Significances of discovery of oil in the Arctic

20. What are the economic significances of discovery of oil in the Arctic sea and its possible environmental consequences?

        It has been long believed that the Arctic sea comprises one of the largest oil reserves. However, the extreme cold and unfavorable conditions had prevented any concrete exploration plans . Now, due to increased ice melt (due to global warming ) this region has become accessible arousing economic interest rather than alarm over the ice melt . A USGS (United State Geological Survey ) brought out an estimate that the Arctic might contain 30% of the world’s undiscovered Natural gas reserves and 12% oil reserves. Activists have raised banner against the exploration citing environmental concerns.

        Arctic region is one of the most fragile ecosystem. Subsistence lifestyle and frugal way of life is key to survival in the extreme cold with scarce resources. This region is home to flora and fauna adapted to this unique habitat.

Economic Significance of discovery of oil:

• Cheap oil availability in abundance.
• Decreased reliance on Middle East region (Gulf nations), There by altering the geo-political and economic relationship among the global community.
• Increased growth potential for the world due to cheaper energy .
• Increased investment expenditure and job creation by means of new drilling of oil wells and establishment of necessary backward and forward linkages.
• Boost to economic growth and prosperity from oil revenue.
• With new infrastructure, the commercial fishing industry would also develop faster in this region.
• Boost to domestic and global economy and positive spill over on the other sectors of the economy adding to the GDP.
• The offshore nature of these reserves makes exploration easier and cheaper, though climate is a huge challenge.    

Possible environmental consequences :

1. Increased Global warming : The permafrost in this region are carbon sinks . Green House gasses trapped within them are potent when released by drilling can accelerate global warming.

2. Increased carbon emission by drilling in a fragile ecosystem can misbalance the ecology.

3. Risk of oil spill and inability to clean up. The cold and inaccessible nature of the region make responding to disasters in the region extremely difficult. Moreover, lack of sunlight means slow rate of degradation and prolonged effect of any incident/accident.

4. Disruption in the ecosystem can adversely affect the vulnerable flora and fauna of this region.

5. Increased ice melt due to drilling

6. Pollution by drilling can impact life forms in the region.

7. Possibility of commercial fishing disrupting the fragile ecosystem.

    Other fears include a renewed cold war due to global competition in the Arctic. Nations while indulging in the Arctic rush shall do well to remember the basic law of ecology that one cannot change one thing in nature and that everything is connected with everything else.