Let Battle for Arctic Ocean’s Scarce Resources Commence!

Great video below and found here explaining the geo-political storm brewing over rights to perhaps “a quarter of the world’s undiscovered oil and gas resources” that lie under the Arctic Ocean. It seems global warming is making these resources more accessible, so it’s good to know climate change does have some advantages (joke!).According to the UN Convention on Law of the Sea which defines nation’s rights and responsibilities, a “coastal state’s territorial waters may extend up to 370 kilometers from that state’s baseline”.

As can be seen from the image below, a number of countries are on tenterhooks ready to stake a claim to what’s outside their jurisdiction. Now apparently Russia annoyed everyone by planting a flag on the ocean floor in 2007 however the talk at a recent international summit in Moscow on the matter was all about cooperation. With what’s at stake, and with each side pushing forth their own interests at the prospect of potential revenues, not to mention the fact that they’re talking about drilling and mining in one of earth’s most fragile eco systems, many are understandibly very concerned.

There’s plenty of economics here and I’ll certainly be looking at this when teaching scarcity, opportunity cost and factors of production. Also here’s another great blog (Early Warning) from someone who keeps a keen eye on developments in the oil industry - good for data on external shocks and globalisation etc.