an announcement made by V. Putin, the President of the Russian Federation, at the meeting. Creation of such capabilities is a permanent topic of the field-oriented agenda for media outlets. The Town of Viborg Shipyard launched the Aleksandr Sannikov ice-class vessel meant for escorting tankers shipping oil recovered from the Novoportovskoe field, Yamal-Nenets Autonomous District, according to last week’s media reports. The Novatek Company announced that Arctic LNG-2, its new plant, will be built on gravity-platforms during presentation of the project at the Forum. The Kola Shipyard will build the platforms.
Arctic oil-and-gas reserves
Media outlets paid the most attention to a report made by S. Donskoy, the Minister of Natural Resources and Environment of the Russian Federation, when covering the Forum. There are 585 million tons and 10.4 billion m3 of offshore oil and gas respectively in the Arctic, according to the report. 91% and 53% of the Arctic offshore and land hydrocarbon reserves respectively are undiscovered, according to the Minister’s estimates. Oil-and-gas projects are generally seen as a driving force for the region development. There is potential for recovery of others mineral resources at the shelf, too. Non-ferrous metals mining and biological resources development are among potential candidates. The Arctic development should be a public-private project, some say. There are such projects already; the Yamal LNG Plant and Sabetta Seaport may serve as examples.
Environmental approach to Arctic development
The Arctic development is an ambitions task for the country. The way it is handed should be environmentally friendly, too. The region’s environment should be preserved. It is especially important in view of the region warming up. Scientists are very concerned about the trend. Temperature in some regions of the Russian part of the Arctic is substantially higher than normal, according to reports. Islands disappear due to the Arctic Ocean ice-cap shrinkage. The Arctic warming up can result in emission of immense methane reserves currently trapped underneath the Arctic shelf. Such an emission would have a devastating impact on the planet. Scientists are very interested in the Arctic climate changes. Russian oil-and-gas companies support such scientists. Rosneft opened its first scientific support base that will operate on year-round basis on the Khara-Tumus Peninsula shore, Khatanga Gulf, Laptev Sea, according to media outlets. Moreover, the program for industrial waste clean-up of the Franz Josef Land Archipelago islands will be continued next year. The public contract for the program will amount to about 700 million rubles.
USA suspends shelf development
The Executive Office of the President of the United States deciding to suspend issuance of licenses for geologic exploration and development of the shelfs of the Chukchi and Beaufort Seas and Cook Inlet for 5 years is seen as it succumbing to environmentalists’ demands. The Republican Party of the USA was outraged with the news, according to reports. However, no one conducts oil exploration in the US part of the shelf due to unfavorable market environment, according to analytics. Investors will become interested in the Arctic once more in 5 years at the soonest, they say.
Future of Arctic tourism
The Federation Council of the Russian Federation objected to a bill for the Arctic social and economic development prepared by the Ministry of Economic Development of the Russian Federation. Media outlets did not specify what exactly it did not like about it. The only thing known is that the bill does not factor social and environmental aspects in and will now be refined with regard to the Council’s comments. It will most likely take a lot of time. Tourism could potentially become one of the driving forces for the Arctic regions development. This season’s tourist flow went up by 50%. It is worth mentioning the increase is thanks to domestic tourists, not foreign ones.
However, this refers to the number of tourists who visited the City of Arkhangelsk, Solovetsky Islands, and Yamal – not the Russian Arctic National Park. It was foreigners who visited the Park, for the most part. I. Orlov, the Arkhangelsk Region governor, thinks the Park attendance may grow up from current 1 200 to 7 000 visitors a year in 2 years nonetheless. At the same time, A. Kirillov, the Park Head, thinks that while there is definite increase in the number of visitors the park is still held back by underdeveloped infrastructure and low buying capacity of Russian citizens.