Ice, shrimps and oil worth billions

BY JESPER LØVENBALK HANSEN

The hunt for oil has started on the world’s largest and perhaps richest island. A self-governing Greenland will manage its own oil resources.

The price of a barrel of oil has just passed USD 130 and leading economists forecast that before too long it will top USD 200. It is the natural reaction to global uncertainty, increasing demand and decreasing oil production.

It is also the reason why oil companies like Exxon and Chevron are now turning their gaze north of the Polar circle. An ongoing appraisal from USGS indicates that a very significant part of the planet’s undiscovered oil deposits can be found here, and a good deal of the oil and gas may be sitting around Greenland.

“With steadily high oil prices, the relatively short distance to the markets in Europe and North America, and political instability and insecurity in many areas such as the Middle East, Africa, Venezuela, Bolivia and the Caucasus, where there are large oil reserves, the oil industry is currently focusing on exploration in the Arctic and not least Greenland, where there is political stability,” says Vice director Flemming Getreuer Christiansen of the Geological Survey of Denmark and Greenland.

Although there is still great uncertainty regarding the amount of oil in Greenland, fairly high figures are being mentioned. Based on reasonably safe data, the area of Northeast Greenland alone is estimated to have undiscovered oil and gas resources of 31 billion barrels of oil equivalent, which roughly corresponds to the world’s total consumption in a year.

In addition there are the West Greenland basins where six international oil companies already have concessions, together with the Greenland Home Rule Government’s oil company, NUNAOIL.

THE ROAD TO SELF-GOVERNMENT
Danish-Norwegian missionary Hans Egede arrived in Greenland in 1721. His aim was to find descendants of the Norse population that had settled around 1000 B.C., but had not been heard from for the past 200 years. Finding no trace of the Norse – the disappearance of that culture remains a conundrum to historians – Egede instead devoted himself to mission among the Inuit. This was the beginning of the colonial era in Greenland that lasted until 1953, when the island became an integrated part of Denmark, partially in response to UN decolonisation measures. An elected advisory body, the Landsråd, had been in place since 1911 and had, for all practical purposes, governed Greenland without outside influence during WW II, when connections between Greenland and Denmark were disrupted by the war .

Greenland is a geographically wellplaced bastion for national fishery of especially shrimps and halibut, which is still the island’s chief industry. Greenland’s location was of great geostrategic interest during WW II and the Cold War, and Greenland still hosts the USAF base at Thule.

In 1979, Greenland voted for home rule, and in May this year another important milestone was reached. A Danish-Greenlandic parliamentarian commission concluded more than four years of negotiations concerning Greenland’s future and status. The commission tabled a report which proposes extended self-government within the framework of the Danish constitution. The proposal includes provisions for the economic development of Greenland and states that future dividends from the exploitation of natural resources shall belong to Greenland Former Danish Minister for Justice, Frank Jensen, explains why Denmark has chosen to forgo potentially enormous oil revenues. For four years he has chaired the subcommittee on business and economic affairs of the Danish-Greenlandic committee, which has focused on Greenland’s oil.

The Greenlandic flag is called Erfalasorput, which means our flag. It symbolises the sun rising over the ice and the return of warmth by midsummer. Photo: Paul Sourders, Corbis

“In order to comprehend the Danish position, you have to understand the community which Denmark and Greenland have constituted for almost 300 years. Since decolonisation in 1953, Denmark has encouraged an administrative and financially selfsupporting Greenland,” explains the former Minister for Justice, who emphasises that Greenland may also detach itself entirely from the Kingdom of Denmark, should it so wish..

“The Greenlanders themselves decide over their resources. So our message is that even if the oil suddenly spouts up in a great gush, the Greenlanders do not have to detach themselves. It should not be because of a disagreement concerning oil that we end our kinship with Greenland. And this is what the new agreement between Denmark and Greenland guarantees” says Frank Jensen.

