Arctic Oil: Canada’s Chance to Get it Right

SSHRC Knowledge Synthesis Report

1 June 2016

Michael Byers Canada Research Chair in Global Politics and International Law University of British Columbia

With research assistance from Gregory Sharp (MA student) and Emma Lodge (BA student)

Arctic Oil: Canada’s Chance to Get it Right 2

I. KEY MESSAGES – ONE PAGE SUMMARY 4

II. EXECUTIVE SUMMARY 5

1. INTRODUCTION 8

2. HISTORY OF ARCTIC OIL 8

2.1 Arctic Oil in Canada 8

2.2 Arctic Oil in other countries 11 Russia 11 Alaska (US) 13 Greenland (Denmark) 14 Norway 15

2.3 Exuberance of 2007-2009 16 Improved access 16 High oil prices 16 Domestic politics 17 USGS report on undiscovered reserves 18

2.4 Recognition of environmental risks of Arctic oil 18 Oil spills 18 Seismic surveying 19 Contributions to climate change 19

2.5 Collapse in world oil prices 20

3. RESOLVE INTERNATIONAL LEGAL DISPUTES 21

3.1 Resolve Hans Island dispute 23

3.2 Resolve Beaufort Sea boundary dispute 25

3.3 Resolve Lincoln Sea boundary dispute 28

3.4 File the Arctic portion of Canada’s submission to the Commission on the Limits of the Continental Shelf, as prepared in 2013 30

3.5 Resolve Northwest Passage dispute 33

4. IMPROVE INTERNATIONAL ENVIRONMENTAL INSTRUMENTS 35

4.1 Negotiate an Arctic Oil Spill Prevention Agreement 35

4.2 Extend the Polar Code ban on high sulfur fuel to the Arctic 36

5. ADOPT NEW DOMESTIC LAWS AND REGULATIONS 38 Arctic Oil: Canada’s Chance to Get it Right 3

5.1 Adopt traffic separation schemes through Northwest Passage 38

5.2 Create meaningful Marine Protected Areas 39

5.3 Reintroduce same-season relief well requirement 41

5.4 Remove liability caps 42

5.5 Adopt a unilateral ban on heavy fuel oil in Canadian Arctic waters 44

CONCLUSION 44

BIBLIOGRAPHY 45

Arctic Oil: Canada’s Chance to Get it Right 4

I. Key Messages – One Page Summary

Oil was found in Canada’s Arctic as early as 1789. The first claims were staked in 1914; since then, oil and gas interest in the region has waxed and waned depending on global prices, government policies and Indigenous land claims. Oil and gas have been discovered in the Mackenzie River Delta, the Beaufort Sea and around the High Arctic islands, though the fields are scattered and difficult to access. Climatic conditions and a lack of infrastructure pose additional challenges.

With present prices, no oil or gas activity is taking place in Canada’s Arctic. This pause in development puts the Canadian government in a perfect position to create informed, carefully considered policies for when activity recommences. This report recommends the following “no regret policies” that will serve Canada’s interests, even in the absence of renewed oil and gas activity in the Arctic:

 Resolve international legal disputes: Canada has four international legal disputes in the Arctic, and while these are long-standing disputes, they should be easy to solve through diplomacy. Working with neighbouring countries to solve the Hans Island dispute, the Lincoln and Beaufort Sea boundary disputes, and the dispute over the status of the Northwest Passage would help provide certainty concerning the applicability of Canadian law—including safety and pollution prevention regulations, exploration licenses, insurance and liability regimes, royalties, etc.—across all of Canada’s Arctic.

 Improve international environmental instruments: The Arctic ecosystem is fragile and threatened, and steps must be taken to ensure its safety. Both an oil spill prevention agreement and a ban on the use of high sulphur fuel oil for shipping are needed. Protecting the environment will help to gain social license for resource projects.

 Adopt new domestic laws and regulations: Although some issues cannot be solved unilaterally, new domestic laws and regulations can protect Canadian interests in the Arctic and create momentum for the negotiation of international agreements. The creation of traffic separation schemes and meaningful marine protected areas, lifting liability caps and always requiring a same-season relief well capability—would all serve Canada well and encourage other countries to follow.

All of the above recommendations, which are based on existing knowledge, are necessary to enable safe and efficient oil and gas activity to recommence in Canada’s Arctic—if and when prices rise sufficiently to offset the high costs of Arctic operations. These recommendations would protect the environment and the interests of Arctic Indigenous peoples, increasing the likelihood of projects obtaining the social license needed to proceed.

Arctic Oil: Canada’s Chance to Get it Right 5

II. Executive Summary

Oil was found in Canada’s Arctic as early as 1789. The first claims were staked in 1914; since then, oil and gas interest in the region has waxed and waned depending on global prices, government policies and Indigenous land claims. Oil and gas have been discovered in the Mackenzie River Delta, the Beaufort Sea and around the High Arctic islands, though the fields are scattered and difficult to access. Climatic conditions and a lack of infrastructure pose additional challenges.

With present prices, no oil or gas activity is taking place in Canada’s Arctic. This pause in development puts the Canadian government in a perfect position to create informed, carefully considered policies for when activity recommences. This report recommends the following “no regret policies” that will serve Canada’s interests, even in the absence of renewed oil and gas activity in the Arctic:

Resolve International Legal Disputes

Canada has four international legal disputes in the Arctic, all of which create uncertainty for oil companies. The easiest to resolve should be that of tiny Hans Island, located halfway between Ellesmere Island and northwest Greenland. In 1973, when the maritime boundary between Canada and Greenland was being drawn, negotiators discovered a difference of opinion over the island and, instead of resolving it, chose to work around it. As a result, the maritime boundary stops at the south shore of Hans Island and continues again from the north shore, leaving the island itself as the only disputed land in the entire Arctic. This dispute has no implications for the location of the maritime boundary between Canada and Greenland, nor for Canadian and Danish rights elsewhere. This irrelevance should make it easy to resolve, with one option being to draw a straight line across the island from the maritime boundary on one side to the maritime boundary on the other, giving each country approximately half of the land.

Canada’s Arctic maritime boundary disputes should also be easy to resolve. The Beaufort Sea dispute between Canada and the United States turns on the interpretation of an 1825 Treaty, and specifically, whether the line used in that treaty—the 141st W meridian— applies offshore. The US argues that it does not, and that the ‘equidistance principle’ applies instead. However, the recent extension of coastal state rights beyond 200 nautical miles from shore, over the so-called “extended continental shelf”, creates a situation where each country stands to gain from the other’s preferred approach. For this reason, resolution could be as simple as sharing the disputed area equally.

The Lincoln Sea dispute between Canada and Denmark is simply a case of an unfinished job. In 2012, a tentative agreement was reached, with the only remaining task being the negotiation of a joint management regime for any straddling hydrocarbon deposits. This regime has to be negotiated with the Greenland government, which has responsibility over natural resources, before a treaty can be ratified with the Danish government.

Arctic Oil: Canada’s Chance to Get it Right 6

Finally, Canada must resolve its dispute with the US over the status of the Northwest Passage. While Canada considers the Passage to be ‘internal waters’, the US maintains that it is an ‘international strait’ passing through Canada’s ‘territorial waters’ and ships and aircraft from all countries have the right to uninterrupted ‘transit passage’. With climate change increasing accessibility for ships of all kinds, it is now in the interests of both Canada and the US to come to an agreement—so as to provide a clear legal basis for providing security and regulating ship safety and environmental protection. Canada should seek an agreement that both protects the US’s concern for freedom of the seas and recognizes Canada’s interests as the coastal state.

Although there is not yet any dispute in the Central Arctic Ocean, it is important that Canada file the Arctic portion of its submission to the Commission on the Limits of the Continental Shelf—exactly as that submission was prepared by government experts before then prime minister Stephen Harper intervened in 2013. Canada has no tenable claim to the North Pole, which lies on the Danish side of the ‘equidistance line’ north of Ellesmere Island and Greenland. Nor is any further science need to extend the Canadian submission northwards in advance of the almost inevitable boundary negotiations with Russia. By filing the submission as prepared, Canada will help to keep Arctic international relations grounded in international law, and provide legal certainty to any companies interested in seabed resources in the Central Arctic Ocean.

Improve international environmental instruments

Offshore oil and gas activity necessarily involves shipping for surveying, drilling and transportation. The Arctic is a dangerous place for shipping, due to sea-ice and icebergs, extreme weather, poor charts, limited infrastructure and services, and sheer remoteness. The current pause in activity provides an opportune moment for the negotiation of international agreements that will make Arctic oil and gas projects safer, and thus help to secure social license.

Oil Spill Prevention Agreement: Although the Arctic Council states have concluded an Agreement on Oil Spill Preparedness and Response, a further agreement is needed on the prevention of oil spills. Prevention avoids damage and is more efficient than attempted clean-ups. A meaningful Arctic Oil Spill Prevention Agreement would require states to lift liability caps and ensure that companies are capable of drilling a ‘relief well’ during the same season.

Ban Heavy Fuel Oil in the Arctic: Heavy fuel oil (HFO) poses a major threat to the Arctic environment. A spill of heavy fuel oil, which emulsifies in the water, would lead to the coating of marine life in oil, or its poisoning after ingestion. The burning of HFO produces particulates (“black carbon”) that reduce the reflectivity of snow and ice and thus accelerate climate change. Although there is currently no ban on HFO in Arctic waters, reducing HFO emissions might be the most immediate way to slow climate change. Canada should seek an international ban on HFO in the Arctic, and adopt an immediate ban in its own Arctic waters.

Arctic Oil: Canada’s Chance to Get it Right 7

Adopt new domestic laws and regulations

Create Traffic Separation Schemes through the Northwest Passage: Traffic Separation Schemes (TSSs) are employed in areas that are challenging to navigate, normally due to a high density of traffic. Canada does not presently have TSSs in the Arctic, but will need them as shipping activity increases.

Create meaningful Marine Protected Areas: Canada needs to create meaningful Marine Protected Areas (MPAs) where resource development and regular shipping are not allowed.

Reintroduce the same-season relief well requirement: In 2011, the National Energy Board made it possible for companies to avoid the same-season relief well requirement by adopting alternative measures. Although the same-season relief well requirement can be costly, cost reductions should not be obtained at the price of greater environmental risk.

Lift liability caps: Liability caps externalize some of the costs of Arctic oil and gas and are thus a form of public subsidy to oil and gas companies. They should be lifted substantially or eliminated entirely.

All of the above recommendations, which are based on existing knowledge, are necessary to enable safe and efficient oil and gas activity to recommence in Canada’s Arctic—if and when prices rise sufficiently to offset the high costs of Arctic operations. These recommendations would protect the environment and the interests of Arctic Indigenous peoples, increasing the likelihood of projects obtaining the social license needed to proceed.

Arctic Oil: Canada’s Chance to Get it Right 8

1. Introduction

The Arctic is often portrayed as a treasure trove of natural resources. Oil and gas figure prominently among the riches found in the region. During the 1970s and 1980s, the Canadian government provided billions of dollars in support of Arctic oil and gas exploration, which led to the discovery of significant reserves in the Mackenzie Delta, Beaufort Sea, and High Arctic islands. The exploratory effort led to the development of new technologies for Arctic drilling, as well as a greater appreciation of the high costs and risks inherent in Arctic operations.

Due to low global prices, there is no oil and gas activity in Canada’s Arctic presently. While some may see a problem, this report sees an opportunity for the Canadian government to take the lead in policy-making, rather than playing catch-up to commercial interests and activities. Without clear policies, laws and regulations, Arctic oil and gas exploration, exploitation and transportation has been delayed, including by opposition from local communities, Indigenous groups and environmental organizations. Additional problems have arisen from unresolved boundary disputes in the Beaufort and Lincoln Seas, as well as the dispute over the legal status of the Northwest Passage, all of which create regulatory, and by extension, commercial uncertainty.

The Canadian government should use the pause in Arctic oil and gas activity to prepare for when exploration recommences. Based on a synthesis of existing knowledge, this report recommends a series of “no regret policies” that would serve Canada’s interests even in the absence of renewed activity.

2. History of Arctic Oil

This report begins with a historical overview of the legal, safety and environmental challenges of Arctic oil and gas in Canada. It then provides an overview of the developments and challenges in the other Arctic Ocean countries—Russia, Alaska (US), Greenland (Denmark) and Norway—followed by a discussion of the factors behind both the exuberance of 2007-2009 and the current lull in activity.

2.1 Arctic Oil in Canada

Indigenous peoples have long known of hydrocarbon deposits in Canada’s North, using tar and other oil products to waterproof their boats.1 Along the Mackenzie River, an area known to the Dene as Le Gohlini (‘where the oil is’) was noted by Sir Alexander Mackenzie in the late eighteen century. In 1914, Imperial Oil staked three claims near the site. Five years later, Norman Wells became the site of the first commercially exploited oil in the Canadian Arctic. However, the local market for oil was too small to sustain the operation, and it was not until the US military built a pipeline to Whitehorse during the Second World War that it became a viable endeavour. Norman Wells remained the sole oil operation in northern Canada for the next three decades. Arctic Oil: Canada’s Chance to Get it Right 9

In the 1950s, the Canadian Geological Survey (CGS) conducted a survey of hydrocarbon potential in the Mackenzie Delta, leading to interest from several companies.2 In 1958, a test well was drilled at Eagle Plains in northern Yukon, just above the Arctic Circle.3 In 1962, the CGS conducted another, larger survey named ‘Operation Porcupine’.4 This led to approximately 350 wells being drilled in northern Yukon and the northwest corner of the Northwest Territories in the 1960s.5 One particular find—the Reindeer D-27 well on Richards Island—confirmed the existence of deposits in the outer Mackenzie Delta.6

Concurrently with these developments, the Canadian government opened up rights to explore for oil, gas and minerals in the High Arctic islands. Three wells were drilled from 1961 to 1964 on Melville, Bathurst and Cornwallis Islands. Despite coming up dry, the wells proved that the technological challenges associated with drilling during the Arctic winter could be overcome.7

Interest shifted back to the Western Canadian Arctic following the discovery of a mammoth reservoir of oil at Prudhoe Bay, Alaska, in late 1967. The sheer size of the discovery—approximately 25 billion barrels—generated optimism for potential finds in the Mackenzie Delta and the Beaufort Sea. In 1970, Imperial Oil found oil at Atkinson Point. Major gas finds followed at Taglu in 1971 (Imperial), Parsons Lake in 1972 (Gulf) and Niglintgak in 1973 (Shell).8

The increased interest in Arctic opportunities led to the formation of Panarctic Oils in 1967, a consortium involving the Canadian government and 19 companies that focused predominantly on the High Arctic islands.9 Although Panarctic found substantial reserves of both oil and gas, it never achieved large-scale production. It did operate on an experimental basis out of Bent Horn N-72, a well drilled on Cameron Island. Between 1985-1996, 2.8 million barrels were produced and shipped from Bent Horn.10

With an increasing number of finds in the Mackenzie Delta, the Canadian government proposed a new pipeline to transport Arctic gas to existing pipelines in Alberta. In light of the challenges posed by a severe climate, permafrost, and the potential impact on northern communities, a royal commission was convened and hearings were held across the North in 1975-76. The commission’s report, published in 1977, found that a pipeline was feasible but that the northern Yukon was too environmentally vulnerable to sustain the development, and that Indigenous culture had not been taken seriously in its planning. It recommended further study and a 10-year moratorium while aboriginal land claims were resolved. The federal government imposed the recommended moratorium, and the interest of oil companies in the region waned.11

It also became clear that the high investment and operating costs of Arctic oil and gas made it vulnerable to external price shocks. The 1973 OPEC oil embargo rocked global energy markets and changed policy-making around the world. In Canada, then Prime Minister Pierre Trudeau implemented a ‘made-in-Canada’ oil price that was well below the global market price, subsidized consumers in Eastern Canada who relied on imported oil, and financed an extension of the Interprovincial Pipeline from Sarnia to Montreal.12 Arctic Oil: Canada’s Chance to Get it Right 10

After the Iranian Revolution rocked markets again in 1978-79, Trudeau introduced his controversial National Energy Program.

Another major factor influencing Arctic oil and gas development was the settlement of aboriginal land claims. In the 1984 Inuvialuit Final Agreement (IFA), the Inuvialuit of the Mackenzie Delta surrendered their claim to aboriginal title in exchange for land, wildlife and financial guarantees from the Canadian government. This included Inuvialuit ownership of 91,000 square kilometres of land, and subsurface rights to hydrocarbons and minerals in 13,000 square kilometres of that total. 13 In the Beaufort Sea itself, the Inuvialuit were limited to subsistence fishing and wildlife management rights. The IFA and later land claims agreements were victories for Indigenous peoples, but they also provided greater certainty for capital-intensive resource projects.

By the mid-1980s a number of discoveries had been made in the Beaufort Sea, with the most notable being the Amauligak oil field. Although the field was never commercially exploited, a demonstration shipment of 317,000 barrels was sent to Japan in 1986.14

Further oil and gas development in Canada’s Arctic was hindered by the remoteness of the region and a lack of infrastructure. Unlike the large fields in Prudhoe Bay and the Alaskan North Slope, the smaller, scattered reserves of the Mackenzie Delta and the Beaufort Sea were less suited to commercial development.15 Then, in 1989, the Exxon Valdez ran aground in Prince William Sound, Alaska. The next year, the Environmental Impact Review Board—created under the IFA—found there was insufficient preparation for a major oil spill in the Beaufort Sea. Following its review, the Board recommended that the Minister of Indian and Northern Affairs not approve applications for offshore drilling, which stopped exploration in the Mackenzie Delta and Beaufort Sea for a decade.16

Arguably, federal regulations also played a role in deterring exploration. At the time, Canada had some of the highest standards in the world with regards to Arctic offshore drilling, including a requirement—introduced in 1976—that companies maintain the capacity to drill a same-season relief well. 17 Given the short drilling season in the Beaufort Sea, this meant that a second drill-ship had to be kept nearby, adding to the expense of any operation. Further exploration was also hampered by the elimination of federal subsidies for Arctic oil and gas exploration in the 1990s.18

It was not until the early 2000s and a rise in oil prices that exploration in the Mackenzie Delta and Beaufort Sea recommenced. Between 2003 and 2011, Chevron, ExxonMobil, ConocoPhillips, BP, Shell, and several smaller companies acquired licenses. 19 Several exploration wells were drilled, though one significant find was made—at the Paktoa C-60 well in 2005-06.20 Some companies blamed the lack of progress on the same-season relief well requirement, with Exxon Mobil arguing that it amounted to a ban on deep-water drilling.21

Activity ceased again after the Deepwater Horizon blowout in the Gulf of Mexico, which prompted the National Energy Board (NEB) to conduct a review of its offshore drilling Arctic Oil: Canada’s Chance to Get it Right 11 standards. Released in 2011, the Arctic Offshore Drilling Review maintained the same- season relief well requirement while adding a loophole that allows companies to escape the requirement if they can demonstrate the ability to meet or exceed the NEB’s safety standards without it.22 Despite this revision, only one company—British-based Franklin Petroleum—bid for leases in 2012, committing to just $7.5 million in exploration expenses.23

The drop in global prices has since postponed all oil and gas activity in the Canadian Arctic. In 2014, Chevron announced that it was halting exploratory drilling in the Beaufort Sea due to regulatory hurdles and the high cost of operations. A consortium of ExxonMobil and BP halted its drilling plans in 2015, citing insufficient time before their lease expired.24 With prices hitting new lows in 2016, the future of Arctic oil and gas in Canada is unclear.

2.2 Arctic Oil in other countries

Oil and gas have long been extracted elsewhere in the Arctic, most notably in the Komi Republic and Nenets Autonomous Okrug in Russia, and Prudhoe Bay in Alaska. 25 However, global interest in Arctic oil dates to 2008, when the US Geological Survey (USGS) produced the first pan-Arctic assessment of hydrocarbon potential. Its conclusion, that the Arctic may contain the largest undiscovered hydrocarbon reserves in the world, sparked talk of a “new gold rush” in the region. 26 Specifically, the report estimated that the Arctic accounts for approximately 22 per cent of the world’s undiscovered technically recoverable oil and gas resources, including 13 per cent of undiscovered oil and 30 per cent of undiscovered natural gas with roughly 84 per cent of these resources expected to occur offshore.27 Russia has an estimated 58 per cent of the resources, followed by Alaska (US) with 18 per cent, Greenland (Denmark) with 12 per cent, and the remaining 12 per cent split between Canada and Norway. However, the significant differences between the five Arctic Ocean coastal states have a huge bearing on the viability of oil development there.

