Can the Arctic Lead the Way to a Post-Petroleum Future?

The Arctic is often depicted as a region of vast petroleum resources — a wealth ready to be exploited to ensure national energy security and regional economic development. But could the Arctic also be a model for societies and economies moving toward a sustainable energy future? 

The reports about an exceptionally warm Arctic seem to come every day this winter, where temperatures during warm episodes have reached more than 20 degrees Celsius above normal, stunning and perplexing the scientists who are studying the region’s climate. Meanwhile, the political attention to addressing the root cause of these changes seems to falter. In the United States in particular, national interests in extracting all available hydrocarbon resources are again on top of the agenda after a brief interlude based on Obama’s attention to the far-reaching local and global security implications of climate change. The interest in Arctic oil and gas is by no way unique to the United States, however. In Russia, the first shipment of LGN from the Yamal Peninsula is expected in October[1] and recently in Norwegian part of the Barents Sea, the Swedish company Lundin Petroleum just announced a newly discovered oil and gas field.[2] For Norway, petroleum is still a major aspect of developing its High North and in January three new exploration licenses were issued for the Barents Sea. The only counterforce to this petroleum-laden Arctic future may be the low market price of oil and stiff competition from petroleum resources that are cheaper to exploit.

But beyond the expectations that a fossil-fuel economy will continue to bring jobs and wealth are longer trends that point in a different direction. They include increasing awareness of the far-reaching implications of climate change impacts, especially among planners and other professionals who need to think strategically about the future. They also include the falling prices of renewable energy and the fact that renewables now account for an increasing share of the global energy market. In some applications, fossil fuels are already being outcompeted and this trend is likely to expand as technical systems and markets develop. When fossil solutions no longer make economic sense, the communities and countries that now depend on income from petroleum production are likely face a challenging transition, unless they start planning now for a future when incomes from fossil fuel production cannot be taken for granted. The parallel with coal mining communities that have failed to transition to a different economic base is all too apparent. Even if there are political and financial barriers for the necessary decarbonization of the economy, there is also increasing awareness about the risks related to “stranded assets” for long-term investments in fossil fuel production.[3]

Dinosaurs flourished and dominated the fauna of this planet for over a hundred million years but disappeared during a geologically short time span because they were not able to adapt quickly enough to new environmental conditions. Humans have the advantage of a capacity to think about and plan for the future and it is time to start thinking more strategically about what a post-petroleum future may look like for those who now depend on jobs as income from this industry. The transition is both necessary and eventually inevitable. It is the pace of the transition that is still up for negotiation, not the direction.[4] These negotiations are not only governed by national political decisions about climate and energy or by international negotiations. Their outcome will to a larger degree depend on the choices that individual people, businesses, and planners make every day about costs and benefits of different solutions for meeting their specific needs.

Recognizing this direction has major implications for any region where petroleum production is part of the economy, including the Arctic with Alaska and the Russian and Norwegian Arctic in particular. The most important is to start envisioning a future beyond petroleum. What do different scenarios of change look like and what implication do they have at the local, national, and international levels?  What actions can be taken now that would ease the transition and which decision might make a transition more challenging?

Looking toward the future highlights the fact that the question of sustainable development is about much more than protecting the environment for its own sake — It is about the creating the future base for viable communities. We need to consider how decisions made today can enable a good life for the next generation and thereafter, when income from petroleum production will dwindle or cease at the same time as costs investments to meet the impacts of climate change are likely to rise.

While scientists continue to highlight the transition of the Arctic into a new climatic era and politicians focus on at what pace we should cut emissions of greenhouse gases, the issues of local sustainability easily gets lost. But the opportunity is there. In the best of worlds, Arctic countries and communities could take a lead in planning for a transition toward a post-petroleum future. Many of the resources are in place, including established arenas for international cooperation that would facilitate sharing of knowledge and experiences. Recent years have indicated a political will for testing local alternative energy solutions to deal with a situation where many communities currently depend on expensive and dirty solutions for their energy needs. The question is if the Arctic countries together can muster the political will and agreement to smooth the transition toward a necessary phase-out of petroleum production in the region in a way that can inspire actors in other parts of the world who are trapped in the fossil fuel economy.