Chilling threat to efforts to bring Russia in from the cold

Published on Sunday 7 February 2010 21:55

SHALE gas. Two small words that could transform the world. According to Tony Hayward, BP's chief executive at the World Economic Forum in Davos, a "game-changing technology" has arrived which "transforms the US energy outlook for the next 100 years".

American companies have discovered how to exploit new reserves of gas and coal by breaking up rock formations with a mixture of water, sand and chemicals in a process called hydraulic fracturing.

The US has become self-sufficient in gas almost overnight, causing Russia to dump surplus gas on the European market, prices to collapse and politicians of the shale-rich Ukraine to defy Putin over election interference.

And shale gas has the power to end or shrink the prospect of a northern Saudi Arabia in the frozen Barents where the Russians have announced a two-year delay on exploration of the Shtokman Field off Murmansk. With the extra costs of working 500km offshore, in Arctic conditions and six months of semi-darkness, extracting the Barents' estimated 20 per cent of world "conventional" gas supplies was never going to be easy.

Now, it may be uneconomical for months, years or forever.

China, India, Australia, America and central Europe all have shale deposits, and if they can deploy the American technology, they'll have as little need for liquefied natural gas (LNG) as the US.

Shale gas could change the power map – especially in the world's most remote communities.

Here in Arctic Kirkenes in Norway, just 14km from the Russian border, a vibrant community has existed for centuries based on fishing, Sami reindeer herding and mining iron ore. The strongly unionised workforce was sympathetic to communism long before the Red Army liberated the tiny town from German occupation in 1944. Every home, building and farm in Finnmark was razed to the ground as the Germans retreated.

So Kirkenes celebrates the date of the Red Army invasion every year – and although Finnmark housed more weapons during the Cold War than anywhere else on earth, locals never allowed the "ice curtain" to close completely.

In 1959, a boat containing four Norwegian men set sail from the nearby fishing village of Vardoe heading for the forbidden Russian port of Murmansk. Aboard were two wrestlers and two boxers – also members of the Vardoe orchestra. They were arrested and taken to Murmansk for questioning by the KGB. Why had they sailed openly into the Soviet Union? Their answer surprised everyone – they just wanted to catch up with the neighbours. Sing songs, play tunes and compete in wrestling and boxing. Just like old times.

The Russian authorities were amazed but in the week that followed musical and sporting competitions were laid on before the Vardoe men were deported back to Norway.

But the ice curtain had thawed. Not by officialdom or shared industrial interest, but by curiosity, persistence and the desperate need for neighbours – Oslo is nearer Rome than its own Arctic border.

Other crossers followed. Willy Bangsund has been driving teams of young wrestlers on 12-hour round trips to compete in Murmansk for 30 years. He fundraised for Russians when they had nothing and persuaded locals to donate paint to revamp the depressing sports hall in Murmansk. Even though Willie's "day job" was caretaker of Kirkenes' Mountain Hall – a bunker excavated to create an underground venue to house villagers during Russian nuclear attack.

Now Willy's hall is the main concert venue for the Barents Spektakel – the world's northernmost arts festival which took place this weekend.

For the seventh year, hundreds of performers, politicians, dancers, wrestlers, ice hockey players, artists and singers gathered for an arts event with a clear foreign policy objective – to link fortunes and nations by reconnecting the Arctic Norwegian and Russian peoples across the Great Divide.

The next step is to relax the border crossing itself. Hopes are high that in April a new border zone will be created allowing visa-free local travel for people living 30km from the border on either side – a small but revolutionary move.

Currently Norwegians have to "import" their cars to drive over and Russians must itemise every item of their belongings … after they've made a ten-hour round trip twice to submit and collect their expensive visa from distant Murmansk.

But this progress has been prompted by gas. If Shtokman is mothballed or delayed, will co-operation continue and will the Norwegian government continue to fund its enlightened but expensive High North strategy?

The rest of Europe has to hope that it does. Norway's foreign policy is to cross the bridge built by local musicians, artists, nomadic Sami herdsman and sportsmen to gently coax the Russians in from the cold to help create an attractive, connected, cross-border Arctic society.

Even if there is no gas bonanza there is still huge potential here. The Kirkenes-based Barents Secretariat has proposed the region could develop like a dispersed city, with each community specialising not competing against Arctic neighbours. One idea is for city functions – cinema, ballet, Ikea, legal advice – to arrive on a regular basis aboard the Hurtigruten ships which ply the Norwegian coastline from Kirkenes to Bergen. There are plans to build a Kirkenes sports academy which would also educate gifted athletes from Russia. It would be criminal if these plans were abandoned now.

Does the world really need another Saudi Arabia or does it need a new way to co-operate across old divides? Prime minister Jens Stoltenberg recently made the candid observation that Norwegians had plenty to live off but not much to live for. Gas reserves may come and go. But the border crossers of Kirkenes are offering the world's richest nation what it most needs – the challenge of building a dynamic Arctic society from two worlds that have stopped drifting apart.