Russia

Russia’s Arctic coastline stretches 8000 kilometres. It is therefore unsurprising that the Russian government views the region as hugely important, both domestically and internationally. Its 2013 strategy emphasizes the development of telecommunications infrastructure, search and rescue capabilities, and the scientific and technological sectors.28 However, it makes almost no mention of Arctic oil and gas—something that is also true of other Russian government policy documents 29 as well as the priorities outlined on Russia’s Arctic Council website.30

Nevertheless, Russia is heavily dependent on oil and gas from onshore fields, especially in northern Siberia. Although official numbers suggest that the share of hydrocarbon production in the country’s GDP has not surpassed 26.5 per cent for a quarter century, these numbers obscure the larger picture. When state expenditures and imports purchased with oil revenues are taken into account, hydrocarbons could compose up to 70 per cent Arctic Oil: Canada’s Chance to Get it Right 12 of GDP. Furthermore, Russia’s budget revenues, levels of foreign reserves, and currency exchange rates all track closely to the price of oil.31

Production has been declining as onshore fields become depleted and, as a result, the Russian government is intent on developing offshore fields, especially in the Arctic. Arguably, Russia’s international influence depends on the future of Arctic oil and gas, both to generate revenue and for political leverage. This latter, geopolitical interest also means that Russia will continue to develop Arctic oil and gas even if the costs exceed revenues.

The 2008 USGS report estimated that there are 240 billion barrels of oil equivalent in the Russian Arctic, or over half the total present in the Arctic as a whole. Estimates published by the Russian government are even higher, at over 450 billion barrels of oil equivalent.32 On the whole, the geological makeup of the Russian Arctic predisposes it to gas instead of oil, and up to 80 per cent of the reserves could be gas.33 Moscow’s focus is on oil, however, as it is easier to transport and more valuable than gas.

If previous attempts at offshore development in the Russian Arctic are any indication, the development of offshore oil will take time. The massive Shtokman gas field, located 600 kilometres north of the Kola Peninsula, is illustrative of the challenges. Discovered in the late 1980s, its development was slowed by difficult weather and sea conditions, confusing tender processes for international partners, and disagreements over technical approaches. In the end, the project was indefinitely postponed—after massive cost overruns, the dramatic expansion of shale gas production in the US, and a decline in the European market.34 The development of the Prirazlomnoya oil field, led by Gazprom, suffered from a high turnover of international partners and political interference leading to inefficiency. However, it still became the first field from which offshore oil has been extracted in Russia’s Arctic.

Arctic offshore development in Russia has become more complicated following the 2014 annexation of Crimea and the implementation of sanctions by the US, the EU, Canada, and Norway. Some of the sanctions target Arctic offshore oil development specifically, making international partnerships and the export of technology more difficult. The most prominent victim of the sanctions was Rosneft’s partnership with Exxon.35 The sanctions, however, have not prevented foreign subsidiaries of Western companies from bidding on offshore contracts in the Russian Arctic. 36 Nor have they, for example, prevented Norwegian companies from continuing with contracts that entered into force before the Norwegian sanctions began.37

The development of Arctic oil in the Russian offshore has attracted the attention of Western environmental groups, most notably Greenpeace. In 2013, the Greenpeace ship Arctic Sunrise sailed to Northern Russia to engage in civil disobedience against the development of the Prirazlomnoye field. The Russia government responded quickly and firmly, arresting the protesters and impounding their ship until the end of the drilling season. Although the environmental movement is a significant factor in policy-making in other Arctic countries, this is not the case in Russia. Arctic Oil: Canada’s Chance to Get it Right 13

Despite Russia’s impressive reserves and political motivation for continue development, it still lacks the technology and expertise necessary for efficient Arctic offshore production. But while these shortcomings are difficult to address during a period of sanctions and low prices, Arctic oil will remain a priority for the Russian government because of the economic benefits and geopolitical advantages it provides.38

Alaska (US)

As in Russia, most oil and gas development in Alaska has occurred onshore. The Prudhoe Bay oil field was discovered in 1968 and came on-stream in 1977. Output peaked in 1989 at two million barrels per day, by which point Prudhoe Bay was supplying one quarter of total US production.39 Output has since declined to less than 300,000 barrels per day, creating a potential problem for the Trans-Alaska Pipeline System, which needs roughly that amount of throughput to avoid ice formation and wax settlement and thus remain operational. The declining output also poses a problem for the Government of Alaska, which derives 90 per cent of its budget from oil.40,41

The Alaska National Wildlife Reserve (ANWR) and the National Petroleum Reserve– Alaska (NPRA) are believed to hold significant on-shore reserves. But the US Senate refused to open up the former on environmental grounds, while protests by environmental groups and Indigenous communities have slowed movement on the latter. In recent years, it seemed the greatest hope for a recovery of output in Alaska lay offshore in the Chukchi and Beaufort Seas.42

Based on numbers provided by the USGS and the US Bureau of Ocean Energy Management, the two seas could together contain 26 billion barrels of oil and natural gas liquids and 131 trillion cubic feet of gas.43,44 Leasing activity between 2003 and 2007 saw 241 leases offered in the Beaufort Sea and, in 2008, another 487 in the Chukchi Sea. Both private oil majors and foreign state-owned enterprises were involved, with leases being acquired by BP, Total, ENI, Repsol, Statoil and Iona. The most active player has been Shell, with 133 Beaufort Sea and 275 Chukchi Sea leases.

Despite the significant hydrocarbon potential, exploration has been plagued by problems. Protests from environmental groups and Indigenous communities, as well as a series of legal challenges, slowed development until 2011, when the Department of the Interior confirmed the lease awards. By this time, however, the Deepwater Horizon blowout in the Gulf of Mexico had led to a temporary ban on offshore drilling in Alaska. When the ban was lifted in 2012, this came with a more stringent regulatory regime, including a requirement that companies provide detailed plans for preventing oil spills and capping blown-out wells.

Shell, the most active player in the Alaskan offshore, faced operational problems with its drill-ships,45 damning US Coast Guard reports that revealed a lack of commitment to safety and environmental protection,46 and an international campaign to “Save the Arctic” launched by Greenpeace. In light of Shell’s problems, ConocoPhillips and Statoil both Arctic Oil: Canada’s Chance to Get it Right 14 announced they were postponing their plans in 2013. In 2015, Shell itself announced that it was halting Arctic exploration after spending $7 billion and making only marginal finds.47 In May 2016, a consortium of oil companies relinquished their leases in the Chukchi Sea, taking losses of over two billion dollars and returning 2.2 million acres of drilling rights to the US government.48

Nevertheless, the oil fields north of Alaska exist in shallow water, have low reservoir pressures, and are likely large and of relatively high quality. They also benefit from Alaska’s low tax regime. 49 For all these reasons, there may still be a future for offshore oil production in Alaska, when prices recover.

Greenland (Denmark)

The 1973 OPEC embargo sent the price of oil soaring, prompting the first exploration efforts around Greenland. In 1989, the Danish government tasked the ‘Kanumas Group’—a consortium made up of ExxonMobil, Statoil, BP, Japan National Oil Company, Texaco, Shell, and the newly formed Greenlandic Nunaoil—with conducting seismic surveys in partial exchange for preferential leasing rights in the future. 50 Although several potential deposits were identified, interest dwindled when prices normalized.

It was not until the mid-2000s that activity resumed, in tandem with rising prices and the formalization of a licensing procedure. In 2006-07, seven licenses were awarded in the Disko West area, a majority of them to Cairn Energy.51 After finding some small oil and gas deposits in 2010, the Scottish company drilled another five wells in 2011. However, it failed to discover any commercial scale deposits and wrote off more than $1 billion in losses.52 Other companies remained interested, however, and four more licenses were awarded in 2013.53

In 2011, Greenpeace drew international attention to Cairn Energy’s activities when the organization’s executive director scaled the side of a drill ship.54 The drilling became an issue in the 2013 election in Greenland, which the anti-drilling party won.55 In Greenland, the arguments for-and-against offshore oil development resonate more deeply than in any other Arctic country. On one hand, many among the population of only 56,000 still rely on whale and seal hunting and fishing for their livelihoods, which could be threatened by a major spill. On the other hand, Greenland’s decolonization from Denmark depends on increasing resource royalties. The island is, in the words of a Greenlandic politician, “just one oil strike away from independence.”56

Drilling around Greenland is difficult due to harsh weather and ice conditions. The lease areas west and south of Greenland are free of sea-ice during the summer and fall but have many icebergs, which come from land-based glaciers. The lease areas northeast of Greenland have sea-ice throughout the year, including thick, hard multiyear ice. 57 Acknowledging these difficulties, Statoil has explained that any development around Greenland would “only move as fast as the technology would allow, following a step- wise process in a long-term project.”58 However, on-shore infrastructure is relatively Arctic Oil: Canada’s Chance to Get it Right 15 good in Greenland, especially on the west coast where there are a number of ports and well-developed communities. On the east coast, nearby Iceland offers similar facilities. For this reason, offshore oil development around Greenland remains a real possibility, once prices rebound.

Norway

Exploration in the Norwegian sector of the North Sea began in the late 1960s. The first discovery was the Ekofisk oil field in 1969, which was soon followed by several other major finds. After an initial phase of exploration dominated by foreign companies, the Norwegian government created state-owned Statoil, now one of the world’s major oil companies.

North Sea production continued to grow as the government negotiated maritime boundaries with the UK and Denmark and opened up more licenses for exploration. Statoil, for its part, became a technological leader in offshore oil and gas. The industry came to dominate the Norwegian economy, reaching 23 per cent of value creation in 2012, and paying taxes that enabled the creation of a generous welfare system and large sovereign wealth fund.59

Norwegian oil production peaked in 2001; it has dropped by half since then.60 For this reason, the development of Arctic oil is considered an important opportunity in Norway.61 The Barents Sea, divided between Russia and Norway by an agreed maritime boundary since 2010, is believed to have huge potential. In 2012, the Norwegian government opened licensing for 72 new exploration blocks in the Barents Sea.62

Ironically, the existence of a strong environmental movement in Norway has increased the industry’s interest in developing the Barents Sea. This is because environmental groups focused on protecting the Lofoten Islands, a mountainous archipelago halfway up the Norwegian coast that constitutes a major tourist attraction and supports a rich fishery. They succeeded, insofar as the government agreed to exclude the islands from present and future licencing rounds.63 This left the Barents Sea, further north and less supported by coastal infrastructure, as the next major opportunity.

Unlike most other Arctic seas, the Barents Sea is largely ice-free throughout the year, and conditions there are very similar to those found further south. This provides the opportunity for year-round drilling, which helps reduce costs and minimizes risks. More than 100 wells have been drilled in the Barents Sea so far, most of them by Statoil. The largest field, Snøhvit, contains more than 193 billion cubic meters of gas and has been in production since 2007. 64 Another field, Goliat, contains 174 million barrels of oil and 8 billion cubic meters of gas, and came into production this year. 65

The 2010 resolution of the Barents Sea boundary dispute created new opportunities, since both Norway and Russia had previously refrained from oil and gas activity in the 50,000 square nautical mile contested zone. The boundary agreement divides that zone in half, Arctic Oil: Canada’s Chance to Get it Right 16 and includes a regime for exploiting and allocating any trans-boundary hydrocarbon deposits.66

The Norwegian portion of the Barents Sea is the most likely location for continued oil development in the Arctic. Challenges exist, including remoteness and a harsh climate, but ice conditions and infrastructure are better than in any other Arctic country.

2.3 Exuberance of 2007-2009

Excitement about Arctic oil and gas reached a peak between 2007 and 2009. Receding sea-ice, high global prices, domestic politics, and USGS report on potential reserves combined to bring the region and its resources to public attention. Unfortunately, the perceived high stakes generated not only a great deal of excitement, but a great deal of misinformation as well.

Improved access

Sea-ice covers substantial portions of the Arctic Ocean year-round, with the extent of the ice expanding and retracting greatly with the seasons. Unlike the sea-ice that forms in the Antarctic, which is highly mobile, the ice found in the semi-enclosed Arctic Ocean tends to remain in the cold Arctic waters. As a result, some of the sea-ice persists through the summer months, becoming thicker, harder ‘multi-year’ sea-ice as it passes through successive melting and freezing cycles.67 Climate change, which is more advanced in the Arctic than anywhere else, is having a major impact on the sea-ice. 68 The ice is decreasing in both extent and thickness and, as a result, the Arctic is now dominated by relatively thin, soft ‘first-year’ ice.69

The changes in sea-ice coverage and composition will improve access for oil and gas activity. In 2011, a report published in Nature integrated various climate and sea-ice models with topography, transportation infrastructure and human settlements, and found that access to hydrocarbons within the Arctic countries’ Exclusive Economic Zones (EEZs) would be improved by between 5 to 28 per cent, depending on the model and location in question.70 In the Barents Sea, the late-winter ‘ice-edge’ has steadily retreated northwards, enabling the Norwegian government to issue leases in areas that it had previous considered out of bounds.71

High oil prices

The world price of oil has always been unstable, hitting highs in the 1970s against the backdrop of the Iranian revolution and the Iran-Iraq war, and then collapsing in the 1980s. In 2001, the price of oil was around US $20 per barrel (inflation adjusted to 2013 levels).72 The price climbed sharply after the 9/11 terrorist attacks and the 2003 invasion of Iraq. A lack of investment in future production, growing demand from Asia, and stagnating production in Saudi Arabia contributed to further rises.73 By mid-2008, the price hit $147 per barrel, prompting some analysts to predict a “super-spike” that would send the price above $200.74 Arctic Oil: Canada’s Chance to Get it Right 17

Although short-lived, these high prices and increased concerns about energy security prompted interest in Arctic oil. In 2008, the US government was able to sell exploration leases in the Chukchi and Beaufort Seas for the first time in two decades. Amidst much fanfare, 667 bids were placed on 488 blocks, with the financial commitments totalling $2.6 billion.75 In the Canadian portion of the Beaufort Sea, BP paid $1.2 billion for a lease, surpassing the record of $585 million set one year earlier by Imperial Oil and ExxonMobil Canada.76

Domestic politics

Domestic politics have contributed to misconceptions about the potential for resource disputes in the Arctic. In 2007, Artur Chilingarov, a Russian polar explorer, caused a global media frenzy by planting a titanium flag on the seabed at the North Pole and declaring “the Arctic is Russian.”77 This elicited a strong response from Peter MacKay, then Canada’s foreign minister, who exclaimed: “Look, this isn’t the fifteenth century. You can’t go around the world and just plant flags and say, ‘We’re claiming this territory.’ Our claims over our Arctic are very well established.”78 These comments were picked up by media outlets around the world, even through the primary audience in both cases was domestic. Chilingarov was then deputy chair of the Russian Duma during an election campaign; MacKay was part of a government that had made upholding Canada’s Arctic sovereignty a central element in its political brand. Each man played into the electoral strategies of the other by presenting himself and his country as a threat that was then manipulated for domestic political purposes.

Unfortunately, some commentators overlooked the domestic dimension and saw instead the beginning of a ‘New Cold War.’ For example, in 2008 Scott Borgerson of the US Council on Foreign Relations described the situation in the Arctic as a “scramble” having potentially serious consequences: “The combination of new shipping routes, trillions of dollars in possible oil and gas resources, and a poorly defined picture of state ownership makes for a toxic brew.”79 This sensationalism was echoed around the world, as reflected in headlines such as: “Arctic: Fight for the Top of the World;”80 “Race for the North Pole: Nations Vying for Arctic Treasures;”81 and, perhaps most spectacularly, “Putin’s Arctic invasion: Russia lays claim to the North Pole – and all its gas, oil and diamonds.”82

The sensationalism made for great ‘news’ but did not reflect reality. One of the Russian scientists involved in the North Pole flag-plant soon admitted that it was a publicity stunt lacking legal relevance.83 Danish Foreign Minister Per Stig invited his counterparts from the four other Arctic Ocean coastal states to Ilulissat, Greenland, where they reaffirmed their commitment to resolving any disputes within an existing framework of international law.84 This commitment was reiterated in 2010 by then US Secretary of State Hillary Clinton who spoke of the need for Arctic countries to work together: “We need all hands on deck because there is a huge amount to do, and not much time to do it.”85 Later that year, Russia and Norway signed a boundary treaty for the Barents Sea,86 and Canada released an Arctic Foreign Policy Statement that signalled its intent to resolve its remaining Arctic boundary disputes.87 Arctic Oil: Canada’s Chance to Get it Right 18

USGS report on undiscovered reserves

In 2008, the USGS fuelled the ‘scramble for resources’ narrative by releasing a report entitled “Circum-Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas North of the Arctic Circle.” The report estimated that nearly a quarter of the Earth’s undiscovered and technically recoverable hydrocarbons were in the Arctic, with 80 per cent of that being located offshore. These projected Arctic reserves amounted to 13 per cent of the world’s undiscovered oil and 30 per cent of its undiscovered natural gas.88

These numbers continue to draw enormous attention from the media, but consider this: The projected reserves are undiscovered. They amount to 83 billion barrels of oil, enough to meet current world demand for just three years; and 44 trillion cubic metres of natural gas, or roughly fourteen years of supply.89 This makes them relatively small in size, as a fraction of world supply. And while these projected reserves are technically recoverable, the costs and risks of Arctic oil and gas are very high—indeed, prohibitively high in most places.

2.4 Recognition of environmental risks of Arctic oil

The growing interest in Arctic oil has led to growing recognition of the environmental risks, including oil spills, noise from ships and seismic surveying, and contributions to climate change.

Oil spills

Oil spills can happen in at least three ways. First, oil tankers can founder or run aground due to human error, mechanical failure, or bad weather. For example, in 1989 the Exxon Valdez spilled more than 257,000 thousand barrels (80 million litres) into Prince William Sound on Alaska’s southern coast.90 Second, cargo and cruise ships carry substantial amounts of fuel oil, which can spill as the result of an accident. In 2004 the Mv Selendang Ayu, a Malaysian cargo ship, broke apart and spilled 7,550 barrels (1.2 million litres) of ‘bunker oil’ while transiting Unimak Pass in the Aleutian Islands.91 Third, oil can escape during drilling. In 2010, the Deepwater Horizon exploded and sank 65 kilometres off the Louisiana coast. The ruptured wellhead spewed at least 4.9 million barrels (780 million litres) before it could be capped three months later.92 Spills are more common than most people think: Between 2002 and 2013, the Canadian Coast Guard reported 100 spills from vessels in the Arctic, most of them diesel fuel and gasoline spills smaller than 30 cubic metres (30,000 litres).93 More seriously, it is estimated that Russia loses more than one per cent of its oil production through leaks and spills.94

Exacerbating the risks, oil degrades and dissipates very slowly in cold water. Almost a quarter of a century after the Exxon Valdez accident, some of the oil persists in the ecosystem along the southern Alaska coast.95 Great distances, extreme weather, sea-ice, seasonal darkness, and an absence of coastal infrastructure can all impede clean-up efforts. Indicative of as much, almost no oil was recovered after the 2004 accident in Arctic Oil: Canada’s Chance to Get it Right 19

Unimak Pass, due to the remote location, weather, and near-complete absence of oil spill clean-up equipment in the Aleutian Islands.96

Seismic surveying

Seismic surveying involves sending loud noises towards the ocean floor and measuring the resulting echoes from the sediments below. Ships tow airguns behind them, shooting blasts up to once every ten seconds for periods of days to weeks at a time. With this method, geologists can estimate the depth, structure and location of subsurface resources. However, seismic surveying may have negative effects on marine wildlife, including hearing impairment, physiological, behavioural and migration changes, and disruption of communications.97

Seismic surveying in Baffin Bay led the community of Clyde River, Nunavut, to seek a judicial injunction of the permit issued by the National Energy Board, on the basis that the community had been insufficiently consulted. An injunction was granted at first instance but overturned in 2015 by the Federal Court of Appeal, which held that the right to be consulted does not entail a veto. Clyde River has since been granted leave to appeal to the Supreme Court of Canada.98

Contributions to climate change

Arctic oil is not only becoming more accessible due to melting sea-ice; it actually constitutes a climate change ‘feedback loop’. For seizing on that accessibility to extract and consume more oil then produces more greenhouse gas emissions that cause more climate change, which makes more Arctic oil accessible, and so on. Moreover, Arctic oil has a larger ‘carbon footprint’ than oil from most other sources.

