Russia’s Long-Term Bet On The Arctic
Further betting on its natural resources-based economy, Russia is investing in Arctic infrastructure and development that will ultimately lead to greater integration with China rather than Europe.
In 2008, the U.S. Geological Survey (USGS) conducted a study to estimate the total amount of undiscovered oil and natural gas reserves north of the Arctic Circle. The study included only reserves believed to be recoverable using the existing technology of the day, even in the presence of permanent sea ice, and excluded “nonconventional resources,” such as “coal bed methane, gas hydrate, oil shale, and tar sand.”1 With this moderately conservative approach, the study concluded that the Arctic contained 90 billion barrels of oil, 44 billion barrels of natural gas liquids, and 47.3 trillion cubic meters of natural gas yet to be tapped. This is roughly equivalent to the total proven oil reserves of the United Arab Emirates, the seventh-largest in the world, combined with the total proven natural gas reserves of Russia, the largest in the world by far. These estimated reserves would account for about 13% of the world’s undiscovered oil, 30% of undiscovered natural gas, and 20% of undiscovered natural gas liquids.2 According to the USGS’ assessment, 84% of these undiscovered Arctic reserves are expected to occur offshore.