Scramble to unlock Arctic's energy potential

With huge natural resources under its melting ice pack, the Arctic has moved into the front line in the scramble for new energy supplies. Addressing the World Economic Forum in Davos, Switzerland, analysts and key industry figures argued that unlocking the region's potential could help ease global concerns over assured energy supplies. But difficult questions remain about the impact on the environment and the fraught subject of exactly who owns what, with up to eight countries claiming some interest in the Arctic and others racing to catch up.

"It will never replace the Middle East" as an oil source, said Helge Lund, head of Norway's Statoil energy group, but "it has the potential to be a good supplement." Lund said the Arctic may account for as much as 25% of undiscovered oil and gas resources worldwide, the equivalent of 375 billion barrels. Analysts say the Arctic is highly attractive because it is closer to Europe and the United States, reducing transportation costs, and offers the prospect of more stability and supply security than the volatile Middle East. Moreover, global warming has reduced Arctic sea ice - which last year was the lowest on record - and opened the way for increased marine transport and access to natural resources.

Eight nations - Canada, Denmark (via Greenland), Finland, Iceland, Norway, Sweden, Russia and the United States - have Arctic interests. Of those, all bar Sweden and Finland enjoy Arctic coastlines, and border and sovereignty disputes, such as between Russia and Norway, Russia and the United States and the United States and Canada, are hampering cooperation.

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