The Oil-Climate Index is a joint project of the Carnegie Endowment for International Peace, the University of Calgary and Stanford University that measures the ‘life-cycle’ greenhouse gas emissions of different types of oil, from exploration through exploration, processing, refining, transportation and consumption. It reports that “extreme oils,” such as offshore Arctic reserves, are among “the most climate-intensive oils currently identified.”99 That said, oil from the Barents Sea likely has a lower climate-intensity, because the type of oil and the distance to market are important determinants of total emissions.100

Another climate impact of Arctic oil involves flaring. Used to protect against over- pressuring during the extraction process, flaring is the burning-off of gases that coexist with oil. In remote locations where pipelines and other infrastructure are lacking, vast amounts of gas are flared as waste. Flaring is responsible for 40 per cent of the black carbon emissions in the Arctic, which by reducing the albedo of the ice, speed up climate change.101

The environmental risks of Arctic oil demand strong science-based regulations and royalty regimes that reduce risk and internalize external costs. Moreover, the unusual Arctic Oil: Canada’s Chance to Get it Right 20 aspects of Arctic oil—high up-front costs for equipment and infrastructure, high risks associated with remoteness and a harsh climate—make it important for companies and governments to assess their options carefully.

2.5 Collapse in world oil prices

The price of oil has varied widely over the past decade. It dropped during the global recession in 2008, spiked in 2011 with the Arab Spring, then plunged again in 2014— losing 70 per cent of its value by the end of 2015. Analysts have identified at least five factors behind the latest decline: (1) increasing fuel efficiency and the beginning of a transition away from oil; (2) continuing Iraqi and Libyan output despite the turmoil in those countries; (3) the dramatic increase in US output during the ‘shale revolution’; (4) Saudi Arabia and the Gulf states choosing to maintain their market share rather than reduce production in order to restore the price; 102 (5) Iran’s return to the oil market following the lifting of sanctions.103

Some oil producers can tolerate low prices because their extraction costs are low, but many others cannot. The collapse of oil prices has devastated the most vulnerable sectors of the industry: US shale oil producers reliant on hydraulic fracturing who borrowed heavily on the expectation of continued high prices; operators in mature, increasingly expensive fields such as the North Sea; and high-cost, high-risk projects such as offshore drilling in the Arctic.104 As a whole, the industry has decommissioned more than two- thirds of its rigs, cut investments in exploration and production, shed an estimated 250,000 jobs,105 and seen many smaller and over-leveraged companies go bankrupt.106

Arctic offshore oil has been particularly hard hit. Deloitte estimates that the cost of offshore production in the Arctic averages US $75 per barrel—the most expensive of any type of oil measured and almost triple the cost of production from onshore fields in the Middle East.107 IHS Energy puts that number even higher: “Companies may need prices to be around $100 per barrel to make that so-called ‘break-even’ point in Arctic projects.”108

Exploration north of Alaska has stopped with the collapse in prices. The most notable example is Shell’s abandonment of its activities in 2015, after having invested $7 billion.109 The picture is similar in Greenland, where a lack of commercial finds coupled 110 with depressed prices led Cairn Energy to pull out of the region. In the Norwegian portion of the Barents Sea, the newly developed Goliat oil field benefits from being located in the ice-free waters, and from Norway’s cutting edge technologies and infrastructure. However, it still requires prices of US $80-90 per barrel in order to break even.111 Despite a small increase in crude oil production in 2015 and the opening of leases in the Barents Sea for the first time in two decades, the country’s oil regulator, the Norwegian Petroleum Directorate, anticipates declining production from 2016-2019.112

Even Russia, heavily dependent on oil and gas revenues, has scaled back on Arctic exploration. In 2015, Gazprom announced that it was postponing drilling in the Kara Sea to 2018 and the Barents Sea to 2019.113 More recently, the Russian government scaled Arctic Oil: Canada’s Chance to Get it Right 21 back the number of planned offshore wells in 2017 from seventeen to just two. 114 Sanctions arising out of the Ukraine crisis have also taken their toll on the Russian Arctic offshore where, until recently, as much as 80 per cent of the required equipment was sourced from Western countries.115

Although oil and gas activity has slowed around the Arctic, the consequences of low prices are felt most heavily in Canada where international legal disputes persist, domestic laws and regulations are incomplete or out-dated, and Arctic infrastructure and services are poor. This report urges the Canadian government to use the pause in Arctic oil and gas activity to prepare for its eventual resumption. Based on a synthesis of existing knowledge, it makes a series of recommendations, all of which constitute “no regret policies” that would serve Canada’s interests even in the absence of renewed activity.

3. Resolve international legal disputes

All of the land in the Arctic belongs incontestably to one of the eight Arctic countries, with the insignificant exception of Hans Island, a rocky islet located halfway between Canada and Greenland (Denmark). Given that Canada and Denmark are both members of NATO and already have large Arctic territories, there is no prospect of force—or even economic sanctions—being used over Hans Island. The only question concerns when the two countries will decide to negotiate a solution.

The rest of the international legal disputes involving Canada in Arctic concern the maritime dimension, which is governed by rules of the ‘Law of the Sea’. These rules apply globally, since all countries, including the US, accept them as customary international law.116 Developed through centuries of state practice and opinio juris, they were codified in the 1982 UN Convention on the Law of the Sea (UNCLOS).117

As elsewhere in the world, the territorial seas of Arctic countries extend 12 nautical miles from shore. Within that band, coastal states have extensive regulatory powers over foreign shipping and absolute rights over fish and seabed resources. Between 12 and 200 nautical miles, in the Exclusive Economic Zone (EEZ), coastal states have fewer powers over shipping but absolute rights over fish and seabed resources. Beyond 200 nautical miles, coastal states lose their rights over fish but may have rights over the seabed, if and where they can demonstrate scientifically that the ocean floor is a ‘natural prolongation’ of their landmass.

All this means that planting a flag on the seabed at the North Pole had no more legal consequence than a flag-plant on the Moon. It also means that most of the Arctic’s oil and gas is within the uncontested jurisdiction of one or another coastal state, since offshore oil and gas, which is derived from organic material, is usually found in sedimentary strata in continental shelves.

For decades, international law has played a central role in determining the boundaries between the maritime zones of adjacent coastal states. The US and the USSR signed a Arctic Oil: Canada’s Chance to Get it Right 22 boundary treaty for the Bering Sea, Bering Strait and Chukchi Sea in 1990.118 In 2010, Russia and Norway concluded a similar treaty for the Barents Sea.119 This leaves just two unresolved maritime boundaries in the Arctic, both of which involve Canada: in the Beaufort Sea with the US, and in the Lincoln Sea with Greenland (Denmark).

Maritime boundary disputes have potential economic implications because of the seabed resources that might exist in the disputed zones. But there is no prospect of outside intervention in either the Beaufort Sea or the Lincoln Sea disputes because no other country has a potential legal claim. Nor is the alternative to law—brute force—a serious option for any country interested in the Arctic, since the vast distances and natural challenges of the region make militarization prohibitively expensive. Moreover, non- Arctic countries already have access to Arctic resources through foreign investment and trade.

In addition to the Hans Island, Beaufort Sea and Lincoln Sea disputes, Canada has a longstanding dispute over the legal status of the Northwest Passage. The US takes the position that the Passage is a so-called ‘international strait’ open to foreign vessels with only a few minor constraints; Canada insists that the Passage constitutes ‘internal waters’ that are subject to the full force of Canadian law, including a strict requirement of permission for entry.

Resolving these four disputes would provide certainty concerning the applicability of Canadian law—including safety and pollution prevention regulations, exploration licenses, insurance and liability regimes, royalties, etc.—across the entire Canadian Arctic. This certainty would benefit responsible oil, gas, and shipping companies.

Arctic Oil: Canada’s Chance to Get it Right 23

3.1 Resolve Hans Island dispute

From David H. Gray, “Canada’s Unresolved Maritime Boundaries,” (Autumn 1997) 5(3) IBRU Boundary and Security Bulletin 61

Hans Island is a barren islet, just one kilometre across, located between Ellesmere Island and northwest Greenland.120 It was only in 1973, when Danish and Canadian diplomats were negotiating a 1,450 nautical mile long continental shelf boundary between Greenland and Canada,121 that they became aware of a difference of opinion concerning title over the island. Instead of delaying their talks with this unexpected, almost inconsequential, development the negotiators simply drew the boundary line up to the low-water mark on one side of the island and continued it from the low-water mark on the other. Today, Hans Island, which is smaller than some of the icebergs that drift past it, is the only disputed land in the entire Arctic.

Arctic Oil: Canada’s Chance to Get it Right 24

Denmark’s claim is based on Hans Island being discovered in 1853 by an expedition that included a Greenlander, and on its use “for centuries by Greenlandic Inuit as an ideal vantage point to get an overview of the ice situation and of the hunting prospects, especially for polar bears and seals.”122 Canada’s claim is based on the transfer of North America’s High Arctic islands (excluding Greenland) from Britain in 1880. It also relies on ‘use and occupation,’ since international law requires that title to territory be consolidated and maintained by regular activity.123

The dispute achieved its ‘critical date’—the point when the differing positions became clear and subsequent attempts to bolster them became inconsequential to the legal analysis—in 1973, when the seabed boundary between Greenland and Canada was being negotiated.124 From that point onwards, a diplomatic protest by one country is usually sufficient to prevent the acquisition of sovereign rights by another country through the protested act. Notwithstanding this legal reality, the almost insignificant dispute over Hans Island has prompted some ridiculous and expensive forms of posturing, including the deployment of military aircraft and ships over long distances.

The importance of the Hans Island dispute has often been overstated, for it has no implications for the location of the maritime boundary between Canada and Greenland, or for Canadian or Danish rights elsewhere. When Canada and Denmark delimited the continental shelf between Canada and Greenland in 1973, they left a gap of just 875 metres between the end points on the north and south shores of Hans Island. As a result, any resolution of the dispute will not affect the surrounding seabed, which has already been divided by treaty. Nor will it have any consequence for the surrounding waters, since both countries have used the same line to define their fisheries zones.

The almost complete irrelevance of the dispute makes it easier to resolve, which may explain why, in September 2005, Canada and Denmark jointly committed to negotiations and stated: “While we pursue these efforts … we will inform each other of activities related to Hans Island. Likewise, all contact by either side with Hans Island will be carried out in a low key and restrained manner.”125

Solving the dispute should be as easy as drawing a straight line: from the end of the seabed delimitation line on one side of Hans Island, to the continuation of that line on the other. Under this approach, each country would secure title over approximately 50 per cent of the island, and Canada and Denmark would share a short and very remote land border.126Another solution would be to declare Hans Island a condominium, in the sense that Canada and Denmark would share sovereignty over all of it. A number of such arrangements exist elsewhere, including Pheasant Island in the middle of the Bidasoa River between France and Spain. 127 Those two countries share sovereignty, with administrative responsibility alternating every six months between the French municipality of Hendaye and the Spanish municipality of Irún.128

Whatever the solution, Inuit in Canada and Greenland should be involved. For instance, the governments of Greenland and Nunavut might wish to assume responsibility for managing the new border or condominium. They might even wish to create an Arctic Oil: Canada’s Chance to Get it Right 25 international park, along the lines of Waterton-Glacier International Peace Park, which straddles the border between the Canadian province of Alberta and the US state of Montana.129

3.2 Resolve Beaufort Sea boundary dispute

The Beaufort Sea is located between Alaska and Canada’s High Arctic islands, just to the north of the Mackenzie Delta. The boundary dispute arises from the wording of an 1825 Treaty between Russia and Britain (the US took on Russia’s treaty rights when it purchased Alaska in 1867; Canada acquired Britain’s rights in 1880).130 The treaty sets the eastern border of Alaska at the “meridian line of the 141st degree, in its prolongation as far as the frozen ocean.”131 Canada claims this treaty provision establishes both the land border and the maritime boundary, and that both must follow the 141°W meridian straight north. The US claims that the treaty’s delimitation applies to land only, that regular methods of maritime boundary delimitation apply beyond the coastline, and that in the case of the Beaufort Sea an equidistance line—where every point on the line is an equal distance from the nearest point on the coasts on either side—is the legally and geographically appropriate approach.132 Since the coast of Alaska, the Yukon and the Northwest Territories slants east-southeast from Point Barrow, Alaska, to the mouth of the Mackenzie River, such an equidistance line trends progressively further east of the Canadian-preferred line at the 141°W meridian, running in a roughly north-northeast direction from the terminus of the land border to the 200 nautical mile limit. As a result, within that distance from shore, an approximately 6,250 square nautical mile pie-shaped disputed sector has been created.133

Coastal states are also entitled to sovereign rights over the resources of the seabed beyond 200 nautical miles, if and where the continental shelf appertaining to their landmass stretches beyond that limit. Article 76 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) sets out scientific criteria that states are to utilize in determining the outer limits of their jurisdiction over the extended continental shelf.134 Although the US has not yet acceded to UNCLOS, it has repeatedly stated that the convention’s major provisions reflect customary international law.135

The introduction of the extended continental shelf into the equation creates a curious twist to the Beaufort Sea boundary dispute because, if one extends the equidistance line preferred by the US beyond 200 nautical miles, it soon changes direction and begins tracking towards the northwest. It does so because of a change in direction of the Canadian coast on the eastern side of the Mackenzie River delta and even more so because of the presence of Banks Island, a large feature on the eastern side of the Beaufort Sea. The effect of Banks Island is so strong that the equidistance line crosses over the 141°W meridian (which, naturally, continues straight north to the Pole) and heads towards the maritime boundary between the US and Russia. This would seem to leave a large and as-yet-unspoken for area of extended continental shelf to the west of the 141°W meridian and east of the equidistance line, essentially the reverse of the dispute sector further south. In simple spatial terms, the US line appears to favour Canada beyond 200 nautical miles, and vice versa. Arctic Oil: Canada’s Chance to Get it Right 26

The extension of the Beaufort Sea boundary dispute beyond 200 nautical miles appears conducive to a negotiated solution. This, certainly, was the view of Foreign Minister Lawrence Cannon who, in 2010, publicly invited the US government to initiate discussions. Quiet negotiations began in Ottawa with the approval of both Mr. Cannon and Secretary of State Hillary Clinton, and a meeting was scheduled for the following year in Washington. 136 Those discussions appeared to have stalled after Lawrence Cannon was defeated in the 2011 election and John Baird became foreign minister. No official documents have been released since 2010.

Arctic Oil: Canada’s Chance to Get it Right 27

The issue re-emerged in March 2016 when the US Bureau of Ocean Energy Management (BOEM) issued a proposal for new leases off the coast of Alaska scheduled for 2020 and included the possibility of issuing leases in the disputed zone. However, the BOEM has been asked by Secretary of State John Kerry to consult with the State Department prior to going forward with any sales, because of the dispute with Canada. Although it is unlikely that the US would issue leases in the disputed zone, or that companies would be willing to accept the legal uncertainties of operating in the area, the announcement prompted a strong response from the Yukon government, with Justice Minister Brad Cathers tweeting that “this plan is a violation of Canada’s Arctic Sovereignty & territory that rightfully belongs to the Yukon & Canada.”137

Canada should invite the US to re-open negotiations on the Beaufort Sea Boundary. Prime Minister Trudeau and President Obama have already met to discuss cooperation in the Arctic, in March 2016. They issued a joint statement in which they pledged to develop low-impact shipping corridors, work towards a ban on all commercial fishing in the Arctic until research can determine sustainable levels, and protect 17 per cent of land areas and 10 per cent of marine areas by 2020.138 To facilitate the achievement of those goals, and to prepare for a possible resumption of offshore oil and gas activity, it is time to finally resolve this long-standing boundary dispute—something that could be as simple as dividing the disputed sector in half.

Arctic Oil: Canada’s Chance to Get it Right 28

3.3 Resolve Lincoln Sea boundary dispute

The Lincoln Sea Boundary dispute as it existed before 2012, from David H. Gray, “Canada’s Unresolved Maritime Boundaries,” (Autumn 1997) 5(3) IBRU Boundary and Security Bulletin 61

The Lincoln Sea is that portion of the Arctic Ocean located directly to the north of Greenland and Ellesmere Island. The Arctic’s thickest sea-ice is found there, pushed into the space between the two islands and held there for years by prevailing winds and ocean currents. In 1973, the negotiators delimiting the maritime boundary between Canada and Greenland in 1973 stopped at 82°13’N where Nares Strait opens into the Lincoln Sea. As a result, nearly 200 nautical miles of continental shelf (and later EEZ) boundary to the north were left unresolved.

In 1977, Canada claimed a 200 nautical mile fisheries zone along its Arctic Ocean coastline. The zone was bounded in the east by an equidistance line that used the low- water line of the coasts of Ellesmere Island and Greenland and several fringing islands as base points.139 Denmark adopted its own equidistance line three years later, but only after Arctic Oil: Canada’s Chance to Get it Right 29 drawing straight baselines—two of which used Beaumont Island as a base point. 140 Beaumont Island is just over 10 square kilometres in size and located more than 12 but less than 24 nautical miles from the Greenland coast. The first of the resulting baselines was 42.6 nautical miles long and ran from Cape Bryant at 82°20.4’N, 55°13.0’W to the northwest point of Beaumont Island at 82°45.2’N, 50°46.0’W. The second baseline was 40.9 nautical miles long and ran from the same point on Beaumont Island to Cape Distant at 83°08.2’N, 46°12.0’W. The use of straight baselines and Beaumont Island had the effect of pushing the equidistance line slightly westward, adding two isolated lens-shaped areas of 31 square nautical miles and 34 square nautical miles to the Danish (Greenland) claim.

The scope of the Lincoln Sea boundary dispute was reduced in 2004 when Denmark modified its straight baselines, using more precise base points and replacing the 40.9 nautical mile baseline east of Beaumont Island with a series of shorter baselines, including one that connects Beaumont Island to John Murray Island, the next island in the chain.141 The changes succeeded in reducing the size of the northernmost disputed sector, almost to the point of eliminating it, while also strengthening the case for using Beaumont Island as a base point.142

In November 2012, Canadian Foreign Minister John Baird and Danish Foreign Minister Villy Søvndal announced that negotiators “have reached a tentative agreement on where to establish the maritime boundary in the Lincoln Sea.”143 The only outstanding issue for negotiation is a joint management regime for any straddling hydrocarbon deposits. This issue could not be dealt with solely by the Danish and Canadian negotiators, for while Denmark retains control over Greenland’s foreign policy, the Greenland government has since 2008 exercised control over natural resources—including on the continental shelf.144 This final stage of negotiations should proceed un-problematically, since joint management regimes have become a standard part of maritime boundary treaties, including between Iceland and Jan Mayen and in the Barents Sea, meaning that models of best practice are easy to find.145 Canada should conclude the negotiations with Greenland and ratify a boundary treaty with Denmark.

Arctic Oil: Canada’s Chance to Get it Right 30

3.4 File the Arctic portion of Canada’s submission to the Commission on the Limits of the Continental Shelf, as prepared in 2013

IBRU map of maritime jurisdiction & boundaries in the Arctic region, from: http://www.durham.ac.uk/ibru/resources/arctic

There is no possibility of sovereign rights over the surface of the ocean, the water column, or any fish that might be located at the North Pole. Like all waters more than 370 kilometres (200 nautical miles) from shore, the North Pole lies on the high seas beyond the jurisdiction of any country. The only national rights that could exist concern the seabed, fully 4000 metres below the ocean’s surface. And if such rights exist, they belong to Denmark or Russia, not Canada.

The seabed at the North Pole cannot be Canadian because of the location of Danish- owned Greenland. This is because international law uses the equidistance principle to delimit maritime boundaries, with boundaries between adjacent coastal countries drawn along an outwards-running line, every point of which is an equal distance from the shorelines on either side. The North Pole is well within the Danish side of the equidistance line, northward of Greenland. Successive Canadian governments have Arctic Oil: Canada’s Chance to Get it Right 31 known this but refused to admit it publicly.

In 2013, Canadian government scientists and legal experts prepared a submission to the Commission on the Limits of the Continental Shelf (CLSC), an international body that reviews data collected by coastal countries for the purpose of securing international recognition over seabed rights. The submission did not include any data from the Danish side of the equidistance line, because the experts knew that Canada has no possible rights there.

There is a separate issue concerning the extent of Canada’s rights on its side of the equidistance line, along a seabed mountain range—the Lomonosov Ridge—that runs from Ellesmere Island and Greenland towards Russia, near but not over the North Pole. According to international law, Canada, Denmark and Russia may assert rights over the ridge if they can scientifically demonstrate that it is a “natural prolongation” of their landmass.

Canadian and Danish scientists believe they can prove that the Lomonosov Ridge is a prolongation of both Ellesmere Island and Greenland, whereas Russian scientists believe it is a prolongation of Asia. They are likely all right, since North America and Asia were—before continental drift occurred—a single landmass. If they are all right, all three countries will have legitimate, overlapping science-based rights to the entire ridge.

