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The North Pole has been known to hold great amount of oil, and many people have been anxious to get access to these reserves. It could be a real battle to get approved access considering the North Pole is not necessarily owns this piece of land. Sounds like there is going to be a bit of a battle ahead, and Paul Ausick agrees.

The US Geological Survey estimates that the Arctic holds about 90 billion barrels of oil, 1,700 trillion cubic feet of natural gas, and about 44 billion barrels of natural gas liquids.  The retreating sea ice is making it possible to think about extracting some of these riches.

Under the United Nations Convention on the Law of the Sea, no country owns the North Pole, but nations do have sovereignty offshore out to 200 nautical miles and can claim sovereignty beyond that if the nation can prove that its continental shelf extends further. That is the basis for the Russian claim and the coming Danish claim.

Provided that all the countries with skin in the game play by the rules, it could take as many as 20 years to adjudicate even one nation’s claim beyond the 200-mile limit. And it is highly unlikely that any sort of real exploration and production could occur until at least a decade after the decisions are made. Then it would take another 10 years to find and begin extracting the resources. That’s approximately 2050.

By then, of course, crude oil could cost more than $500/barrel or it could be worthless. The unfrozen Arctic seas offer more of a shipping opportunity than anything else.

None of the big oil companies appears to be even remotely interested in the Arctic. BP plc (NYSE: BP) and its Russian partner TNK, are currently in a dispute over a stake in a project off the north coast of Russia that has been on the drawing boards for at least a decade and is not really any closer to being productive now than it was then.

Drilling for oil or natural gas in the what may be the world’s harshest environment will be neither easy nor cheap. There probably doesn’t even exist today some of the technology that will be needed to make drilling possible.

There is so much grey area surrounding this issue due to the lack of ownership. Environmentalist will not be happy to see drilling occurring in the North Pole, so there will definitely be back lash from that perspective. Additionally, there will be many countries fighting to get access. Various sides will be pulling for their side, only a matter of time to see who gets their way. 

Quotes taken from report by Paul Ausick, Read the entire article here.

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