George Kerevan: Why Scotland must not miss the High North boat

Published on Wednesday 22 September 2010 15:12

CONSIDER three recent events, each highly significant for Scotland's economic and political future. At the start of the week, Cairn Energy, the Edinburgh oil company, announced it had struck petroleum in the deep, untapped waters between Greenland and Canada.

Cairn is the only producer currently granted permission to explore in this virgin region. It is the first hard evidence that the Arctic is about to become the new energy frontier and Scotland is doing the finding.

The second historic event took place last week when the Nordic Barents, a Danish cargo ship, made a successful voyage through the melting waters of the Northwest Passage carrying iron ore from Norway to China. The Nordic Barents is not the first ship to pass through but it is the first foreign-registered vessel Russia has allowed to make the voyage between two non-Russian ports. The Northwest Passage is now a commercial reality. Within a generation the focus of global maritime transport will switch to the seas just north of Scotland.

The third event is going in Moscow at this very moment - an international conference aimed a divvying up the Arctic and its mineral riches. Represented are Russia, Norway, Canada, Denmark and America, each of which has laid claim to territory in the region.

There is a lot at stake. The United States Geological Survey estimates that the Arctic seabed could contain 20 per cent of the world's oil and gas reserves. Britain has not been invited to the Moscow conference. In the UK, we are rushing through a strategic defence review aimed to save money. You can bet that neither the Ministry of Defence nor the Treasury will consider the changing strategic realities to our immediate north.

The Moscow conference is not simply a talking shop. The potential riches in the Arctic have already raised tensions in the area. Borders and mineral rights are sharply disputed even between allies. Canada and America have a longstanding disagreement about their sea border north of Alaska.

Unlike Antarctica, which since 1959 has been internationalised under a UN treaty, ownership of the Arctic is unresolved. Under the UN Convention on the Law of the Sea, coastal nations can claim exclusive rights to exploit the seabed for 200 miles beyond their continental shelf. Theoretically, that should leave much of the icy sea surrounding the North Pole a common zone open to exploitation by private companies. But early in the 20th century, Canada and Russia claimed all the territory from their coast to the North Pole itself, treating the Arctic icecap as if it was land.Other nations, including the US, objected but then followed suit.

Now that the ice is melting, matters have got more complicated, not less. Moscow is claiming that the underwater Lomonosov and Mendeleyev ridges, which stretch towards the North Pole, are a continuation of its continental shelf. Recognition of this claim would increase Russia's exclusive economic zone by 1.2 million square kilometres.

In 2006, an American oil company announced it intended to explore for oil in this area, arguing it was legally a common zone. Moscow retaliated by sending a submarine to the seabed beneath the North Pole and planting a Russian flag made of titanium.

A mini Cold War broke out in the area, which suddenly acquired a new name suitable for an Alistair MacLean novel - the High North. Russia sent Bear bombers to probe Scottish airspace - fortunately there were still Tornado fighters at Scottish RAF bases to meet them.

Nato held a major exercise in northern Norway, including troops from ostensibly neutral Sweden and Finland. They played out a scenario in which a hostile power called "Northland" seized offshore oilfields.

The good news is that Arctic relations seem to have thawed this year. This week's Moscow conference is designed to achieve an amicable settlement all round.

However, tensions remain. Russia, Canada, Denmark, and Norway want to divide up the High North between them. America, which does not recognise the Law of the Sea, wants to declare the Arctic a common zone, relying on its technology and economic muscle to do exploit the area. This is a story that will run.

Where stands Britain when it comes to the High North?

Nowhere, militarily. There is practically no conventional naval warfare presence left in Scotland, which accounts for half of Britain's coast. The defence review is likely to close the RAF's Scottish airfields, so any passing Bear bomber can do what it likes. If the "Northland" enemy ever seizes one of Cairn Energy's oil platforms, the firm had better have a phone number for the Norwegian military.

Yet the future of the High North is of great importance to Scotland. Given our proximity and oil industry, Scotland's interest lies in the Arctic becoming a common economic zone. The opening of the Northwest Passage could also revive the old 1970s Oceanspan concept, with Scottish ports serving as the European end of a new global maritime trading system.

The nations bordering the High North co-ordinate via a body called the Arctic Council. Greenland and the Faroe Islands, though they have devolved administrations, are represented on the Arctic Council in the guise of Denmark. The UK has observer status but makes little of it. There is no reason why the Scottish Government should not have greater direct access to the Council, either as an observer or as the official UK representative.

This is not Holyrood grandstanding.Earlier this year, Canada used the Arctic Council to attack the Greenland administration for allowing Cairn Energy to drill for oil. No-one representing Scotland was at the meeting. If the UK government is blind to strategic developments in the High North that is no reason why Scotland should be. It's too close to home.