The CLCS does not adjudicate such overlaps, which must be resolved through negotiation or by an international tribunal. When this eventually happens, the equidistance principle will likely be applied again, this time to divide the ridge across the middle—with the new boundary being an equal distance from Ellesmere Island and Greenland on the one side, and the Russian coastline on the other.

Canada’s scientists and legal experts had worked through this scenario, and done enough mapping to cover it. But then, just days before Canada’s submission was due to be filed in December 2013, Stephen Harper intervened. The then prime minister ordered that the Arctic portion of Canada’s submission be withheld, and that the seabed at the North Pole be mapped in preparation for a more expansive submission. For the past two summers, Canadian Coast Guard icebreakers have travelled to the North Pole to do that mapping— at considerable expense to taxpayers.

Again, this effort to support a Canadian claim to the North Pole was legally unviable because of the location of the equidistance line dividing Canadian and Danish rights north of Ellesmere Island and Greenland. The only possible purpose for the mapping was to protect Harper against accusations of being soft on Arctic sovereignty—accusations that might well have been levied by the opposition parties, had Canada filed a submission that did not include the North Pole.

In 2014, Denmark filed a submission with the Commission on the Limits of the Continental Shelf that was unexpectedly large in geographic scope, including the entire Lomonosov Ridge up to Russia’s 200 nautical mile exclusive economic zone. 146 But Arctic Oil: Canada’s Chance to Get it Right 32 instead of reacting negatively, the Russian Foreign Ministry issued a conciliatory press release that stated: ‘Russia was well aware of the Danish side’s plans. Our countries have cooperated actively on this issue . . . and they will continue to cooperate on this issue.’147 The Russian Foreign Ministry noted that both countries were following an established submission process, and confirmed that, after the CLCS finished its work, ‘[p]ossible adjoining sections of our countries’ continental shelf in the high Arctic latitudes will be demarcated on a bilateral basis, through negotiations and in line with international law.’148

Then, in August 2015, Russia filed a submission that was more restrained in geographic scope than it might have been, in that it did not include all of the Lomonosov Ridge.149 The Russian government—like Canada’s scientists and legal experts—evidently foresees the eventual negotiation of a maritime boundary between its rights and those of Canada and Denmark in the Central Arctic Ocean

All of which brings us to today—and Canada’s new government. Since the additional mapping occurred against the advice of Canadian government experts, there is no reason to continue with it. Instead, the submission should be filed exactly as it was prepared in 2013, leaving the seabed at the North Pole to Russia and/or Denmark. This simple step would help keep Arctic international relations grounded in geographic realities and international law. It would also provide legal certainty should any companies be interested in the potential for seabed resources in such a remote place as the Central Arctic Ocean, with its extreme weather, year-round sea-ice, and water depths in excess of 4000 metres.

Arctic Oil: Canada’s Chance to Get it Right 33

3.5 Resolve Northwest Passage dispute

European Space Agency imagery of Northwest Passage showing classic route (dotted line) and deep-water route (solid line)

The Northwest Passage consists of several possible routes through Canada’s 19,000 High Arctic islands, which have been Canadian ever since title over them was transferred from the UK to Canada in 1880. Due to the nearly impenetrable sea-ice, control over the waters between the islands was not an issue of contention—until the advent and acquisition of powerful icebreakers by the US and, more recently, the melting of sea-ice resulting from climate change.150

In 1985, Canada drew “straight baselines” around the High Arctic islands and claimed that the straits and channels between them are “internal waters”, a designation that would bar foreign ships and aircraft from entering the Northwest Passage without express consent, and require them to comply with Canadian laws. The US maintains that the Northwest Passage is an “international strait” passing through Canada’s “territorial waters.” If the US is correct, ships and aircraft from all countries have a right of uninterrupted “transit passage”.151

In the past, the two countries have engaged in diplomacy on the Northwest Passage when it has been necessary to do so. In 1988, President Ronald Reagan and Canadian Prime Minister Brian Mulroney resolved a crisis precipitated by a US Coast Guard icebreaker Arctic Oil: Canada’s Chance to Get it Right 34 entering the waterway without requesting Canada’s permission.152 Reagan agreed that all such ships would seek Canada’s consent, in return for Mulroney promising that consent would always be granted. This was a stroke of deft diplomacy between two close neighbours. However, this “agreement to disagree” was arrived at before climate change opened the Northwest Passage to ships other than icebreakers,153 and before the melting sea-ice began attracting the interest of non-Arctic nations.

In the last four decades, the Arctic sea-ice has lost 65 per cent of its volume.154 Rising average temperatures in the high latitudes, especially in the winter, make it a matter of not “if” but “when” Arctic shipping routes are open. Private yachts, small eco-cruise ships and large bulk carriers already ply the Northwest Passage in late summer.155 This year the 1000-passenger cruise ship Crystal Serenity is due to pass through,156 as is the Snow Dragon—China’s research icebreaker.157 Arctic passages may never fully compete as cargo routes with the Suez or Panama canals, but they are much shorter for certain journeys and will only attract further interest as the sea ice retreats.158

The US and Canada could strike a new deal on the Northwest Passage that both protects the US Navy’s legitimate concern for freedom of the seas and recognizes Canada’s internal waters claim. But to achieve such an agreement, Canada would have to address two fundamental US concerns. The first is that any compromise on the Northwest Passage might create a precedent for other waterways such as the Strait of Hormuz where oil tankers exit the Persian Gulf and freedom of navigation is contested by Iran,159 or the Qiongzhou Strait between the Chinese mainland and Hainan Island. 160 Fortunately, international lawyers can easily distinguish the Northwest Passage from these straits, on the basis of its considerable length, the still-frequent presence of sea-ice and the current low level of shipping. The concern about a precedent could be alleviated further by the new agreement stating that it is “without prejudice” to the legal status of other waterways.

The second concern is that Canada, after having its internal waters claim recognized, might not invest in the infrastructure, services and other capabilities needed to protect US security and economic interests. These necessary investments include improved charts, navigation aids, ports of refuge, weather and ice forecasting, search and rescue, surveillance, and a credible security presence.161 However, provision of these kinds of investments could be stipulated in the agreement, and made a condition for remaining in force.

There is a long history of US-Canada cooperation on security matters, including through the joint North American Aerospace Defense Command, established in 1957 to detect and track Soviet bombers in the Arctic. 162 There has also been mutually beneficial cooperation on shipping through waters under national jurisdiction, such as the St. Lawrence Seaway, which passes seamlessly through the sovereign territory of both nations.163 With a new government in Canada, and the US becoming more engaged on Arctic issues, now is an opportune moment to address what has become a shared vulnerability. It is time to resolve the Northwest Passage, in the interests of both countries.

Arctic Oil: Canada’s Chance to Get it Right 35

4. Improve international environmental instruments

Offshore oil and gas activity necessarily involves shipping for seismic surveys, exploratory and production drilling, and transportation. The Arctic is a dangerous place for shipping, due to sea-ice, extreme weather, poor charts, limited infrastructure and services, and sheer remoteness. It is also a place where activity poses a heightened environmental risk due to the fragility of the ecosystems and the lack of spill-response equipment. The current pause in activity provides an opportune moment to address these challenges, including through the negotiation of meaningful international environmental instruments. Such instruments will make Arctic oil and gas activity safer and help secure the social licence that projects need.

4.1 Negotiate an Arctic Oil Spill Prevention Agreement

In 2013, the eight Arctic Council member states adopted an Agreement on Cooperation on Maritime Oil Pollution Preparedness and Response in the Arctic (‘Arctic Oil Spill Response Agreement’). The stated goal of the Agreement is to “strengthen cooperation, coordination and mutual assistance among the Parties on oil pollution preparedness and response in the Arctic in order to protect the marine environment from pollution by oil.”164 However, the Agreement does not create any new obligations. This is because all the Arctic Council member states had already made the same commitments previously, by ratifying the 1990 Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC), a treaty negotiated within the framework of the International Maritime Organization.165

Parties to OPRC are required to establish measures for dealing with pollution incidents, including the stockpiling of oil spill equipment, the development of clean-up plans, and the holding of exercises. They are also required to cooperate in the event of a spill; this may include providing equipment when requested by another party. The Arctic Oil Spill Response Agreement reiterates these obligations but adds no new ones. Moreover, neither OPRC nor the Arctic Oil Spill Response Agreement require that states meet even minimal requirements concerning the positioning and deployment of oil spill equipment and personnel. A state could thus meet its obligations without spending the funds necessary for actual preparedness.

Most importantly, neither treaty includes any provisions directed at oil spill prevention, even though prevention will always be more effective than clean-up. Indeed, in parts of the Arctic, and throughout the entire region in winter, cleaning up a major oil spill would be an impossible task. This is why the negotiation of a meaningful prevention agreement is so very important.

An Arctic Oil Spill Prevention Agreement should require states to lift liability caps, as discussed below. It should also require that companies be capable of drilling a so-called ‘relief well’ during the same drilling season—so as to stop the flow of oil in the event of a blowout, before the winter darkness and sea-ice return.

Arctic Oil: Canada’s Chance to Get it Right 36

The Arctic Council has created a Task Force on Arctic Marine Oil Pollution Prevention, which in turn created the Arctic Offshore Regulators Forum (AORF). AORF is designed to bring together offshore petroleum safety regulators to share information, best practices and experiences.166 Although this is a positive development, neither the Task Force nor AORF are mandated to take the next, essential step of negotiating an Arctic Oil Spill Prevention Agreement.

4.2 Extend the Polar Code ban on high sulfur fuel to the Arctic

Deriving its name from the coal bunkers that were once commonplace on ships, bunker fuel is the residue leftover from the crude oil refining process. Also known as heavy fuel oil (HFO), this high sulfur fuel has provided the shipping industry with cheap energy since the 1950s. While an environmental problem more generally, the threat to the marine environment and the climate is intensified in the Arctic due to remoteness, harsh conditions, a lack of infrastructure and personnel, and perhaps most importantly, the key role that snow and ice play in reflecting solar energy back into Space, thus keeping the planet cool.167

The fragile nature of the the Arctic marine environment means that a leak or spill of bunker fuel could have a serious impact. The 2009 Arctic Marine Shipping Assessment identified a HFO spill as one of the top environmental threats to the region.168 Unlike other types of fuel such as propane or gasoline, which evaporate into the atmposhere within a few days, HFOs emulsify—meaning that they expand and persist for much longer. Marine life and waterfowl are at risk of hypothermia after being coated in HFO, or being poisoned after ingesting it.169

The harsh climate and remoteness of Canada’s Arctic makes any cleanup of a major spill impracticable if not impossible. In the case of a spill during late summer, fall or winter, the cleanup attempt would likely have to wait until the sea-ice melted the next summer, during which time the oil could have been carried great distances. Further complicating matters, little is actually known of how oil interacts or spreads in the presence of sea- ice.170

The second threat posed by HFOs is black carbon: the particulate matter produced during its combustion.171 The use of bunker oil rather than low sulfur fuel significantly increases the amount of black carbon produced by a ship. When the black carbon lands on snow and ice, it reduces the ‘albedo,’ or reflectivity.172 This causes the snow and ice to melt more quickly, and as the melting progresses, the particles become more concentrated on the surface, which accelerates the melting further. When the ice or snow melts completely, the newly exposed ocean water or tundra absorbs more solar energy and grows warmer as well.

Until recently, the contributions of black carbon and other ‘short-lived climate pollutants’ (SLCPs) to climate change were largely overlooked. Although black carbon particles remain in the atmosphere for only a few weeks (whereas carbon dioxide molecules persist for years), recent research suggests that black carbon may be responsible for “25 Arctic Oil: Canada’s Chance to Get it Right 37 per cent of observed global warming over the past century.”173 There is little doubt that black carbon is a significant factor in the melting of Arctic sea-ice, glaciers and permafrost.174

The short lifespan of black carbon in the atmosphere means that reducing these emissions might be the most immediately available way to slow global warming. According to Mark Jacobson, the director of Stanford University’s Atmosphere/Energy Program, it “may be the only method of saving Arctic ice.”175 In 2009, the Arctic Council established a task force to identify the primary sources of black carbon and recommend “immediate actions.”176 Although reducing black carbon emissions anywhere on the planet would have positive consequences in the Arctic, the task force reported that reducing sources in or near the Arctic would have more of an impact there. 177 It found that the greatest sources of black carbon in the region are diesel vehicles, agricultural and prescribed forest burning, wildfires, and residential heating. It identified marine shipping as “a potentially significant source, especially in the Arctic due to its projected increase over time and its proximity to snow and ice.”178

In the lead-up to the 2011 meeting of Arctic Council ministers, US Deputy Secretary of State Jim Steinberg indicated that a specific treaty on black carbon would not be negotiated; instead, there would be a “coordinated focus” on taking “strong actions domestically.”179 Most Arctic countries do not yet have measures in place that address black carbon specifically, though they do have programs that restrict SLCP emissions and therefore indirectly black carbon.180 In 2011, the US Environmental Protection Agency (EPA) solicited proposals for research on mitigating diesel sources of black carbon in the Russian Arctic, research that will then be applicable in other Arctic countries.181

In addition, the US is leading efforts to reduce black carbon emissions beyond the Arctic. In February 2012, the US, Canada, Bangladesh, Ghana, Mexico, Sweden, and the United Nations Environment Program (UNEP) announced the creation of a Climate and Clean Air Coalition (CCAC) to Reduce Short-Lived Climate Pollutants.182 The coalition is a voluntary initiative meant to promote measures that reduce SLCPs such as black carbon, with the areas identified for “immediate action” including “heavy duty diesel vehicles and engines” and “oil and gas production.”183 In May 2012, the rest of the G8 countries (France, Germany, Italy, Japan, Russia and the UK) agreed to join the coalition.184 CCAC has since expanded to include 50 countries, 16 IGOs, and 45 NGOs and hosts a spectrum of initiatives ranging from mitigating black carbon production in bricks to financing SLCP prevention strategies.185

In 2015, the Arctic Council adopted a non-binding Framework for Action on Black Carbon and Methane, and established an expert working group to periodically assess its implementation.186 The Framework adopts a three pronged approach: it commits Arctic states to take action nationally to reduce emissions and improve data; it seeks to enhance cooperation amongst Arctic Council members, observers, and permanent participants; and it seeks to promote awareness and action among other relevant stakeholders.187

Arctic Oil: Canada’s Chance to Get it Right 38

Another step forward was the creation of Emission Control Areas (ECA) along the east and west coasts of North America and in northern Europe that require the use of low sulfur fuel.188 A study by the International Council on Clean Transportation found that similar requirements in Arctic waters would have a large and positive impact.189

Unfortunately, the IMO’s 2015 Polar Code contains a ban on HFO in Antarctic waters only. Reportedly, the exlusion of the Arctic from this ban was due to Russia, which feared that it would negatively impact transportation through the Northern Sea Route.190 But while Russia can impede or at least slowdown progress at the multilateral level, it cannot stop other countries from acting either on their own or in a coordinated manner. For this reason, Canada should extend the ban on HFO that currently applies on its east and west coasts to include its Arctic waters. It should encourage the US to follow suit, as well as Denmark, Norway, and Iceland. Canada should also ban the use of HFO anywhere in the Arctic by ships carrying its flag, or leaving from or arriving in Canadian ports. And it should encourage other countries to do likewise, since both these measures are within their powers under international law: the first on the basis of “flag state jurisdiction” and the second on the basis of “port state authority.”

5. Adopt new domestic laws and regulations

5.1 Adopt traffic separation schemes through Northwest Passage

Traffic Separation Schemes (TSSs, often referred to as ‘shipping lanes’) are employed in areas that are particularly challenging to navigate, normally due to a high density of traffic. In Canada, TSSs are created and communicated by the Coast Guard as per the Canada Shipping Act. TSSs can also be used to steer traffic around environmentally sensitive areas, or areas of importance for indigenous hunting and fishing.

Canada does not presently have TSSs in the Arctic, but will need them as shipping activity increases. There are two bases on which it could introduce them, neither of which is exclusive of the other. First, coastal states have enhanced pollution prevention powers in ice-covered waters under Article 234 of the UN Convention on the Law of the Sea:

Coastal States have the right to adopt and enforce non-discriminatory laws and regulations for the prevention, reduction and control of marine pollution from vessels in ice-covered areas within the limits of the exclusive economic zone, where particularly severe climatic conditions and the presence of ice covering such areas for most of the year create obstructions or exceptional hazards to navigation, and pollution of the marine environment could cause major harm to or irreversible disturbance of the ecological balance. Such laws and regulations shall have due regard to navigation and the protection and preservation of the marine environment based on the best available scientific evidence.191

Arctic Oil: Canada’s Chance to Get it Right 39

On the other side of the Arctic Ocean, where Article 234 also applies, Russia has already established a TSS at the Kara Gate, the main shipping point between the Barents and Kara Seas.192

However, it may be questioned whether Article 234 will continue to apply to previously ice-covered waters as they become progressively ice-free. There is nothing in Article 234 to suggest that waters that are subject to greater pollution prevention jurisdiction, because they are covered with ice for most of the year, retain that status if and when the ice disappears for lengthy periods. The rights accorded under Article 234 are not vested in any particular maritime area on an indeterminable basis but flow from the character of the ocean’s surface there.

For this reason, Canada should request the International Maritime Organization (IMO) to designate all or part of the Northwest Passage a ‘Particularly Sensitive Sea Area,’ as Australia successfully did with Torres Strait in 2005.193 It would not seem necessary for Canada to concede its internal waters position in order to seek such a designation, since ‘Particularly Sensitive Sea Areas’ can exist in different maritime zones. Of course, if the IMO wished to do so, it could state that the designation was without prejudice to any dispute over the legal status of the waterway.

The Canadian government has a Northern Marine Transportation Corridors Initiative that focuses on identifying those routes most heavily used by shipping, so as to focus its services and infrastructure there. The initiative does not concern traffic separation, nor does it currently take environmental and social factors into account.194 It cannot therefore be regarded as a substitute for TSSs.

5.2 Create meaningful Marine Protected Areas

Marine Protected Areas (MPAs) restrict commercial activity in order to conserve places of particular biological importance. A number of new MPAs are needed in Canada’s Arctic, most notably in Lancaster Sound, the principal eastern entrance to the Northwest Passage. Lancaster Sound is home to bowhead whales, beluga whales, and most of the world’s narwhals. Walrus, polar bears, ringed, bearded and harp seals, and millions of seabirds also call Lancaster Sound home. It is so biologically rich that it sometimes referred to as the ‘Serengeti of the Arctic.’195

For more than two decades, Canada and the UN Educational, Scientific and Cultural Organization (UNESCO) considered designating Lancaster Sound as a World Heritage Site.196 Such a designation could have facilitated the introduction of Traffic Separation Schemes to reduce the impact of ship noise on marine mammals. But successive Canadian governments have failed to pursue the UNESCO process to completion, perhaps because of a concern that this might provoke a challenge from the US, which opposes Canada’s Northwest Passage position.

The less controversial domestic step of designating Lancaster Sound as a ‘national marine conservation area’ (the equivalent of a national park) has also been held up for decades, Arctic Oil: Canada’s Chance to Get it Right 40 with Inuit concerns about possible limitations on hunting rights contributing to the delay.197 In 2009, the Canadian government announced that it would spend $5 million to study whether such a conservation area would be “a practical approach to sustainable management in Lancaster Sound.”198 The answer is not obvious, however, since without the international recognition that comes with a World Heritage Site designation, foreign ships might pay less attention to domestic regulations. Canada’s creation of a national marine conservation area could usefully be coupled with a renewed effort to secure UNESCO designation, thus linking the domestic designation to international recognition in a mutually supportive way.

At the same time the announcement about Lancaster Sound was made, a memorandum of understanding on Inuit participation in the feasibility study was signed between the Canadian government, the Nunavut government, and the local Inuit association. Yet little cooperation has been apparent since then.199 In 2010, the Canadian government chartered the German research icebreaker Polarstern to seismically survey the area. The Inuit, concerned about the impact of seismic waves on marine mammals, and seeing a contradiction in the Canadian government arranging for seismic studies in an area designated to be off-limits for oil and gas development, sought and received an injunction from the Nunavut Supreme Court.200 The German icebreaker, which had already crossed the Atlantic en route to Lancaster Sound, had little choice but to turn around.

