The World in 2050: Four Forces Shaping Civilization's Northern Future

pipe, mountains of sand, and jumbled iron graveyards of cannibalized trucks. Our grubby faces were stared at in disbelief over surrendered American passports:⁴⁰⁷ To West Siberians, a clump of dirty, sunburned field scientists wearing fleece and rubber boots hardly fit the profile. To them, Americans are smiling oil company executives, with briefcases and business suits.

Because of the West Siberian Lowland, the Russian Federation is now the world’s largest producer of natural gas and second-largest producer of oil. It is home to her major oil companies and Gazprom, the state- owned natural gas monopoly. After almost five decades of operations in the region, Russia’s energy industry has amassed enormous political, brainpower, and economic presence there. West Siberia is to the Russian energy industry what Silicon Valley is to technology, New York is to finance, or Los Angeles is to entertainment in the United States.

The Third Wave

The Third Wave of human expansion in the Northern Rim thus stems from our relentless search for fossil hydrocarbons. It began in the 1960s with major discoveries in Alaska, Canada, and the West Siberian Lowland and shows no signs of abating. World interest in the Arctic, in particular, is fueled either by environmental concern for its threatened ecosystems, or excitement over perceived new bonanzas in oil and gas.

The newest frontier is the Arctic seabed. The previous chapter discussed the geopolitical commotion this dawning realization has spawned, and the critical importance of the United Nations Convention on the Law of the Sea (UNCLOS). A 2008 auction offered by the U.S. Minerals Management Service sold a whopping $2.8 billion worth of Arctic offshore leases; the Canadian government similarly won record-breaking bids for leases in the Beaufort Sea.⁴⁰⁸

In 2009 a first comprehensive assessment of the Arctic Ocean’s oil and gas potential was published in Science by the U.S. Geological Survey, and the associated data files were released to the public.⁴⁰⁹ This assessment, which is still incomplete and ongoing, suggests that nearly a third of the world’s undiscovered natural gas and 13% of its undiscovered oil lies north of the Arctic Circle (see maps pp. viii- xi). All that in a place covering barely 4% of the globe.

Two huge winners are revealed by the USGS data: northern Alaska for oil, and Russia for natural gas. Of forty-nine geological provinces analyzed so far, these two places tower above all others. The Alaska Platform, covering the North Slope and extending a roughly similar area offshore, is thought to hold between 15 and 45 billion barrels of oil with a best guess of about 28 billion. This number approaches the proved reserves of Nigeria and is about one-fourth those of Iraq. Russia’s South Kara Sea alone is thought to hold between 200 and 1,400 trillion cubic feet of natural gas, with a best guess of 607 trillion. That number, if correct, is more than twice the proved reserves of the United States and Canada combined.

There are other promising geological provinces besides these two. For oil, they are Canada’s Mackenzie Delta, the north Barents Sea, the West Siberian Lowland, and three provinces off the east and west coasts of northern Greenland. For natural gas they are the south Barents Sea, the Alaska Platform, and the north Barents Sea.⁴¹⁰

If recent offshore lease sales are any indication, many or all of these places will experience increasing levels of interest, exploration, and investment in the coming decades. But will drilling platforms and thousands of new offshore wells mushroom in these Arctic waters by 2050?

Possibly, but don’t bet on it. Offshore energy development is more likely to grow cautiously and incrementally. Even in ice-free oceans—which the Arctic Ocean most certainly is not—offshore drilling is complicated and expensive. Northern environments are environmentally delicate, so they demand above-normal protections. Existing ports and other maritime facilities, as discussed in Chapter 5, are scarce. Ice-resistant platforms and other new technologies still need to be invented. Outside of the Alaska Platform, the vast share of hydrocarbon in the Arctic is not oil but natural gas, which is harder to capture and transport. Oil can be simply pumped from the ground and poured into a tanker. Natural gas needs either pipelines or an expensive LNG or gas- to-liquids facility—essentially a refinery—to liquefy it. Even by 2050 these are formidable obstacles in a place that is environmentally sensitive, remote, and still inaccessible for much of the year.

Something Old Is New Again

What is assured over the next forty years is intensification of oil and gas exploitation in and around the places they already exist today. Offshore, these include the giant Shtokman and other gas fields of the Barents Sea, and Sakhalin Island in the Russian Far East. On land—despite some added engineering complications from thawing permafrost—they include West Siberia, the North Slope of Alaska, the Mackenzie Delta, and Alberta. Norway’s gas and oil activities are mostly offshore, but by 2050 large areas of north- central Russia, Alaska, and Canada will look quite different than they do today.

Russia in particular will continue to aggressively develop her Siberian gas fields. When I cornered Alexei Varlomov, deputy minister for the government agency overseeing all natural resources of the Russian Federation, he told me, “The most important factor is the needs of industry,” and that absolutely nothing should get in the way of energy exploration.⁴¹¹ His view is understandable, given the prominence of his country as a world energy supplier. Russia produced 3.6 billion barrels of oil in 2008, second only to Saudi Arabia.⁴¹² It produced 603 billion cubic meters of natural gas—and held 43.3 trillion more in proved reserves, both second to none in the world.

Two out of every three barrels of this oil and 85% of this gas comes from West Siberia. However, as is the case with all oil provinces, the size distribution of its petroleum fields is log-normal and the region’s oil production has entered decline.⁴¹³ Russian production peaked in 1987-88. Samotlar, one of the largest oil fields in the world, peaked at 3.4 million barrels per day in 1980. It has since dropped over 90%, producing just 300,000 barrels per day from its approximately five thousand wells.⁴¹⁴ The region’s three major gas fields have also peaked, and their production is expected to fall 75% by 2030.⁴¹⁵ There will always be more pockets to be found, but as discussed in Chapter 3, like any other hydrocarbon province on Earth they are growing exponentially smaller and thus less economical to develop.

West Siberian exploration is therefore shifting away from the middle reaches of the Ob’ River—where most of the basin’s crude oil is found—to the immense concentrations of natural gas found farther north. The largest known natural gas reserves on Earth are found in approximately sixty to one hundred fields in this area. Just offshore is the South Kara Sea, now thought to hold perhaps 1,400 trillion cubic feet more. The Yamal Peninsula, stuffed with natural gas, condensate, and oil, lies at the heart of this bonanza and will doubtless be developed.

While less glamorous than the prospect of proliferating offshore platforms in the Arctic Ocean, 2050 will likely see a great degassing of the Yamal Peninsula, feeding thousands of miles of pipeline heading west to Europe and east to China. It is unclear whether a port can be built on its shallow west coast, or that environmental damages will be avoided, but pipelines will spread across the Yamal. Already, at least two are planned and the first one has just broken ground.⁴¹⁶

Pay Dirt

Even from several miles away, through the fogged window of the little airplane and a dreary splatter of rain, I could see the heavy curtain of smoke and glowing spots of orange flame. It was Tolkien’s Mordor brought to life, the soil ripped away to expose pitted blackness beneath. Giant trucks dug away at the spoils like orcs. Near the fuming smokestacks were yellow mountains of pressed sulfur blocks, waste excrement from the transformation of low-grade bitumen into synthetic, crude oil. It was a depressing and evil-looking landscape, at least to anyone who finds boreal wetlands and green pine forest attractive.