Juliane Henningsen, Greenlandic member of the Danish Parliament, belongs to the generation which will bring Greenland towards economic independence and possibly a final secession from Denmark. Photo: Per Gudmann

GREENLAND The name of Greenland in Greenlandic is ’Kalaallit Nunaat’ – land of the Greenlanders. Greenland has a mountainous terrain and is the largest island in the world with an area of 2,166,086 km2, of which 410,449 km2 is icefree. Greenland has a population of 56,854 (January 2004), its inhabitants either living in towns or in settlements in icefree coastal areas. The majority of the population lives in western Greenland. The capital of Greenland is Nuuk with a population of 14,272. Greenland’s only traffic signals and roundabouts are here. None of Greenland’s towns are interconnected with roads. There are two ways to travel long distances: by air or by ship. Geographically, Greenland is part of the North American continent. Geopolitically, the country is part of Europe and nationally, a part of the kingdom of Denmark. North America is Greenland’s closest neighbour – separated by a strait only 26 kilometres wide. From Greenland’s most northerly point there are about 700 kilometres to the North Pole. Greenland has been inhabited by small groups of people who migrated at various periods over the sea ice from northern Canada, the first time around 2,500 BC. The majority of the Greenlandic population are descended from the Inuit and are closely connected with the Inuit in Canada, Alaska and Siberia. The Greenlandic language is closely related to the Inuit language in Canada and Alaska. Greenlandic is the official language of the country. 85% of the country is covered by inland ice, which rises up to 3,000 metres above sea level. The inland ice was crossed for the first time in 1888 – on skis. The most active glacier in the northern hemisphere is at Ilulissat. It produces 20-25 billion tons of ice annually. Some of the largest icebergs are seen in Ilulissat, and these can tower 100 meters above the sea (and only 10-15% of icebergs are visible above the water line). The icebergs are taken north by the current, and then south. Many of them do not melt until they reach the same latitude as New York. Greenland’s national dish is boiled seal meat with rice and onions (’suaasat’ in Greenlandic). A special delicacy is raw whale skin with a thin layer of blubber (’mattak’ in Greenlandic). Experience Greenland. Read more at: http://www.greenland.com/content/english/tourist Follow the hunt for the Greenlandic oil: http://www.nunaoil.gl

ECONOMIC SAFETY
Frank Jensen opines that the self-government forms an excellent basis for Greenland’s future development, since it gives Greenland the opportunity to take much greater responsibility for its own policies, while the Danish state maintains a safety net under the Greenlandic economy. Greenland Home Rule receives DKK 3.2 billion annually in financial support from Denmark.

“The agreement gives Greenland continued safety in the transition to self-government, because we are continuing to provide financial support to Greenland at the current level,” says Frank Jensen.

And he is not alone in this view. The agreement is supported by a broad majority in the Danish Parliament, who think the most important objective is that Greenland becomes economically self-sufficient, with as little pain as possible.

Juliane Henningsen is a Greenlandic politician, who at the tender age of 23 is one of the youngest members of the Danish Parliament.

She belongs to a generation that is eager to bring Greenland towards economic independence as a basis for extended self-government.

She is also satisfied with the home rule agreement, which she calls “a good compromise.”

“Naturally the Greenlandic people have always been aware that they have their own culture and language. And I think that the development in the relationship between Denmark and Greenland shows that the Danish people and Danish politicians have also realised that we are not just a county of Denmark, but a distinct nation. I think it is very important to bear in mind that since the home rule agreement in 1979 we have seen good progress in the relationship between Greenland and Denmark as equal partners,” says Juliane Henningsen of the leftwing Greenlandic party, Inuit Ataqatigiit.

SECESSION?
Although Juliane Henningsen declines to give an opinion on the timeframe, she is certain that Greenland will one day gain independence.

In November, Greenlanders will vote on the selfgoverment agreement. And Juliane Henningsen is certain they will vote in favour.

“Two of Greenland’s political parties, representing two thirds of the population, recommend a yes vote,” she says.

With that, Greenland is taking yet another important step into the future. And a future that will perhaps see Greenland becoming the emirates of the Arctic. If the current projections hold true, oil worth a minimum USD 5 trillion awaits a Greenlandic population of little more than 57,000 people. -

“I think it’s natural that a people should want self-government. And in line with our economic capability we want to take more responsibility for our own development. But I cannot predict the time for a secession, since how Greenland will develop over time cannot be known with certainty. It is a question involving our fishing industry, oil and political developments in Greenland,” says Juliane Henningsen.