Part of the Canadian government’s hesitation might have to do with the existence of old oil and gas leases. Previously, the Conservative government had proposed the creation of the Lancaster Sound marine protected area using boundaries that excluded the 30 leases once held by Shell in the area. Today, the new Liberal government says the leases remain valid, even though documents obtained by Greenpeace through a freedom of information request in early 2016 suggest that they expired decades ago and were never renewed.201 A lawsuit was filed by the World Wildlife Fund (WWF) soon after. For its part, Shell in 2014 said it would relinquish the leases if allowed to seismically survey the area beforehand.202 To resolve the uncertainty, the government should reveal any documents that prove the continued validity of the leases, or declare that they have lapsed.

Other concerns have been raised over the Canadian government allowing oil and activity within existing MPAs. For instance, the Tarium Niryutait MPA in the Beaufort Sea is made up of three separate sites at the mouth of the Mackenzie River. Oil and gas production is allowed in the smallest of the sites, with some restrictions designed to protect the local beluga population. 203 A report released by the Canadian Parks and Wilderness Society in 2015 highlighted that this is not an exception within the MPA system, with many MPAs being open to oil and gas exploration, commercial fishing, dredging, and dumping.204

Another study by the US Marine Institute looked at the percentage of ocean estate closed off entirely to economic activity (“no-take”) and found that Canada, with only 0.11 per cent full protected, lags far behind other G20 countries such as the US and the UK (both 10 per cent), South Africa and Australia (both 4 per cent), Saudi Arabia (2.14 per cent), and Russia (0.59 per cent).205 Arctic Oil: Canada’s Chance to Get it Right 41

The March 2016 joint statement by Prime Minister Trudeau and President Obama has set the stage for addressing this gap. The two leaders pledged to create a pan-Arctic network of MPAs that includes at least 17 per cent of their countries’ Arctic landmass and 10 per cent of their Arctic waters (not no-take, however) by 2020. 206 However, they did not rule out some or all of these MPAs being open to economic activity.

New MPAs need to be meaningful; they cannot allow drilling or other extractive industries. Public concern about the Arctic environment is growing, and not just among Arctic residents. Creating no-take MPAs and stronger environmental regulations more generally, are key steps towards building the social license that resource projects need.

5.3 Reintroduce same-season relief well requirement

During the 1970s and 1980s, 93 wells were drilled in the Canadian portion of the Beaufort Sea while another 40 wells were drilled among Canada’s High Arctic islands.207 At the time, Canada had a world-leading regulatory regime for Arctic offshore drilling, including a requirement—introduced in 1976—that companies be able to drill a same- season relief well.

During the 1990s, subsidies for Arctic oil and gas exploration were eliminated and no offshore drilling took place. However, as oil prices rose, companies returned to the Beaufort Sea.208 Some of the new leases have been for deep-water areas where drilling a well, whether an initial well or a relief-well, would necessarily be a multi-year exercise.209 For this reason, some of the leaseholders began lobbying the National Energy Board (NEB) for a relaxation of the same-season relief well requirement.210 After the Deepwater Horizon blowout, the companies themselves called for a pause, so that any regulatory changes could be informed by the incident.211

In 2011, the NEB issued a report into Arctic offshore drilling in which it retained the same-season relief well requirement, while adding an important loophole:

The intended outcome of the Same Season Relief Well Policy is to kill an out-of- control well in the same season in order to minimize harmful impacts on the environment. We will continue to require that any company applying for an offshore drilling authorization provides us with specific details as to how they will meet this policy. An applicant wishing to depart from our policy would have to demonstrate how they would meet or exceed the intended outcome of our policy. It would be up to us to determine, on a case-by-case basis, which tools are appropriate for meeting or exceeding the intended outcome of the Same Season Relief Well Policy. … We acknowledge that there is a continual evolution of technology worldwide, including the technology needed to kill an out-of-control well. We are open to changing and evolving technology.212

In 2014, the NEB received applications from Chevron and Imperial Oil, both of which held deep-water leases northwest of Tuktoyaktuk, to deploy alternatives to the same- Arctic Oil: Canada’s Chance to Get it Right 42 season relief well requirement.213 The NEB never finished the review process, however, because the Chevron and Imperial Oil put their plans on hold, in December 2014 and June 2015, respectively.214

Significantly, the US Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) proposed regulations in 2015 that maintained the same-season relief well requirement in waters north of Alaska.215 Norway and Denmark maintain similar rules, leaving Canada in the company of Russia on this issue.

Arctic oil is expensive oil, in part because of the short drilling season. However, cost reductions should not be obtained at the price of environmental risk. If Arctic oil is to have a future in an age of increased public concern about oil spills and climate change, the highest possible safety standards must be in place. For this reason, the Canadian government should reintroduce the same-season relief well requirement—with no exceptions.

5.4 Remove liability caps

A number of treaties govern liability for pollution from oil tankers, beginning with the 1969 International Convention on Civil Liability for Oil Pollution Damage (CLC Convention) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund Convention).216 Negotiated and managed under the umbrella of the International Maritime Organization, these treaties operate on the basis of strict liability for ship owners (i.e. liability even in the absence of fault) and create a system of compulsory liability insurance. In return, ship owners benefit from liability caps that are based on the tonnage of the vessels, with damages above the caps being compensated—up to set limits—from a fund that is supported by levies on oil shipments. In 1992, the treaties were augmented by two protocols that raised the liability limit under the CLC Convention to $139 million, and the compensation limit under the Fund Convention to $315 million.217 In 2000, the limits were raised by another 50 per cent, and in 2003 a further protocol created an optional ‘Supplementary Fund’ that raised the compensation limit to $1.2 billion for states choosing to ratify it.218

The US has not ratified any of these treaties, choosing to deal with the matter of liability entirely under domestic law. But all the other Arctic countries have ratified the updated CLC and Fund Conventions, as have Liberia and Panama, the world’s two largest shipping registries. 219 In addition, five of the Arctic countries—Canada, Denmark, Norway, Sweden and Finland—have joined the Supplementary Fund.220

As cargo ships have become larger and longer-range, oil tankers are no longer the only vessels able to cause substantial oil spills. As mentioned above, a Malaysian cargo ship broke apart and spilled 1.2 million litres of fuel oil (‘bunker oil’) while transiting Unimak Pass in 2004; almost none of the oil was recovered due to the remote location, bad weather, and the near-complete absence of oil spill clean-up equipment in the Aleutian Arctic Oil: Canada’s Chance to Get it Right 43

Islands. 221 Another treaty, the 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage, requires that ship owners carry insurance against this risk. However, Article 6 of the so-called ‘Bunker Convention’ preserves the right of ship owners and insurers to limit their liability “under any applicable national or international regime, such as the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.”222 That 1976 Convention sets liability limits that are significantly lower than the damages that could potentially result from a large spill of fuel oil in the Arctic.223

No treaty has yet been concluded to deal with liability and compensation for pollution caused by offshore oilrigs, pipelines, or sub-sea wellhead production systems. As governments struggle to address the unique challenges of regulating offshore drilling in the Arctic, one particularly important issue concerns liability caps set out in domestic laws. BP has estimated its total costs from the Deepwater Horizon blowout at approximately $41 billion, including compensation for environmental and economic damage. 224 These costs eclipsed the liability limits under US law, with the 1990 Oil Pollution Act setting a limit of just $75 million for natural resource and economic damages.225 However, the limit does not apply in cases of fault or gross negligence, and BP, rather than contesting the point, chose to waive the limit from the outset. In May 2010, Senator Lisa Murkowski of Alaska blocked a bill that would have raised the cap under the Oil Pollution Act to $10 billion.226

In the Canadian Arctic, liability for an offshore oil spill was, until 2013, limited to just $40 million by regulations adopted under the 1970 Arctic Waters Pollution Prevention Act.227 However, the matter is complicated by the fact that the 1984 Inuvialuit Final Agreement provides: “Where it is established that actual wildlife harvest loss or future harvest loss was caused by development, the liability of the developer shall be absolute and he shall be liable without proof of fault or negligence for compensation to the Inuvialuit and for the cost of mitigative and remedial measure.”228 The Inuvialuit Final Agreement applies in the Inuvialuit Settlement Area, which includes most of the Canadian portion of the Beaufort Sea.229 Nathan Vanderklippe of the Globe and Mail has written that: “the extent of liability under the Inuvialuit agreement is questionable. It applies to costs related to ‘harvest loss’ and ‘future harvest loss’ – and it’s unclear whether all spill costs would be covered.”230

While the full extent of liability under the Inuvialuit agreement remains unclear, the federal government increased the cap in 2013 from $30 million in the Atlantic, and $40 million in the Arctic, to $1 billion across the board. This cap only applies to a “no fault” liability—should operations be found to be in fault or negligent, they face unlimited liability. Then Natural Resources Minister Joe Oliver touted this increase as part of a move to a “polluter pays” model that involved strengthening the ability of governments to get compensation in the case of spills and increased the ability of regulators to levy fines.

However, the $1 billion cap is still too low, given the difficulty of operating in Canada’s Arctic, the lack of necessary equipment to contain a spill and the ecological vulnerability of the region.231 The existing liability caps on Arctic oil exploration, development, and Arctic Oil: Canada’s Chance to Get it Right 44 shipping should be eliminated. They are a form of public subsidy to the oil industry, since potential costs above the limits need not be factored into insurance costs, and therefore do not figure in assessments of the economic viability of a potential project. Liability caps prevent the full internalization of costs, and can thus promote activities that do not make economic sense from a comprehensive perspective. Eliminating liability caps will favour oil and gas companies that make safety and environmental protection integral parts of their business model. It will also help to generate the social licence that resource projects need.

5.5 Adopt a unilateral ban on heavy fuel oil in Canadian Arctic waters

The Polar Code’s ban on heavy fuel oil in the Antarctic should be extended to the Arctic, as discussed above. Indicative of efforts in this direction, Prime Minister Trudeau and President Obama have together stated that “We will determine with Arctic partners how best to address the risks posed by heavy fuel oil use and black carbon emissions from Arctic shipping.”232 However, if the current diplomatic climate is not conducive to a multilateral solution, for example should Russian opposition persist, Canada should proceed on its own or in concert with other likeminded countries like the US. Doing so would position Canada as a leader in Arctic environmental protection, and help generate the social licence that shipping and oil companies.

Conclusion

All of the above recommendations, which are based on existing knowledge, are necessary for safe and efficient oil and gas activity in Canada’s Arctic—if and when global prices rise and activity recommences. These recommendations would protect the environment and the interests of Arctic indigenous peoples, thus increasing the likelihood that projects will obtain the social license they need. They are “no-regret” recommendations, meaning that Canada’s interests would be served by them even if Arctic oil and gas activity does not resume again.

Arctic Oil: Canada’s Chance to Get it Right 45

Bibliography

Adams, Christopher. “Arctic Oil to Start Flowing from €5.6bn Polar Platform.” Financial Times. September 27, 2015. http://www.ft.com/intl/cms/s/0/1fc80a82-62ce-11e5- 9846-de406ccb37f2.html#axzz45TskSM00. Adomanis, Mark. “Russia’s ‘Import Substitution’ Isn’t Working.” Forbes International. October 15, 2015. http://www.forbes.com/sites/markadomanis/2015/10/15/russias- import-substitution-isnt- working/#634ba9f76bfehttps://dec.alaska.gov/spar/ppr/response/sum_fy06/0603023 01/factsheets/060302301_factsheet_PB.pdf. Alaska Department of Environmental Conservation. “Fact Sheet: Prudhoe Bay (BP).” Juneau, AK: n.d. https://dec.alaska.gov/spar/ppr/response/sum_fy06/060302301/factsheets/06030230 1_factsheet_PB.pdf. Arctic Council. “Russia and the Arctic Region.” Tromso, Norway: 2015. http://www.arctic-council.org/index.php/en/about-us/member-states/russian- federation. Arctic Journal. “Enhanced Black Carbon and Methane Emissions Reductions: An Arctic Council Framework for Action.” Iqaluit, 2015. http://arcticjournal.com/sites/default/files/acmmca09_iqaluit_2015_sao_report_anne x_4_tfbcm_framework_document.pdf. Azzara, Alyson, and Dan Rutherford. “Air Pollution from Marine Vessels in the U.S. High Arctic in 2025.” San Francisco, CA: The International Council on Clean Transportation 2015. http://www.theicct.org/sites/default/files/publications/ICCT_air-pollution-us-arctic- 2025_20150130.pdf. Bashir, Hassan. “Crude Awakening: The Impact of Plummeting Crude Oil Prices on Company Finances.” London: Deloitte, 2016. http://www2.deloitte.com/uk/en/pages/energy-and-resources/articles/crude- awakening.html#. BBC News. “Oil Price ‘May Hit $200 a Barrel.’” May 7, 2008. http://news.bbc.co.uk/2/hi/business/7387203.stm. BBC News. “Warming ‘Opens Northwest Passage.’” September 14, 2007. http://news.bbc.co.uk/2/hi/6995999.stm Bird, Kenneth J., Ronald R. Charpentier, Donald L. Gautier, David W. Houseknecht, Timothy R. Klett, Janet K. Pitman, Thomas E. Moore, Christopher J. Schenk, Marilyn E. Tennyson, and Craig J. Wandrey. “Circum-Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas North of the Arctic Circle.” Reston, VA: United States Geological Survey, 2008. Bloomberg Business. “New Sulfur Regulations a Challenging Paradigm Shift for Shipping.” June 19, 2015. http://www.bloomberg.com/professional/blog/new-sulfur- regulations-a-challenging-paradigm-shift-for-shipping/. Bott D., Robert. “Evolution of Canada’s Oil and Gas Industry.” Calgary, AB: Canadian Centre for Energy Information, 2004. Business Insider. “An Annotated History of Oil Prices Since 1861.” January 19, 2014. Arctic Oil: Canada’s Chance to Get it Right 46

Michael Byers. International Law and the Arctic. Cambridge: Cambridge University Press, 2013. Michael Byers. Who Owns the Arctic? Understanding Sovereignty Disputes in the North. Vancouver, BC: Douglas & McIntyre, 2010. Callow, Lin. “UPDATED: Oil and Gas Exploration & Development Activity Forecast.” Ottawa, ON: Aboriginal Affairs and Northern Development Canada, 2013. Canadian Parks and Wilderness Society. “Dare to Be Deep: Annual Report on Canada’s Progress in Protecting Our Ocean.” Ottawa, ON: n.d. http://cpaws.org/uploads/CPAWS_DareDeep2015_v10singleLR.pdf. Casey, Kevin. “Greenland’s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off.” The Arctic Institute. January 20, 2014. http://www.thearcticinstitute.org/2014/01/greenlands-new-frontier-oil-and-gas.html. CBC News. “Alaskan Oil Spill 8 Times Worse than Thought: Official.” December 30, 2004. http://www.cbc.ca/news/world/alaskan-oil-spill-8-times-worse-than-thought- official-1.517920. CBC News. “Environmental Group Files Lawsuit over ‘Expired’ Shell Arctic Oil Permits.” April 12, 2016. http://www.cbc.ca/news/canada/north/shell-arctic-oil- lawsuit-1.3531597. CBC News. “Imperial Oil, BP Delay Beaufort Sea Drilling Plans Indefinitely.” June 26, 2015. http://www.cbc.ca/news/canada/north/imperial-oil-bp-delay-beaufort-sea- drilling-plans-indefinitely-1.3129505. CBC News. “Ottawa Awards BP $1.2B in Exploration Permits in Beaufort Sea.” June 9, 2008. http://www.cbc.ca/news/canada/north/ottawa-awards-bp-1-2b-in-exploration- permits-in-beaufort-sea-1.697101. Inuvialuit Regional Corp. “Inuvialuit Final Agreement,” 2007. http://www.irc.inuvialuit.com/about/finalagreement.html. Crooks, Ed. “Fresh Doubts about Shell’s Alaska Plans.” Financial Times. February 12, 2013. http://www.ft.com/intl/cms/s/e1308b78-74f0-11e2-8bc7- 00144feabdc0,Authorised=false.html?siteedition=intl&_i_location=http%3A%2F% 2Fwww.ft.com%2Fcms%2Fs%2F0%2Fe1308b78-74f0-11e2-8bc7- 00144feabdc0.html%3Fsiteedition%3Dintl&_i_referer=&classification=conditional _standard&iab=barrier-app#axzz44Ut7sLx3. Cunningham, Nick. “Low Oil Prices Undercut Arctic Oil Ambitions.” The Fuse, November 2015. Dawson, Chester. “Exxon Mobil, BP Suspend Canadian Arctic Exploratory Drilling Program in Beaufort Sea.” The Wall Street Journal. June 26, 2015. http://www.wsj.com/articles/exxon-mobil-bp-suspend-canadian-arctic-exploratory- drilling-program-in-beaufort-sea-1435348381. Dawson, Chester. “Arctic Shipping Volume Rises as Ice Melts.” The Wall Street Journal. 29 October 2. http://www.wsj.com/articles/arctic-cargo-shipping-volume-is-rising- as-ice-melts-1414612143014. Dodds, Klaus J. “The WikiLeaks Arctic Cables.” Polar Record 48, no. 2 (2012): 199– 201. Domsdorf, Clemens. “Greenland Votes to Get Tough on Investors.” The Wall Street Journal. March 13, 2013. http://www.wsj.com/articles/SB10001424127887324077704578357792781721964. Arctic Oil: Canada’s Chance to Get it Right 47

Ducharme, Steve. “Shell’s Oil Permits near Lancaster Sound Still Valid, INAC Says.” Nunatsiaq News. April 11, 2016. http://www.nunatsiaqonline.ca/stories/article/65674shells_oil_permits_near_lancaste r_sound_still_valid_inac_says/. Dutton, Joseph. “Norway May Open Lofoten Islands to Oil and Gas.” Arctic Deeply, February 15, 2016. https://www.newsdeeply.com/arctic/op-eds/2016/02/15/norway- may-open-lofoten-islands-to-oil-and-gas. Dyer, Evan. “Obama and Trudeau Pledge to Protect a Warming Arctic.” CBC News. March 11, 2016. http://www.cbc.ca/news/politics/us-canada-arctic-protection- 1.3486062. Galucci, Maria. “US Shale Oil Boom: When It Comes To CO2 Emissions, Not All Crude Oil Is Created Equal.” International Business Times. November 3, 2015. http://www.ibtimes.com/us-shale-oil-boom-when-it-comes-co2-emissions-not-all- crude-oil-created-equal-1843616. Gordon, Deborah, Adam Brandt, Joule Bergerson, and Jonathan Koomey. “Know Your Oil: Creating a Global Oil-Climate Index.” Washington, DC: Carnegie Endowment for International Peace, 2015. http://carnegieendowment.org/2015/03/11/know-your- oil-creating-global-oil-climate-index/i3oy#. Government of the Northwest Territories. “History of Oil and Gas in the NWT (Archived).” 2011. http://www.iti.gov.nt.ca/mineralsoilgas/historyoilgas.shtml. Graff, James. “Arctic: Fight for the Top of the World.” Time. New York, NY, October 2007. http://content.time.com/time/magazine/article/0,9171,1663848,00.html. Gray, David H. “Canada’s Unresolved Maritime Boundaries.” IBRU Boundary and Security Bulletin, 1997, 61–79. Griffiths, Sian. “US-Canada Arctic Border Dispute Key to Maritime Riches.” BBC News. August 2, 2010. http://www.bbc.com/news/world-us-canada-10834006. Hamilton, James D. “Causes and Consequences of the Oil Shock of 2007-08.” Brookings Papers on Economic Activity Spring (2009): 215–83. Henderson, James, and Julia Loe. The Prospects and Challenges for Arctic Oil Development. OIES Paper: WPM 54. Oxford: Oxford Institute for Energy Studies, 2014. http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/11/WPM- 56.pdf. Hoag, Hannah. “Arctic Development Stalls With Tumbling Oil Prices.” Huffington Post. January 22, 2016. http://www.huffingtonpost.com/entry/arctic-development- stalls_us_56a2b40be4b076aadcc6c444. Holleman, Marybeth. “After 25 Years, Exxon Valdez Oil Spill Hasn’t Ended.” CNN News. March 25, 2014. http://www.cnn.com/2014/03/23/opinion/holleman-exxon- valdez-anniversary/. Holter, Mikael. “Exxon, Rosneft Scrap Arctic Deals as Russia Sanctions Bite.” Bloomberg Business. December 1, 2014. http://www.bloomberg.com/news/articles/2014-12-01/exxon-rosneft-scrap-arctic- contracts-as-russia-sanctions-bite. Jones, Jeffrey. “NEB to Rule on Relief-Well Alternatives for Arctic Drilling Projects.” The Globe and Mail. July 11, 2014. http://www.theglobeandmail.com/report-on- business/neb-to-rule-on-relief-well-alternatives-for-arctic-drilling- projects/article19574884/. Arctic Oil: Canada’s Chance to Get it Right 48

