Lesley Riddoch: Oilfield discovery tests reserves of friendship

LIFE IN the world's northernmost university town seems good. The long Arctic nights in Tromso are shortening, massive snow drifts are shrinking, the credit crunch shows no visible signs of biting and the north Norwegian town of 70,000 inhabitants is facing a prosperous future thanks to the discovery of huge oil and gas reserves in the Norwegian, Kara and Barents seas.

A great possibility or a massive threat? Only one organisation is sure of the answer.

The Norwegian environmental group Bellona has published plans by Russian scientists to use nuclear-powered underwater drill ships, as well as nuclear icebreakers, to extract Russia's majority portion of the vast newly-found reserves. This isn't science fiction – extracting oil from the wild Arctic waters will make a Moon landing look easy.

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Some 250 miles offshore, the Russian's massive Shtokman Field cannot be reached by helicopter from continental bases. With water depths of 600m, installing a platform in stormy seas will be difficult. Freezing winds create temperatures as low as -50C, yet onshore operations can be performed only during the six months of pitch-dark winter. In the summer, the upper crust of permafrost melts, machinery sinks and helicopters become the only viable means of transport. Not even the oil industry can contemplate the costs of using helicopters on a daily basis – or dealing with huge ice floes.

Alexander Frolov, deputy head of Russian state weather forecaster Rosgidromet, is sanguine. He says: "As the Arctic climate gets milder, the risks of huge iceberg formation and ice storms in the Barents Sea will grow significantly by 2015. The threat from ice formations of 100km long, the size of Jamaica, should not be underestimated."

Astonishingly, the Shtokman Development Company plans to address this challenge by using floating removable platforms, which can be moved around in case of "emergency situations". The eye-watering entry on its website reads: "The forerunning Shtokman concept is still a floating, disconnectable spar able to dodge roving icebergs of the two-million-tonne variety."

Mr Frolov has also suggested icebergs could be destroyed with bombs, though admitting that "might raise ecological concerns". Hence the move subsea.

Russian experts now believe the safest way to avoid icebergs is not building platforms, but operating underwater and laying pipelines in deep trenches (though the area is also littered with discarded Russian nuclear subs and has seismic movements). All of this leaves neighbouring Norway with a big moral dilemma.

If Russia extracts oil and gas from the Barents, Norwegian involvement might mitigate the worst impact. Chernobyl was only the most public of Russia's safety failures and its military (determined to find a peacetime role for the nuclear submarine fleet) still has more clout than its eco-warriors.

Meanwhile, the Norwegians have already acquired considerable technical subsea experience from their own Ormen Lange gasfield. Their Snovit development in Hammerfest is the world's most northerly liquified gas production centre. The bulk of Snovit is subsea.

If Norway and Russia become partners, the odds of safe and successful gas extraction rise – but they are still not good. The stakes are high. A new coral reef rivalling the Great Barrier Reef has been discovered near the Lofoten Islands, and though its extreme depth and hostile surroundings mean it will hardly become a mainstream tourist attraction, these Norwegian reefs help maintain world stocks of many fish species. Protein for a starving world or more oil and gas kroner? It's a tough call for a caring country – Norway is the world's biggest donor of third-world aid by population size.

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If Norway and other nations chose to boycott Shtokman – as Bellona insists they must – a credit-crunched Russia might find it hard to proceed alone. So should Norway engage? Public opinion in Tromso is mixed.

Norway's founding constitution recognised two indigenous peoples – the Norwegians and the Sami. The Sami adapted an ancient reindeer herding culture to satnav, snowmobiles and permanent homes, campaigning to preserve their "border-free" 100,000-strong nation with three languages and Sami parliament. The parliament's been quick to spot the possibility that Arctic oil could head south subsea, without any local benefit – though Sami traditions and livelihoods will be destroyed if anything goes wrong. They are trying to exert constitutional "indigenous rights" and demand royalties from a Nordic state that has always regarded oil revenues as a common good – to be shared equally among its current population (and future generations) wherever they live.

This claim hasn't endeared the Sami to their more populous northern Norwegians neighbours, who see them as "a state within a state" and believe they are trying to pull a fast one.

There's no agreement among Norwegian fishermen either. Some strongly oppose oil and gas exploration – others have watched fish landings moving south and think oil and gas work will become their future. Should Norway get involved with Russia and move beyond test drilling?

Fortunately, our closest Nordic neighbour has long proved capable of making big strategic decisions and trading naked self-interest for wider social goals. Norway's oil fund traded the prospect of immediate over-consumption for a future where grandchildren would be wealthy too. After the Second World War, Norway consciously traded individual super-wealth for a generous welfare state and the freedom to opt out of state provision (private schools are effectively illegal) for the best education in the world.

What Norway does next could affect everyone.

At least this heavy responsibility lies on the shoulders of a resolute, successful, independent-minded, wealthy nation of five million – not their biddable, anxious, credit-crunched neighbours across the North Sea.