Khrennikova, Dina, and Andrey Lemeshko. “Sanctions Don’t Bar Oil-Service Giants Bidding in Arctic.” Bloomberg Business. February 16, 2015. http://www.bloomberg.com/news/articles/2015-02-17/sanctions-don-t-bar-oil- service-giants-bidding-in-russian-arctic. Krauss, Clifford. “Oil Prices: What’s Behind the Drop? Simple Economics.” The New York Times. April 29, 2016. http://www.nytimes.com/interactive/2016/business/energy-environment/oil- prices.html?_r=0. Macalister, Terry. “Plug Pulled on Russia’s Flagship Shtokman Energy Project.” The Guardian. August 29, 2012. http://www.theguardian.com/world/2012/aug/29/shtokman-russia-arctic-gas-shale. Macalister, Terry. “Shell Abandons Alaska Arctic Drilling.” The Guardian. September 28, 2015. http://www.theguardian.com/business/2015/sep/28/shell-ceases-alaska- arctic-drilling-exploratory-well-oil-gas-disappoints. Manley-Casimir, Kirsten. “Reconciliation, Indigenous Rights and Offshore Oil and Gas Development in the Canadian Arctic.” Review of European Community & International Environmental Law 20, no. 1 (2011): 29–39. Marshall, Christa. “Oil and Gas Production Drives Arctic Ice Melt.” Scientific American. New York, NY, 2013. http://www.scientificamerican.com/article/oil-and-gas- production-drives-arctic-ice-melt/. McCarthy, Shawn. “Canada Raises Liability for Offshore Oil Spills to $1-Billion.” The Globe and Mail. June 18, 2013. http://www.theglobeandmail.com/report-on- business/canada-raises-liability-for-offshore-oil-spills-to-1-billion/article12647765/. McCarthy, Shawn. “NEB Set to Allow Alternative for Relief-Well Rule in Arctic.” The Globe and Mail. December 15, 2011. http://www.theglobeandmail.com/report-on- business/industry-news/energy-and-resources/neb-set-to-allow-alternative-for-relief- well-rule-in-arctic/article554429/. McCarthy, Shawn. “Oil giants contest Arctic relief well requirement.” The Globe and Mail. April, 5 2011. http://www.theglobeandmail.com/report-on-business/industry- news/energy-and-resources/oil-giants-contest-arctic-relief-well- requirement/article582755/. McGwin, Kevin. “A Farewell to Cairn?” The Arctic Journal. August 19, 2014. http://arcticjournal.com/oil-minerals/907/farewell-cairn. McGwin, Kevin. “Full Polar Code in Place, but Gaps Remain.” The Arctic Journal. May 15, 2015. http://arcticjournal.com/climate/1588/full-polar-code-place-gaps-remain. McKenzie-Brown, Peter. “History of the Petroleum Industry in Canada, Part Two.” Language Matters: Studies in Energy, History and Language, 2007. http://languageinstinct.blogspot.ca/search?q=panarctic. Milne, Richard. “Russia Sanctions Fail to Block Norwegian Deal with Rosneft.” Financial Times. August 1, 2014. http://www.ft.com/intl/cms/s/0/12e3003a-18c2- 11e4-a51a-00144feabdc0.html#axzz47X04dHda. Movchan, Andrey. “Just an Oil Company? The True Extent of Russia’s Dependency on Oil and Gas.” Carnegie Endowment for International Peace. September 14, 2015. http://carnegieendowment.org/2015/09/14/just-oil-company-true-extent-of-russia-s- dependency-on-oil-and-gas/ihtg. Arctic Oil: Canada’s Chance to Get it Right 49

National Energy Board. “Review of Offshore Drilling in the Canadian Arctic.” Calgary, AB: 2011. https://www.neb- one.gc.ca/nrth/rctcffshrdrllngrvw/2011fnlrprt/2011fnlrprt-eng.pdf. National Transportation Safety Board. “Marine Accident Brief: Grounding of Mobile Offshore Drilling Unit Kulluk.” Washington, DC: 2015. NOAA Office of Response and Restoration. “How Oil Harms Animals and Plants in Marine Environments.” Silver Spring, MD: n.d. http://response.restoration.noaa.gov/oil-and-chemical-spills/oil-spills/how-oil- harms-animals-and-plants-marine-environments.html. Northern Oil and Gas Directorate Indian and Northern Affairs Canada. “Petroleum Exploration in Northern Canada: A Guide to Oil and Gas Exploration and Potential.” Ottawa, ON: 1995. Norwegian Ministry of Energy and Petroleum. “Norway’s Oil History.” Oslo: 2013. https://www.regjeringen.no/en/topics/energy/oil-and-gas/norways-oil-history-in-5- minutes/id440538/. Nunatsiaq News. “Federal Audit Slams Canada’s Performance on Arctic Marine Safety.” October 8, 2014. http://www.nunatsiaqonline.ca/stories/article/65674canada_ill- prepared_for_increased_arctic_shipping_traffic_federal_audi/. Paris, Costas. “U.N. Agency Adopts Polar Code to Prevent Sea Pollution.” The Wall Street Journal. May 15, 2015. http://www.wsj.com/articles/u-n-agency-adopts- polar-code-to-prevent-sea-pollution-1431711578. Pettersen, Trude. “Russia Launches Program on Arctic Development to 2020.” Barents Observer. February 20, 2013. http://barentsobserver.com/en/arctic/2013/02/russia- launches-program-arctic-development-2020-20-02. Pike, E.P., K.L.P. Shugart-Schmidt, V.R. Saccomanno, and L.E. Morgan. “Sea States: G20.” Seattle, WA: Marine Conservation Institute, 2014. https://marine- conservation.org/media/filer_public/filer_public/2014/11/17/mci_seastates_g20_201 4.pdf. Polar Record. “Panarctic Oils Limited, Canada: Establishment and Field Work in 1968.” Polar Record 14, no. 92 (1969): 643–44. doi:http://dx.doi.org/10.1017/S0032247400064974. Prime Minister’s Office. “U.S.-Canada Joint Statement on Climate, Energy, and Arctic Leadership.” Ottawa, ON: 2016. Reed, Stanley. “Stung by Low Oil Prices, BP Will Cut 4,000 Jobs.” The New York Times. January 12, 2016. http://www.nytimes.com/2016/01/13/business/energy- environment/bp-jobs-oil-prices.html. Reuters. “Norway Redefines Arctic Ice Edge in Potential Boost for Oil Exploration.” January 20, 2015. http://www.reuters.com/article/norway-oil-arctic- idUSL6N0UZ0L020150120. Santos-Pedro, V.M., K. Juurmaa, and L. Brigham. “Arctic Marine Shipping Assessment 2009 Report.” Tromsø, Norway: Arctic Council, PAME. http://www.arctic.noaa.gov/detect/documents/AMSA_2009_Report_2nd_print.pdf. Schlindwien, Simone, and Gerald Traufetter. “Race for the North Pole: Nations Vying for Arctic Treasures.” Der Spiegel. August 21, 2007. http://www.spiegel.de/international/world/race-for-the-north-pole-nations-vying-for- arctic-treasures-a-501034.html. Arctic Oil: Canada’s Chance to Get it Right 50

Scott, Michon, and Rebecca Lindsey. “Arctic Sea Ice Getting Thinner, Younger.” National Oceanic and Atmospheric Administration, 2012. https://www.climate.gov/about. Staalesen, Atle. “Gazprom Postpones Barents Sea Drilling.” Barents Observer. September 16, 2015. http://barentsobserver.com/en/energy/2015/09/gazprom- postpones-barents-sea-drilling-16-09. Statoil. “Snøhvit.” http://www.statoil.com/en/OurOperations/ExplorationProd/ncs/snoehvit/Pages/defau lt.aspx. Stephenson, Scott R., Laurence C. Smith, and John A. Agnew. “Divergent Long-Term Trajectories of Human Access to the Arctic.” Nature Climate Change 1 (2011): 156–60. http://www.nature.com/nclimate/journal/v1/n3/abs/nclimate1120.html. The Daily Mail. “Putin’s Arctic Invasion: Russia Lays Claim to the North Pole – and All Its Gas, Oil and Diamonds.” June 29, 2007. http://www.dailymail.co.uk/news/article-464921/Putins-Arctic-invasion-Russia- lays-claim-North-Pole--gas-oil-diamonds.html. The Economist. “Gold Rush under the Ice.” London, August 2007. http://www.economist.com/node/9607005. The Economist. “Why the Oil Price Is Falling.” London, December 2014. http://www.economist.com/blogs/economist-explains/2014/12/economist-explains-4 Treaty between the Kingdom of Norway and the Russian Federation Concerning Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean. Norway-Russia, 2010. https://www.regjeringen.no/globalassets/upload/ud/vedlegg/folkerett/avtale_engelsk. pdf. US Bureau of Ocean Energy Management. “Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf.” Washington, DC: 2011. http://www.boem.gov/2011-National-Assessment- Factsheet/. US Bureau of Safety and Environmental Enforcement. “BSEE, BOEM Issue Proposed Regulations to Ensure Safe and Responsible Exploratory Drilling Offshore Alaska.” Washington, DC: 2015. http://www.bsee.gov/arcticstandards/. US Bureau of Safety and Environmental Enforcement. “BSEE Participates in Arctic Offshore Regulators Forum Meeting in Washington.” Washington, DC: 2015. http://www.bsee.gov/BSEE-Newsroom/BSEE-News-Briefs/2015/BSEE- Participates-in-Arctic-Offshore-Regulators-Forum-Meeting-in-Washington/. US National Response Team. “On Scene Coordinator Report Deepwater Horizon Oil Spill.” Washington, DC, 2011. US National Snow & Ice Data Center. “All About Sea Ice.” Boulder, CO: n.d. https://nsidc.org/cryosphere/seaice/characteristics/index.html. Vasilyeva, Nataliya. “Russia Oil Spills Wreak Devastation.” Associated Press. December 17, 2011. http://archive.boston.com/business/articles/2011/12/17/ap_enterprise_russia_oil_spil ls_wreak_devastation/. Vidal, John. “Greenpeace Head Kumi Naidoo Arrested over Oil Rig Protest.” The Guardian. June 17, 2011. Arctic Oil: Canada’s Chance to Get it Right 51

http://www.theguardian.com/environment/2011/jun/17/greenpeace-kumi-naidoo- arrest-oil-rig. Vodden, C., and L.A. Frieday. “Geological Survey of Canada.” The Canadian Encyclopedia, 2006. http://www.thecanadianencyclopedia.ca/en/article/geological- survey-of-canada/. Walters, Joanna. “Exxon Valdez - 25 Years after the Alaska Oil Spill, the Court Battle Continues.” The Telegraph. March 23, 2014. http://www.telegraph.co.uk/news/worldnews/northamerica/usa/10717219/Exxon- Valdez-25-years-after-the-Alaska-oil-spill-the-court-battle-continues.html. Warren, Sherry, Thomas Puestow, Martin Richard, and Bill Jefferies. “Oil Spill and Modeling in the Hudson and Davis Straits.” St. John’s, NL: Nunavut Planning Commission, 2014. http://www.nunavut.ca/files/2014-05-29 Oil Spill Detection and Modelling Report.pdf. Weber, Bob. “Obama, Trudeau Further Some Arctic Goals but Miss Others: Experts.” iPolitics. March 10, 2016. http://ipolitics.ca/2016/03/10/obama-trudeau-further- some-arctic-goals-but-miss-others-experts/. Wile, Rob. “The American Shale Boom Has Steamrolled Over Alaska.” Business Insider. August 13, 2013. http://www.businessinsider.com/major-decline-in-alaska-oil- production-2013-8. Windeyer, Chris. “Proposed U.S. Beaufort Sea Drilling Leases Infringe on Canada’s Sovereignty, Says Yukon.” CBC News. 2016. http://www.cbc.ca/news/canada/north/proposed-beaufort-licences-infringe-arctic- sovereignty-1.3498469. Wonders, William C. Canada’s Changing North, Revised Edition. Montreal & Kingston: McGill - Queen’s University Press, 2003. World Oil. “Eni Starts Production at Goliat Field in Barents Sea.” March 13, 2016. World Wildlife Fund. “Lessons Not Learned: 20 Years After the Exxon Valdez Disaster.” Washington, DC: 2009. Zakzouk, Mohamed, and Emmanuel Preville. “Status of Oil and Gas Development in Northern Canada.” Ottawa, ON: Library of Parliament: Industry, Infrastructure & Resources Division, 2012. http://www.lop.parl.gc.ca/content/lop/ResearchPublications/2012-04-e.htm. Zerehi, Sima Sahar. “Clyde River Granted Leave to Appeal to Supreme Court on Seismic Testing.” CBC News. March 10, 2016. http://www.cbc.ca/news/canada/north/clyde- river-granted-appeal-1.3484968.

Arctic Oil: Canada’s Chance to Get it Right 52

Endnotes

1 GNWT, “History of Oil and Gas in the NWT (Archived),” Department of Industry, Tourism and Investment, 2011, available at: http://archive.is/51fKZ. 2 C. Vodden and L.A. Frieday, “Geological Survey of Canada,” The Canadian Encyclopedia, 2006. 3 Peter McKenzie-Brown, “History of the Petroleum Industry in Canada, Part Two,” Language Matters: Studies in energy, history and language, available at: http://languageinstinct.blogspot.se/search?q=panarctic. 4 William C. Wonders, Canada’s Changing North, Revised Edition, Montreal & Kingston: McGill - Queen’s University Press, 2003. 5 Kirsten Manley-Casimir, “Reconciliation, Indigenous Rights and Offshore Oil and Gas Development in the Canadian Arctic,” Review of European Community & International Environmental Law 20.1 (2011). 6 Lin Callow, UPDATED: Oil and Gas Exploration & Development Activity Forecast, Ottawa, ON: 2013. 7 “Panarctic Oils Limited, Canada: Establishment and Field Work in 1968,” Polar Record 14.92 (1969): 643–644, Web. 8 Callow, UPDATED: Oil and Gas Exploration & Development Activity Forecast. 9 “Panarctic Oils Limited, Canada: Establishment and Field Work in 1968.” 10 Callow, UPDATED: Oil and Gas Exploration & Development Activity Forecast. 11 Manley-Casimir, “Reconciliation, Indigenous Rights and Offshore Oil and Gas Development in the Canadian Arctic.” 12 Robert D. Bott, Evolution of Canada’s Oil and Gas Industry, Calgary, AB: 2004. 13 Inuvialuit Regional Corp., “Inuvialuit Final Agreement,” 2007, available at: http://www.irc.inuvialuit.com/about/finalagreement.html. 14 Callow, UPDATED: Oil and Gas Exploration & Development Activity Forecast. 15 Ibid. 16 Ibid. 17 Michael Byers, International Law and the Arctic, Cambridge: Cambridge University Press, 2013. 18 Ibid. 19 Mohamed Zakzouk and Emmanuel Preville, Status of Oil and Gas Development in Northern Canada, Ottawa, ON: 2012, available at: http://www.lop.parl.gc.ca/content/lop/ResearchPublications/2012-04-e.htm. 20 Ibid. 21 Shawn McCarthy, “NEB Set to Allow Alternative for Relief-Well Rule in Arctic,” The Globe and Mail, 15 Dec. 2011, available at: http://www.theglobeandmail.com/report-on- business/industry-news/energy-and-resources/neb-set-to-allow-alternative-for-relief-well-rule-in- arctic/article554429/. 22 “Review of Offshore Drilling in the Canadian Arctic,” Calgary, AB, 2011, available at: https://www.neb-one.gc.ca/nrth/rctcffshrdrllngrvw/2011fnlrprt/2011fnlrprt-eng.pdf. 23 Byers, International Law and the Arctic. 24 Chester Dawson, “Exxon Mobil, BP Suspend Canadian Arctic Exploratory Drilling Program in Beaufort Sea,” The Wall Street Journal, 26 June 2015, available at: http://www.wsj.com/articles/exxon-mobil-bp-suspend-canadian-arctic-exploratory-drilling- program-in-beaufort-sea-1435348381. Arctic Oil: Canada’s Chance to Get it Right 53

25 James Henderson and Julia Loe, The Prospects and Challenges for Arctic Oil Development, Oxford: Oxford Institute for Energy Studies, 2014. 26 “Gold Rush under the Ice,” The Economist Aug. 2007, http://www.economist.com/node/9607005. 27 Kenneth J. Bird et al., Circum-Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas North of the Arctic Circle, Reston, VA: USGS, 2008. 28 Trude Pettersen, “Russia Launches Program on Arctic Development to 2020,” Barents Observer 20 Feb. 2013, available at: http://barentsobserver.com/en/arctic/2013/02/russia- launches-program-arctic-development-2020-20-02. 29 The State Program for Social and Economic Development of the Arctic Zone of the Russian Federation until the Year 2020, available here (in Russian): http://government.ru/media/files/41d4d600d9800a20c26f.pdf. 30 “Russia and the Arctic Region,” Arctic Council, 2015, available at: http://www.arctic- council.org/index.php/en/about-us/member-states/russian-federation. 31 Andrey Movchan, “Just an Oil Company? The True Extent of Russia’s Dependency on Oil and Gas,” Carnegie Endowment for International Peace, 14 Sept. 2015, available at: http://carnegieendowment.org/2015/09/14/just-oil-company-true-extent-of-russia-s-dependency- on-oil-and-gas/ihtg. 32 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 33 Bird et al., Circum-Arctic Resource Appraisal. 34 Terry Macalister, “Plug Pulled on Russia’s Flagship Shtokman Energy Project,” The Guardian 29 Aug. 2012, available at: http://www.theguardian.com/world/2012/aug/29/shtokman-russia- arctic-gas-shale. 35 Mikael Holter, “Exxon, Rosneft Scrap Arctic Deals as Russia Sanctions Bite,” Bloomberg Business 1 Dec. 2014, available at: http://www.bloomberg.com/news/articles/2014-12-01/exxon- rosneft-scrap-arctic-contracts-as-russia-sanctions-bite. 36 Dina Khrennikova and Andrey Lemeshko, “Sanctions Don’t Bar Oil-Service Giants Bidding in Arctic,” Bloomberg Business 16 Feb. 2015, available: http://www.bloomberg.com/news/articles/2015-02-17/sanctions-don-t-bar-oil-service-giants- bidding-in-russian-arctic. 37 Richard Milne, “Russia Sanctions Fail to Block Norwegian Deal with Rosneft,” Financial Times, 1 Aug. 2014, available at: http://www.ft.com/intl/cms/s/0/12e3003a-18c2-11e4-a51a- 00144feabdc0.html#axzz47X04dHda. 38 Mark Adomanis, “Russia’s ‘Import Substitution’ Isn’t Working,” Forbes International 15 Oct. 2015, available at: http://www.forbes.com/sites/markadomanis/2015/10/15/russias-import- substitution-isnt-working/#634ba9f76bfe. 39 Fact Sheet: Prudhoe Bay (BP). Juneau, AK: Alaska Department of Environmental Conservation available at: https://dec.alaska.gov/spar/ppr/response/sum_fy06/060302301/factsheets/060302301_factsheet_P B.pdf. 40 Rob Wile, “The American Shale Boom Has Steamrolled Over Alaska,” Business Insider 13 Aug. 2013, available at: http://www.businessinsider.com/major-decline-in-alaska-oil-production- 2013-8. 41 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 42 Ibid. 43 Bird et al., Circum-Arctic Resource Appraisal. 44 US Bureau of Ocean Energy Management, “Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf,” Washington, DC, 2011, available at: http://www.boem.gov/2011-National-Assessment-Factsheet/. 45 Ed Crooks, “Fresh Doubts about Shell’s Alaska Plans,” Financial Times 12 Feb. 2013. Arctic Oil: Canada’s Chance to Get it Right 54

46 National Transportation Safety Board, “Marine Accident Brief: Grounding of Mobile Offshore Drilling Unit Kulluk, NTSB/MAB-15/10, 16 June 2015, available at: http://www.ntsb.gov/investigations/AccidentReports/Reports/MAB1510.pdf . 47 Terry Macalister, “Shell Abandons Alaska Arctic Drilling,” The Guardian 28 Sept. 2015, available at: http://www.theguardian.com/business/2015/sep/28/shell-ceases-alaska-arctic- drilling-exploratory-well-oil-gas-disappoints. 48 Jennifer A Dlouhy, “Big Oil Abandons 2.5 Billion in US Arctic Drilling Rights,” Bloomberg 9 May 2016, available at: http://www.bloomberg.com/news/articles/2016-05-10/big-oil-abandons- 2-5-billion-in-u-s-arctic-drilling-rights. 49 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 50 Casey, Kevin. Greenland’s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off. Washington, DC: N.p., 2014, available at: http://www.thearcticinstitute.org/2014/01/greenlands-new-frontier-oil-and-gas.html. 51 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 52 Byers, International Law and the Arctic. 53 Kevin Casey, “Greenland’s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off,” The Arctic Institute 20 Jan. 2014, available at: http://www.thearcticinstitute.org/2014/01/greenlands-new-frontier-oil-and-gas.html. 54 John Vidal, “Greenpeace Head Kumi Naidoo Arrested over Oil Rig Protest,” The Guardian, 17 June 2011, available at: http://www.theguardian.com/environment/2011/jun/17/greenpeace-kumi- naidoo-arrest-oil-rig. 55 Clemens Domsdorf, “Greenland Votes to Get Tough on Investors,” The Wall Street Journal, 13 Mar. 2013, available at: http://www.wsj.com/articles/SB10001424127887324077704578357792781721964. 56 Klaus J. Dodds, “The WikiLeaks Arctic Cables,” Polar Record 48.2 (2012). 57 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 58 Ibid. 59 Ministry of Petroleum and Energy, “Norway’s Oil History,” 2013, available at: https://www.regjeringen.no/en/topics/energy/oil-and-gas/norways-oil-history-in-5- minutes/id440538/. 60 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 61 Byers, International Law and the Arctic. 62 Ibid. 63 Joseph Dutton, “Norway May Open Lofoten Islands to Oil and Gas,” 15 Feb. 2016, available at: https://www.newsdeeply.com/arctic/op-eds/2016/02/15/norway-may-open-lofoten-islands-to- oil-and-gas. 64 “Snøhvit.” Statoil, available at: http://www.statoil.com/en/OurOperations/ExplorationProd/ncs/snoehvit/Pages/default.aspx. 65 “Eni Starts Production at Goliat Field in Barents Sea,” World Oil, 13 Mar. 2016, available at: http://www.worldoil.com/news/2016/3/13/eni-starts-production-at-goliat-field-in-barents-sea. 66 2010 Treaty between the Kingdom of Norway and the Russian Federation concerning Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean, English translation available at: http://www.regjeringen.no/upload/ud/vedlegg/folkerett/avtale_engelsk.pdf. 67 “All About Sea Ice,” Boulder, CO: US Snow & Ice Data Center, available at: https://nsidc.org/cryosphere/seaice/characteristics/index.html. 68 Ibid. 69 Michon Scott and Rebecca Lindsey, “Arctic Sea Ice Getting Thinner, Younger,” National Oceanic and Atmospheric Administration, 2012, available at: https://www.climate.gov/news- features/features/arctic-sea-ice-getting-thinner-younger. Arctic Oil: Canada’s Chance to Get it Right 55

70 Scott R. Stephenson, Laurence C. Smith, and John A. Agnew, “Divergent Long-Term Trajectories of Human Access to the Arctic,” Nature Climate Change, 1 (2011): 156-160. 71 “Norway Redefines Arctic Ice Edge in Potential Boost for Oil Exploration,” Reuters, 20 Jan. 2015, available at: http://www.reuters.com/article/norway-oil-arctic-idUSL6N0UZ0L020150120. 72 James D. Hamilton, “Causes and Consequences of the Oil Shock of 2007-08,” Brookings Papers on Economic Activity Spring (2009): 215–283. 73 “An Annotated History of Oil Prices Since 1861.” Business Insider 19 Jan. 2014: available at: http://www.businessinsider.com/annotated-history-crude-oil-prices-since-1861-2014-12. 74 “Oil Price ‘May Hit $200 a Barrel,’” BBC News 7 May 2008, available at: http://news.bbc.co.uk/2/hi/business/7387203.stm. 75 Nick Cunningham, “Low Oil Prices Undercut Arctic Oil Ambitions,” The Fuse Nov. 2015, available at: http://energyfuse.org/low-oil-prices-undercut-arctic-oil-dreams/. 76 “Ottawa Awards BP $1.2B in Exploration Permits in Beaufort Sea,” CBC News 9 June 2008, available at: http://www.cbc.ca/news/canada/north/ottawa-awards-bp-1-2b-in-exploration- permits-in-beaufort-sea-1.697101. 77 Paul Reynolds, “Russia ahead in Arctic ‘gold rush’,” BBC News, 1 Aug. 2007, available at: http://news.bbc.co.uk/2/hi/6925853.stm. 78 “Canada rejects flag-planting as ‘just a show’,” Independent Online, 3 Aug. 2012, available at: http://www.iol.co.za/news/world/canada-rejects-flag-planting-as-just-a-show- 1.364759#.UHgzYo4_5UQ. 79 Scott Borgerson, “Arctic Meltdown,” (2008) 87 Foreign Affairs 63, available at: http://www.foreignaffairs.com/articles/63222/scott-g-borgerson/arctic-meltdown. 80 James Graff “Arctic: Fight for the Top of the World,” Time Oct. 2007, available at: http://content.time.com/time/magazine/article/0,9171,1663848,00.html. 81 Simone Schlindwien and Gerald Traufetter, “Race for the North Pole: Nations Vying for Arctic Treasures,” Der Spiegel, 21 Aug. 2007, available at: http://www.spiegel.de/international/world/race-for-the-north-pole-nations-vying-for-arctic- treasures-a-501034.html. 82 “Putin’s Arctic Invasion: Russia Lays Claim to the North Pole – and All Its Gas, Oil and Diamonds,” The Daily Mail, 29 June 2007, available at: http://www.dailymail.co.uk/news/article- 464921/Putins-Arctic-invasion-Russia-lays-claim-North-Pole--gas-oil-diamonds.html. 83 Adrian Blomfield, “US rises to Kremlin bait,” The Telegraph, 4 Aug. 2007, available at: http://www.telegraph.co.uk/news/worldnews/1559444/US-rises-to-Kremlin-bait.html 84 “The Ilulissat Declaration,” 29 May 2008, available at: http://byers.typepad.com/arctic/ilulissat- declaration-may-28-2008.html. 85 “Hillary Clinton criticises Canada over Arctic talks,” BBC News, 30 March 2010, available at: http://news.bbc.co.uk/2/hi/8594291.stm. 86 2010 Treaty between the Kingdom of Norway and the Russian Federation concerning Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean, English translation available at: http://www.regjeringen.no/upload/ud/vedlegg/folkerett/avtale_engelsk.pdf. 87 Statement on Canada’s Arctic Foreign Policy, 20 Aug. 2010, available at: http://www.international.gc.ca/polar-polaire/assets/pdfs/CAFP_booklet-PECA_livret-eng.pdf. 88 Bird et al., Circum-Arctic Resource Appraisal. 89 Donald L. Gautier et al., “Assessment of Undiscovered Oil and Gas in the Arctic,” (May 2009) 324 (5931) Science 1175. 90 Marybeth Holleman, “After 25 Years, Exxon Valdez Oil Spill Hasn’t Ended,” CNN, 25 Mar. 2014, available at: http://www.cnn.com/2014/03/23/opinion/holleman-exxon-valdez-anniversary/. 91 “Alaskan Oil Spill 8 Times Worse than Thought: Official,” CBC News, 30 Dec, available at: http://www.cbc.ca/news/world/alaskan-oil-spill-8-times-worse-than-thought-official-1.517920; Arctic Oil: Canada’s Chance to Get it Right 56

for the full accident brief see: http://www.ntsb.gov/investigations/AccidentReports/Reports/MAB0601.pdf. 92 On Scene Coordinator Report Deepwater Horizon Oil Spill, Washington, DC: 2011, available at: http://www.nrt.org/Production/NRT/NRTWeb.nsf/AllPagesByTitle/P- AboutNRT?Opendocument. 93 “Federal Audit Slams Canada’s Performance on Arctic Marine Safety,” Nunatsiaq News, 8 Oct. 2014, available at: http://www.nunatsiaqonline.ca/stories/article/65674canada_ill- prepared_for_increased_arctic_shipping_traffic_federal_audi/. 94 Nataliya Vasilyeva, “Russia Oil Spills Wreak Devastation,” Associated Press, 17 Dec. 2011, available at: http://archive.boston.com/business/articles/2011/12/17/ap_enterprise_russia_oil_spills_wreak_de vastation/. 95 Joanna Walters, “Exxon Valdez - 25 Years after the Alaska Oil Spill, the Court Battle Continues,” The Telegraph, 23 Mar. 2014, available at: http://www.telegraph.co.uk/news/worldnews/northamerica/usa/10717219/Exxon-Valdez-25- years-after-the-Alaska-oil-spill-the-court-battle-continues.html. 96 “Lessons Not Learned: 20 Years After the Exxon Valdez Disaster,” Washington, DC, WWF, 2009. 97 Lindy Weilgart, “A review of the impacts of seismic airgun surveys on marine life,” Submitted to the CBD Expert Workshop on Underwater Noise and its Impacts on Marine and Coastal Biodiversity, 25-27 February 2014, London: available at: http://www.cbd.int/doc/?meeting=MCBEM-2014-01. 98 Sima Sahar Zerehi, “Clyde River Granted Leave to Appeal to Supreme Court on Seismic Testing,” 10 Mar. 2016, available at: http://www.cbc.ca/news/canada/north/clyde-river-granted- appeal-1.3484968. 99 Deborah Gordon et al., Know Your Oil: Creating a Global Oil-Climate Index, Washington, DC: 2015. 100 Maria Galucci, “US Shale Oil Boom: When It Comes To CO2 Emissions, Not All Crude Oil Is Created Equal,” International Business Times, 3 Nov. 2015, available at: http://www.ibtimes.com/us-shale-oil-boom-when-it-comes-co2-emissions-not-all-crude-oil- created-equal-1843616. 101 Christa Marshall, “Oil and Gas Production Drives Arctic Ice Melt,” Scientific American, 2013, available at: http://www.scientificamerican.com/article/oil-and-gas-production-drives-arctic-ice- melt/ . 102 http://www.economist.com/blogs/economist-explains/2014/12/economist-explains-4 103 Clifford Krauss, “Oil Prices: What’s Behind the Drop? Simple Economics,” The New York Times, 29 Apr. 2016, available at: http://www.nytimes.com/interactive/2016/business/energy- environment/oil-prices.html?_r=0. 104 “Why the Oil Price Is Falling.” 105 Stanley Reed, “Stung by Low Oil Prices, BP Will Cut 4,000 Jobs,” The New York Times, 12 Jan. 2016, available at: http://www.nytimes.com/2016/01/13/business/energy-environment/bp- jobs-oil-prices.html. http://www.nytimes.com/2016/01/13/business/energy-environment/bp-jobs-oil-prices.html. 106 Krauss, “Oil Prices: What’s Behind the Drop? Simple Economics.” 107 Hassan Bashir, Crude Awakening: The Impact of Plummeting Crude Oil Prices on Company Finances, London: 2016. 108 Hannah Hoag, “Arctic Development Stalls With Tumbling Oil Prices,” Huffington Post, 22 Jan. 2016, available at: http://www.huffingtonpost.com/entry/arctic-development- stalls_us_56a2b40be4b076aadcc6c444. Arctic Oil: Canada’s Chance to Get it Right 57

109 Terry Macalister, “Shell Abandons Alaska Arctic Drilling,” The Guardian, 28 Sept. 2015, available at: http://www.theguardian.com/business/2015/sep/28/shell-ceases-alaska-arctic- drilling-exploratory-well-oil-gas-disappoints. 110 Kevin McGwin, “A Farewell to Cairn?” The Arctic Journal, 19 Aug. 2014, available at: http://arcticjournal.com/oil-minerals/907/farewell-cairn. 111 Christopher Adams, “Arctic Oil to Start Flowing from €5.6bn Polar Platform,” Financial Times, 27 Sept. 2015, available at: http://www.ft.com/intl/cms/s/0/1fc80a82-62ce-11e5-9846- de406ccb37f2.html#axzz45TskSM00. 112 Hoag, “Arctic Development Stalls With Tumbling Oil Prices.” 113 Atle Staalesen, “Gazprom Postpones Barents Sea Drilling,” Barents Observer, 16 Sept. 2015, available at: http://barentsobserver.com/en/energy/2015/09/gazprom-postpones-barents-sea- drilling-16-09. 114 Hoag, “Arctic Development Stalls With Tumbling Oil Prices.” 115 Henderson and Loe, The Prospects and Challenges for Arctic Oil. 116 See, e.g.: President Ronald Reagan, “Statement on United States Oceans Policy, March 10, 1983,” available at: http://www.oceanlaw.org/index.php?module=News&func=display&sid=101 ; National Oceanic and Atmospheric Administration (NOAA), Office of General Counsel, “Law of the Sea Convention,” available at: http://www.gc.noaa.gov/gcil_los.html (“While it is not yet a party, the U.S. nevertheless observes the Convention as reflective of customary international law and practice.”). The International Court of Justice recently ruled that Art. 76(1) of UNCLOS, on extended continental shelves, is part of customary international law. Territorial and Maritime Dispute (Nicaragua v. Colombia), 19 Nov. 2012, para. 118, available at: http://www.icj- cij.org/docket/files/124/17164.pdf 117 The law of the sea is made up of rules of customary international law which were codified, and supplemented with other rules and institutions, in the 1982 United Nations Convention on the Law of the Sea, 1833 UNTS 397, available at www.un.org/Depts/los/convention_agreements/texts/unclos/closindx.htm . 118Agreement between the United States of America and the Union of Soviet Socialist Republics on Maritime Boundary (1990) 29 ILM 941, available at www.state.gov/documents/organization/125431.pdf. 119 See: supra, note 86. 120 David H. Gray, “Canada’s Unresolved Maritime Boundaries,” (Autumn 1997) 5(3) IBRU Boundary and Security Bulletin 61 at 68-69, available at: http://www.dur.ac.uk/resources/ibru/publications/full/bsb5-3_gray.pdf . 121 For more on the Danish-Canadian maritime boundary, see Byers, International Law and the Arctic, Chapter Two. 122 Tom Høyem, “Mr. Graham, you should have told us you were coming,” Globe and Mail, 29 July 2005. 123 Island of Palmas Case (US v. Netherlands), Permanent Court of Arbitration, 4 April 1928, 35, available at: http://www.pca- cpa.org/upload/files/Island%20of%20Palmas%20award%20only%20+%20TOC.pdf 124 Sir Gerald Fitzmaurice defined the critical date as “the date after which the actions of the parties can no longer affect the issue.” Fitzmaurice, The Law and Procedure of the International Court of Justice, Volume 1 (Cambridge: Cambridge University Press, 1995) 260. See also: Minquiers and Ecrehos Case, (1953) ICJ Reports 59-60; L.F.E. Goldie, “The Critical Date,” (1963) 12 International & Comparative Law Quarterly 1251; Sir Robert Jennings & Sir Arthur Watts, Oppenheim’s International Law (9th edn) (London: Longman, 1992) 711-712; Marcelo Kohen, Possession contestée et souveraineté territorial (Paris: Presses universitaires de France, Arctic Oil: Canada’s Chance to Get it Right 58

1997) 169-183; Sovereignty over Pulau Ligitan and Pulau Sipadan (Indonesia/Malaysia), Judgment, (2002) ICJ Reports 625 at 682, para. 135. 125 Canada-Denmark Joint Statement on Hans Island, 19 Sept. 2005, New York, available at: http://byers.typepad.com/arctic/canadadenmark-joint-statement-on-hans-island.html 126 John Ibbitson, “Dispute over Hans Island nears resolution. Now for the Beaufort Sea,” Globe and Mail, 27 Jan. 2011, available at http://www.theglobeandmail.com/news/politics/dispute-over- hans-island-nears-resolution-now-for-the-beaufort-sea/article563692/ ; Adrian Humphreys, “New proposal would see Hans Island split equally between Canada and Denmark,” National Post, 11 April 2012, available at http://news.nationalpost.com/2012/04/11/new-proposal-would-see-hans- island-split-equally-between-canada-and-denmark/ 127 On condominiums generally, see: Joel H. Samuels, “Condominium Arrangements in International Practice: Reviving an Abandoned Concept of Boundary Dispute Resolution,” (2007- 2008) 29 Michigan Journal of International Law 727. Most recently, the ICJ utilized the instrument of condominium in a maritime context in the Land, Island and Maritime Frontier Dispute (El Salvador/Honduras: Nicaragua intervening), (1992) ICJ Reports 350 at 601-604. 128 The Pheasant Island condominium was created by the 1659 Treaty of the Pyrenees. See: Luis Careaga, L'île des faisans ou de la conférence: un condominium franco-espagnol (Vol. 28, Faculté de droit et des sciences politiques, Strasbourg, 1932); Peter Sahlins, Boundaries: The Making of France and Spain in the Pyrenees (Berkeley: University of California Press, 1989); Frank Jacobs, “The World’s Most Exclusive Condominium,” New York Times on-line, 23 Jan. 2012, http://opinionator.blogs.nytimes.com/2012/01/23/the-worlds-most-exclusive-condominium/ 129 See the UNESCO website at: http://whc.unesco.org/en/list/354 130 Great Britain/Russia: Limits of Their Respective Possessions on the North-West Coast of America and the Navigation of the Pacific Ocean, 16 Feb. 1825, 75 Consolidated Treaty Series 95. 131 Ibid., Art. 3. The 1825 treaty was written in French only, but the 1867 treaty both repeats the relevant passage in French and uses this English translation in an authentic text. Treaty concerning the Cession of the Russian Possessions in North America, June 20, 1867, Art. 1, available at http://avalon.law.yale.edu/19th_century/treatywi.asp. 132 See, e.g.: US Department of State, Public Notice 2237, Exclusive Economic Zone and Maritime Boundaries, (1995) 60 Fed. Reg. 43825-43829. 133 See Ted L. McDorman, Salt Water Neighbors: International Ocean Law Relations between the United States and Canada (New York: Oxford University Press, 2009), at 181-190, for the definitive presentation of the dispute as previously understood. 134 UNCLOS, supra, note 117. 135 See: supra, note 116. 136 Sian Griffiths, “US-Canada Arctic Border Dispute Key to Maritime Riches,” BBC News, 2 Aug. 2010, available at: http://www.bbc.com/news/world-us-canada-10834006. 137 Chris Windeyer, “Proposed U.S. Beaufort Sea Drilling Leases Infringe on Canada’s Sovereignty, Says Yukon,” CBC News 2016, available at: http://www.cbc.ca/news/canada/north/proposed-beaufort-licences-infringe-arctic-sovereignty- 1.3498469. 138 “U.S.-Canada Joint Statement on Climate, Energy, and Arctic Leadership,” available at: http://pm.gc.ca/eng/news/2016/03/10/us-canada-joint-statement-climate-energy-and-arctic- leadership. 139 Ibid, at 68. 140 See: Executive Order No. 176 of 14 May 1980 on the fishing territory of Northern Greenland, available at: http://faolex.fao.org/docs/pdf/den99033E.pdf 141 “Royal Decree on Amendment of Royal Decree on Delimitation of the Territorial Waters of Greenland, 15 October 2004,” (2005) 56 Law of the Sea Bulletin 126 at 128, available at: http://www.un.org/Depts/los/doalos_publications/LOSBulletins/bulletinpdf/bulletin56e.pdf . The Arctic Oil: Canada’s Chance to Get it Right 59

new base points are as follow: Cape Bryant 82°20’.234 N, 55°14’.984 W; Northernmost point of Beaumont Island 82°45’.346 N, 50°47’.051 W; Northernmost point of John Murray Island 82°50’.190 N, 49°03’.203 W; Cape Benét 82°59’.816 N, 47°16’.698 W; Cape Payer 83°05’.275 N, 46°15’.167 W; Cape Ramsay 83°10’.915 N, 44°53’.891 W. Cape Distant is no longer used as a base point and now falls within the straight baseline connecting Cape Payer to Cape Ramsay. A useful map of the baselines is available in “Royal Decree,” ibid., at 132. Beaumont Island is almost bisected by the 50th meridian towards the top of the page. 142 For a map showing the Danish equidistance line post-2004, see the map of the “Outer limits of the exclusive economic zone of Greenland,” in “Executive Order on the Exclusive Economic Zone of Greenland, 20 Oct. 2004,” (2005) 56 Law of the Sea Bulletin 133 at 136, available at: http://www.un.org/Depts/los/doalos_publications/LOSBulletins/bulletinpdf/bulletin56e.pdf 143 “Canada and Kingdom of Denmark Reach Tentative Agreement on Lincoln Sea Boundary,” News Release, Canadian Department of Foreign Affairs, 28 Nov. 2012 (with backgrounder), available at: http://www.international.gc.ca/media/aff/news- communiques/2012/11/28a.aspx?lang=eng&view=d . See also: Kim Mackrael, “Canada, Denmark a step closer to settling border dispute,” Globe and Mail, 30 Nov. 2012, available at: http://www.theglobeandmail.com/news/national/canada-denmark-a-step-closer-to-settling-border- dispute/article5831571/ 144 2009 Act on Greenland Self-Government, available at: http://uk.nanoq.gl/~/media/f74bab3359074b29aab8c1e12aa1ecfe.ashx 145 See: Byers, International Law and the Arctic at 37-39 and 44 for discussions on joint management regimes. 146 ‘Partial Submission of the Government of the Kingdom of Denmark together with the Government of Greenland to the Commission on the Limits of the Continental Shelf: The Northern Continental Shelf of Greenland’, 15 December 2014, available at: http://www.un.org/Depts/los/clcs_new/submissions_files/dnk76_14/dnk2014_es.pdf accessed 10 December 2015. 147 ‘Comment by the Information and Press Department of the Russian Foreign Ministry on the filing of Denmark’s claim to the Arctic continental shelf’, 16 December 2014, available at: {http://archive.mid.ru//brp_4.nsf/0/0F1A381933F7FCDDC3257DB1004B45CE} accessed 10 December 2015. 148 Ibid. 149 ‘Partial Revised Submission of the Russian Federation to the Commission on the Limits of the Continental Shelf in respect of the Continental Shelf of the Russian Federation in the Arctic Ocean’, 3 August 2015, available at: {http://www.un.org/Depts/los/clcs_new/submissions_files/submission_rus_rev1.htm} accessed 10 December 2015. Russia’s position is that the Lomonosov Ridge is a ‘submarine elevation’ that is a ‘natural prolongation’ of the Eurasian landmass. Under Article 76 of UNCLOS, there is no requirement to limit the coastal state’s rights to such a submarine elevation—unless it physically terminates at some point, or reaches the 200 exclusive economic zone of another state. 150 Byers, International Law and the Arctic. 151 “Letter from James W. Dyer, Acting Assistant Secretary of State for Legislative and Intergovernmental Affairs, to Senator Charles Mathias, Jr. (R. Maryland), February 26, 1986,” reproduced in Office of Ocean Affairs, Limits in the Seas No. 112: United States Responses to Excessive National Maritime Claims (Washington, DC: US State Department, 1992) 30, available at http://www.state.gov/documents/organization/58381.pdf. 152 “Agreement between the Government of Canada and the Government of the United States of America on Arctic Cooperation,” Canada Treaty Series 1988, no. 29; available at http://www.treaty-accord.gc.ca/text-texte.aspx?id=101701. Arctic Oil: Canada’s Chance to Get it Right 60

153 Chester Dawson, “Arctic Shipping Volume Rises as Ice Melts,” Wall Street Journal, 29 October 2014, available at http://www.wsj.com/articles/arctic-cargo-shipping-volume-is-rising- as-ice-melts-1414612143 154 Arctic Council Observer States, available at http://www.arctic-council.org/index.php/en/about- us/arctic-council/observers. 155 Government of the Northwest Territories, “State of the Environment: Trends in shipping in the Northwest Passage and the Beaufort Sea,” updated 29 May 2015, available at http://www.enr.gov.nt.ca/state-environment/73-trends-shipping-northwest-passage-and-beaufort- sea. 156 Crystal Cruises, Northwest Passage, available at http://www.crystalcruises.com/northwest- passage-cruise. 157 Nathan VanderKlippe, “Chinese scientists look to Canadian Arctic for research outpost,” Globe and Mail, 18 March 2015, available at http://www.theglobeandmail.com/report-on- business/industry-news/energy-and-resources/chinese-scientists-dream-of-arctic-research- outpost-in-the-north/article23527009/ 158 Laurence C. Smith & Scott R. Stephenson, “New Trans-Arctic shipping routes navigable by midcentury,” Proceedings of the National Academy of Sciences (2013) 110(13) E1191-95, available at http://www.pnas.org/content/110/13/E1191.abstract. 159 Rick Gladstone, “Strait of Hormuz Once Again at Center of U.S.-Iran Strife,” New York Times, 1 May 2015, available at http://www.nytimes.com/2015/05/02/world/middleeast/strait-of- hormuz-once-again-at-center-of-us-iran-strife.html. 160 Suzanne Lalonde & Frédéric Lasserre, “The Position of the United States on the Northwest Passage: Is the Fear of Creating a Precedent Warranted?” (2013) 44(1) Ocean Development & International Law 28-72. 161 “Model Negotiation on Northern Waters,” Annex II in Michael Byers, Who Owns the Arctic? (Vancouver: D&M Publishers, 2009); also available at http://byers.typepad.com/arctic/model- negotiation-on-northern-waters.html. 162 North American Aerospace Defense Command, “NORAD History,” available at http://www.norad.mil/AboutNORAD/NORADHistory.aspx 163 St. Lawrence Seaway System, “Seaway History,” available at http://www.greatlakes- seaway.com/en/seaway/history/ 164 The Arctic Council, “Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic”, 2013, available at: https://oaarchive.arctic-council.org/handle/11374/529 165 1990 International Convention on Oil Pollution Preparedness, Response and cooperation, available at www.ifrc.org/docs/idrl/I245EN.pdf. 166 “BSEE Participates in Arctic Offshore Regulators Forum Meeting in Washington.” BSEE, 2015, available at: http://www.bsee.gov/BSEE-Newsroom/BSEE-News-Briefs/2015/BSEE- Participates-in-Arctic-Offshore-Regulators-Forum-Meeting-in-Washington/. 167 Kevin McGwin, “Full Polar Code in Place, but Gaps Remain,” The Arctic Journal, 15 May 2015, available at: http://arcticjournal.com/climate/1588/full-polar-code-place-gaps-remain. 168 V.M. Santos-Pedro, K. Juurmaa, and L. Brigham, Arctic Marine Shipping Assessment 2009 Report. Tromsø, NO, available at: http://www.arctic.noaa.gov/detect/documents/AMSA_2009_Report_2nd_print.pdf. 169 “How Oil Harms Animals and Plants in Marine Environments,” NOAA Office of response and Restoration, available at: http://response.restoration.noaa.gov/oil-and-chemical-spills/oil- spills/how-oil-harms-animals-and-plants-marine-environments.html. 170 Sherry Warren et al., Oil Spill and Modeling in the Hudson and Davis Straits, St. John’s, NL: 2014, available at: http://www.nunavut.ca/files/2014-05- 29%20Oil%20Spill%20Detection%20and%20Modelling%20Report.pdf. Arctic Oil: Canada’s Chance to Get it Right 61

171 P.K. Quinn et al, The Impact of Black Carbon on the Arctic Climate (Oslo: Arctic Monitoring and Assessment Programme, 2011) 4, available at: http://www.amap.no/documents/ 172 See: Arctic Council Task Force on Short-Lived Climate Forcers, “Technical Report: An Assessment of Emissions and Mitigation Options for Black Carbon for the Arctic Council,” 2 May 2011, p. 2, available at: http://arctic- council.npolar.no/accms/export/sites/default/en/meetings/2011-nuuk- ministerial/docs/3_1_ACTF_Report_02May2011_v2.pdf 173 Ibid. 174 Ibid. 175 Cath O’Driscoll, “Soot Warming Significant.” (2011) 17 Chemistry and Industry, at 10. 176 Alister Doyle, “Arctic nations plan soot crackdown,” Boston Globe, 30 April 2009, available at: http://www.boston.com/news/world/europe/articles/2009/04/30/arctic_nations_plan_soot_crackd own/ 177 Arctic Council Task Force on Short-Lived Climate Forcers, “Technical Report,” supra, note 172, p. 2. 178 Arctic Council Task Force on Short-Lived Climate Forcers, “Progress Report and Recommendations for Ministers,” 2 May 2011, p. 3, available at: http://arctic- council.npolar.no/accms/export/sites/default/en/meetings/2011-nuuk-ministerial/docs/3- 0a_TF_SPM_recommendations_2May11_final.pdf 179 Joby Warrick & Juliet Eilperin, “Arctic Council to address role of soot in global warming,” Washington Post, 11 May 2011, available at: http://www.washingtonpost.com/national/arctic- council-to-address-role-of-soot-in-global-warming/2011/05/11/AFourXsG_story.html 180 For an overview of each Arctic country’s pollution measures that may affect black carbon emissions, see: Arctic Council Task Force on Short-Lived Climate Forcers, “Technical Report”, supra, note 172 at Sec. 5, pp. 34-51. 181 Environmental Protection Agency, Request for Proposals: “Arctic Black Carbon: Reduction of Black Carbon from Diesel Sources,” 2011, pp. 1-2, available at: http://www.epa.gov/international/grants/Arctic-Black-Carbon-ModifiedRFP.pdf 182 United Nations Environment Program, “New Climate and Clean Air Coalition Expands to 13 Members: New Initiatives Assessed for Fast and Scaled-up Action on Black Carbon, Methane, and HFCs,” 24 April 2012, available at: http://www.unep.org/newscentre/default.aspx?DocumentID=2678&ArticleID=9116 . The coalition website is located at: http://www.unep.org/ccac/Home/tabid/101612/Default.aspx 183 Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants, “Focal Areas,” available at: http://www.unep.org/ccac/FocalAreas/tabid/102153/Default.aspx 184 UNEP News Centre, “All G8 Countries Back Action on Black Carbon, Methane and Other Short Lived Climate Pollutants,” 22 May 2012, available at: http://www.unep.org/newscentre/default.aspx?DocumentID=2683&ArticleID=9134 185 A full list of initiatives are available here: http://www.ccacoalition.org/en/initiatives. 186 The 2015 Iqaluit SAO Report to Ministers, “Enhanced Black Carbon and Methane Emissions Reductions: An Arctic Council Framework for Action,” available at: http://arcticjournal.com/sites/default/files/acmmca09_iqaluit_2015_sao_report_annex_4_tfbcm_f ramework_document.pdf. 187 Ibid. 188 “New Sulfur Regulations a Challenging Paradigm Shift for Shipping,” Bloomberg Business, 19 June 2015, available at: http://www.bloomberg.com/professional/blog/new-sulfur-regulations- a-challenging-paradigm-shift-for-shipping/. 189 Alyson Azzara and Dan Rutherford, Air Pollution from Marine Vessels in the U.S. High Arctic in 2025, San Francisco, CA, available at: Arctic Oil: Canada’s Chance to Get it Right 62

http://www.theicct.org/sites/default/files/publications/ICCT_air-pollution-us-arctic- 2025_20150130.pdf. 190 Costas Paris, “U.N. Agency Adopts Polar Code to Prevent Sea Pollution,” The Wall Street Journal, 15 May 2015, available at: http://www.wsj.com/articles/u-n-agency-adopts-polar-code- to-prevent-sea-pollution-1431711578. 191 Article 38, UNCLOS, supra, note 117. 192 “The Russian Maritime Arctic and Northern Sea Route,” from AMSA Report 2009, available at: http://www.arctis-search.com/The+Russian+Maritime+Arctic+and+Northern+Sea+Route 193 “Designation of the Torres Strait as an Extension of the Great Barrier Reef Particularly Sensitive Sea Area,” IMO Doc. MEPC 53/24/Add.2, Annex 21, 22 July 2005, available at http://www.amsa.gov.au/marine_environment_protection/torres_strait/133-53.pdf . 194 Pew/Oceans North has proposed that environmental and social factors be included, and that routings be designed to avoid sensitive areas. See: http://www.arcticdeeply.org/articles/2016/04/8935/report-upgrade-canadas-arctic-shipping- corridors/ ] 195 See: Government of Greenland, Bureau of Mines and Petroleum, “Current Licenses,” at: http://www.bmp.gl/petroleum/current-licences . On Lancaster Sound, see: Gloria Galloway, “Ottawa moves to protect Serengeti of the Arctic,” Globe and Mail, 6 Dec. 2010, available at: http://www.theglobeandmail.com/news/politics/ottawa-moves-to-protect-serengeti-of-the- arctic/article4081939/ 196 As a party to the 1972 Convention Concerning the Protection of the World Cultural and Natural Heritage, Canada is required to identify the natural sites of outstanding universal value on its territory (Art. 3, available at http://whc.unesco.org/archive/convention-en.pdf ). However, nominations to the World Heritage List are not considered unless the nominated property has previously been included on the state party’s ‘tentative list’ of the properties it intends to consider for nomination in subsequent years. Parties are encouraged to re-examine and re-submit their tentative list at least once every decade. Under Canada’s original tentative list of world heritage sites (1980), Lancaster Sound was included as part of Sirmilik National Park. However, the proposal was subsequently abandoned and Lancaster Sound does not currently appear on Canada’s updated tentative list (2004). UNESCO World Heritage Centre, Tentative Lists: Canada, http://whc.unesco.org/en/tentativelists/state=ca . There are at present no marine World Heritage Sites in the Arctic. See: UNESCO World Heritage Lists at http://whc.unesco.org. 197 According to Parks Canada, a proposal for a national marine conservation area was prepared in 1987, but the feasibility assessment was suspended at the request of the local Inuit. Parks Canada, “Canada’s National Marine Conservation Areas System Plan: Lancaster Sound,” available at http://www.pc.gc.ca/progs/amnc-nmca/systemplan/itm1-/arc6_E.asp 198 See: Gloria Galloway, “Ottawa moves to protect Serengeti of the Arctic,” Globe and Mail, 6 Dec. 2010, available at: http://www.theglobeandmail.com/news/politics/ottawa-moves-to-protect- serengeti-of-the-arctic/article4081939/ ; and “Health of the Oceans Initiatives – A Listing by Lead Department or Agency,” available at: http://www.dfo-mpo.gc.ca/oceans/management- gestion/healthyoceans-santedesoceans/initiatives-eng.htm 199 “Ottawa proposes boundaries for Lancaster Sound marine conservation area: Promised steering committee yet to be created,” Nunatsiaq News, 6 Dec. 2010, available at: http://www.nunatsiaqonline.ca/stories/article/987678_ottawa_proposes_boundaries_for_lancaster / 200 Josh Wingrove, “Lancaster Sound: A Seismic Victory for the Inuit,” Globe and Mail, 13 Aug. 2010, available at: http://www.theglobeandmail.com/news/politics/lancaster-sound-a-seismic- victory-for-the-inuit/article1377067/ 201 Steve Ducharme, “Shell’s Oil Permits near Lancaster Sound Still Valid, INAC Says,” Nunatsiaq News, 11 Apr. 2016, available at: Arctic Oil: Canada’s Chance to Get it Right 63

http://www.nunatsiaqonline.ca/stories/article/65674shells_oil_permits_near_lancaster_sound_still _valid_inac_says/. 202 “Environmental Group Files Lawsuit over ‘Expired’ Shell Arctic Oil Permits,” CBC News, 12 Apr. 2016, available at: http://www.cbc.ca/news/canada/north/shell-arctic-oil-lawsuit-1.3531597. 203 Canadian Parks and Wilderness Society, “Dare to Be Deep: Annual Report on Canada’s Progress in Protecting Our Ocean,” Ottawa, ON, , available at: http://cpaws.org/uploads/CPAWS_DareDeep2015_v10singleLR.pdf. 204 Ibid. 205 Pike, E.P. et al., “Sea States: G20,” Seattle, WA: 2014, Marine Conservation Institute available at: https://marine- conservation.org/media/filer_public/filer_public/2014/11/17/mci_seastates_g20_2014.pdf. 206 Evan Dyer, “Obama and Trudeau Pledge to Protect a Warming Arctic,” CBC News, 11 Mar. 2016, available at: http://www.cbc.ca/news/politics/us-canada-arctic-protection-1.3486062. 207 National Energy Board, “Review of Offshore Drilling in the Canadian Arctic,” Dec. 2011, p. 3, available at: http://www.neb-one.gc.ca/clf- nsi/rthnb/pplctnsbfrthnb/rctcffshrdrllngrvw/fnlrprt2011/fnlrprt2011-eng.pdf. 208 See discussion, Chapter 3, Byers, International Law and the Arctic. 209 Oceans North Canada, “Becoming Arctic-Ready: Policy Recommendations for Reforming Canada’s Approach to Licensing and Regulating Offshore Arctic Oil and Gas,” (Sept. 2011), Fig. 1, p. 1, available at: http://oceansnorth.org/becoming-arctic-ready. 210 National Energy Board, supra, note 207, p. 5. 211 Shawn McCarthy, “Oil giants contest Arctic relief well requirement,” Globe and Mail, 5 April 2011, available at: http://www.theglobeandmail.com/report-on-business/industry-news/energy- and-resources/oil-giants-contest-arctic-relief-well-requirement/article582755/. 212 National Energy Board, supra, note 207, p. 40 (emphasis added). 213 Jeffrey Jones, “NEB to Rule on Relief-Well Alternatives for Arctic Drilling Projects.” The Globe and Mail, 11 July 2014, available at: http://www.theglobeandmail.com/report-on- business/neb-to-rule-on-relief-well-alternatives-for-arctic-drilling-projects/article19574884/. 214 “Imperial Oil, BP Delay Beaufort Sea Drilling Plans Indefinitely.” CBC News 26 June 2015, available at: http://www.cbc.ca/news/canada/north/imperial-oil-bp-delay-beaufort-sea-drilling- plans-indefinitely-1.3129505. 215 “BSEE, BOEM Issue Proposed Regulations to Ensure Safe and Responsible Exploratory Drilling Offshore Alaska.” 2015, available at: http://www.bsee.gov/arcticstandards/. 216 See: International Oil Pollution Compensation Funds, Liability and Compensation for Oil Pollution Damage: Texts of the 1992 Civil Liability Convention, the 1992 Fund Convention and the Supplementary Fund Protocol (2011 edition), available at: http://www.iopcfund.org/npdf/Text%20of%20Conventions_e.pdf 217 Ibid. 218 Ibid. 219 For list of the States Parties to the 1992 CLC, 1992 Fund Convention, and 2003 Supplementary Fund, see: http://www.iopcfund.org/92members.htm 220 Ibid. 221 See discussion, Chapter Five. 222 For the text of the “Bunker Convention”, see: http://www.gard.no/ikbViewer/Content/3210767/Bunkers%20Convention%20and%20ratification s%20March%202012.pdf 223 See: 1976 Convention on Limitation of Liability for Maritime Claims, as amended by the 1996 Protocol, available at: http://www.emsa.europa.eu/main/enforcement-eu-legislation/topics-a- instruments/download/974/595/23.html Arctic Oil: Canada’s Chance to Get it Right 64

224 Jonathan L. Ramseur, “Liability and Compensation Issues Raised by the 2010 Gulf Oil Spill,” Congressional Research Service, 11 March 2011, available at: http://assets.opencrs.com/rpts/R41679_20110311.pdf. 225 P.L. 101-380, primarily codified at 33 U.S.C. § 2701 et seq. For a useful summary of the issues, see: Ramseur, ibid. 226 Jake Sherman, “Murkowski blocks oil liability bill,” Politico, 13 May 2010, available at: http://www.politico.com/news/stories/0510/37207.html. 227 Arctic Waters Pollution Prevention Regulations, C.R.C., c. 354, s. 8 (“For the purposes of section 6 of the Act, the maximum amount of liability of an operator in respect of each deposit of waste is as follows: … (f) in the case of an operation engaged in exploring for, developing or exploiting oil and gas, $40 million.”) 228 Inuvialuit Final Agreement (as amended), Art. 13(15), available at http://www.daair.gov.nt.ca/_live/documents/documentManagerUpload/InuvialuitFinalAgreement 1984.pdf. 229 See: supra, note 13 230 Nathan Vanderklippe, “Oil drillers willing to accept liability for accidents in Arctic,” Globe and Mail, 13 Sept. 2011, available at: http://www.theglobeandmail.com/report-on- business/industry-news/energy-and-resources/oil-drillers-willing-to-accept-liability-for-accidents- in-arctic/article4199962/. 231 Shawn McCarthy, “Canada Raises Liability for Offshore Oil Spills to $1-Billion,” The Globe and Mail, 18 June 2013, available at: http://www.theglobeandmail.com/report-on- business/canada-raises-liability-for-offshore-oil-spills-to-1-billion/article12647765/. 232 Bob Weber, “Obama, Trudeau Further Some Arctic Goals but Miss Others: Experts,” iPolitics 10 Mar. 2016, available at: http://ipolitics.ca/2016/03/10/obama-trudeau-further-some-arctic- goals-but-miss-others-experts/.