A very cold war indeed

To reach the village of Tuktoyaktuk, in the extreme north of Canada's Northwest Territories, you first fly to Inuvik, a town of 4,000 people inside the Arctic Circle that is, from the point of view of most Canadians, ridiculously far north in the first place. Then you drive north. You can do this only in winter, because about a mile outside Inuvik the road comes to an end; the rest of the journey is on a frozen river, and then, after a while, on the frozen Arctic Ocean itself. (In summer, when the sea melts, Tuktoyaktuk is accessible only by boat or turbo-prop plane.)

Before long, whiteness, tinged with blue, stretches to the horizon in every direction. You pass huge industrial ships, locked in place by the ice, abandoned for the season. Around this point, the -28C cold may begin to bite through your thermal underwear, and the guide who is driving you in his Jeep may start to say troubling things, such as, "The cracks in the ice are supposed to make it stronger, actually." Finally, after travelling for three hours, you reach the Inuit village of Tuktoyaktuk and drive back up on to shore - where, in one of the small wooden buildings, the mayor, a 45-year-old Inuk named Merven Gruben, will tell you he thinks the moral fibre of the place is in decline, because these days, whenever the temperature falls below -40C, the children get to stay home from school. "Wasn't like that when we were kids," he sighs. "If you ask me, we've gone soft."

It isn't hard, visiting the Canadian Arctic, to feel as though you have reached the back of beyond: a place at the edge of the map, empty except for the caribou and a few improbably hardy humans, who journey for miles to shop at Inuvik's solitary supermarket, which sells overpriced groceries shipped from "down south" - meaning the northern Canadian city of Edmonton - along with a small selection of snowmobiles. On the rare occasions that the region gets a mention in the Toronto papers, it's usually to update readers on the long-running comic saga of the local reindeer herd, 3,000 members of which went missing not long ago. It would be reasonable to conclude from all this that the far north of Canada was the kind of place the rest of the world had forgotten about. Recently, though, that hasn't been the case.

Take, for example, the fighter planes. The Canadian army abandoned a year-round presence at Inuvik years ago, but now it's back, encamped in an anonymous building out by the airport; Dez Loreen, the 25-year-old editor and sole reporter for the Inuvik Drum newspaper, watches from his office window as F-16 jets and Hercules cargo planes speed overhead. Meanwhile, the silent, icy expanses off the shores of Tuktoyaktuk have been a little less silent lately: a Canadian icebreaker has been plying the coastline, making its presence felt and annoying Inuit polar bear hunters, who fare better when the ice is solid. Early-warning stations, used in the 50s to monitor for Soviet missiles, are in operation once more, keeping watch at the top of the world.

Similar things have been happening across the Arctic, in Russia and Greenland and Alaska: military manoeuvres, scientific research projects and other displays of territory-marking. Thanks largely to the catastrophic effects of global warming - which are far more acute in the Arctic than elsewhere, partly because of the angle at which the sun's rays hit the ice - the polar region has become newly accessible. And suddenly it is the target of a gold rush. According to the US Geological Survey, up to a quarter of the world's undiscovered oil and gas may lie beneath the polar seabed - far more than Saudia Arabia's total known reserves - along with vast mineral wealth. Moreover, the melting ice seems likely to open up the Northwest Passage, the fabled Arctic sea route linking the Atlantic and Pacific Oceans, to year-round commercial shipping. Nineteenth-century explorers dreamed of such a route; were it to become a reality now, it would transform how goods are shipped around the world - halving, for example, the distance by water between Japan and northern Europe.

Of course, it's bitterly ironic that global warming, caused by burning fossil fuels, should unleash a new scramble for more fossil fuels. But irony doesn't count for much in the oil business, and it proved no obstacle last August when Russia, in the most audacious move so far, dispatched a nuclear-powered icebreaker and two submersible craft to plant a Russian flag, housed in a titanium tube, on the seabed directly beneath the North Pole. "The Arctic is ours," declared lead explorer Artur Chilingarov, thereby staking Moscow's claim to 460,000 square miles of ocean floor, more than five times the area of Britain. Canada, apparently taken by surprise, responded by pledging a major military build-up in the north.

It was by no means the first time a country had claimed ownership of the pole or the area around it. Canada has done so (and once tried to assert its rights by threatening to impose a littering fine on a pilot forced to abandon his plane there). Denmark has done so, too (though it based its claim partly on Oodaaq, a 30m-wide outcrop off Greenland, which is Danish territory; the Danes, along with The Guinness Book Of Records, argued that Oodaaq was the northernmost land on the planet, but problematically, according to several reports, it has since disappeared). The US and Canada, although allies, have been disputing the boundary between Alaska and Canada off the north coast. But the truth is that nobody really knows who should be allowed to own what, in the farthest reaches of the Arctic, because until the melting began to accelerate, there wasn't much point in asking. The high ocean was a legal no man's land. In 1909, two Inuit guides were accused of murdering an American adventurer near the pole, but the case had to be dropped: nobody could work out who had jurisdiction over the ice where the alleged killing occurred.

Now, though, with the promise of oil and a navigable Northwest Passage, the question is urgent. Last month, reports prepared for the EU and Nato both warned of dangerous tensions between Russia and the west over polar resources. Nato will address the issue for the first time at a summit in Bucharest at the end of this month. Scott Borgerson, a former lieutenant-commander with the US coastguard, has warned of coming anarchy; he believes that unless the US takes charge to resolve competing claims to the Arctic, "The region could erupt in an armed mad dash for its resources." What is taking shape is a standoff that it is impossible to resist describing as a very cold war indeed.

After a few days in Inuvik - I was staying in a one-room cabin beside a lake on the outskirts of town - it became quite difficult to remember that I was there because of global warming. At -30C, which is an unremarkable temperature in the far north, the moisture in your nose freezes as soon as you step outside and breathe in. Breathing through your mouth triggers a coughing fit. The town has only one month of permanent darkness, in January, but even by March the sun barely rises above the horizon. With wind-chill, the temperature often plunges to -50C, though I encountered anything close to that only once, at 3am, looking at the northern lights.

The residents of Inuvik take a sardonic approach to these extremes. "Cold enough for ya?" they ask from deep inside their fur-lined parkas, when they realise you're an outsider. Perhaps it's not surprising that some will half-guiltily volunteer the view that a little climate change might not be such a bad thing. "This idea of global warming, telling us how warm we are - well, I have an idea that's by scientists who are all living in Bermuda," Willard Hagen, a former seaplane pilot who now chairs the local land and water board, told me one day as we kept warm in his pick-up truck, with the engine running. "Try living here for a while and then telling us about global warming." ("If you've ever had to work outside at -55C," says Andrew Applejohn, a polar researcher based in Inuvik, who certainly realises the perils of climate change himself, "you will understand the benefits of not working outside at -55C.")

The situation is dire: last year, the year-round polar icecap shrank to the smallest extent ever recorded by scientists, and to half the size of 50 years ago. Some climate experts believe the pole could be ice-free in summer within two decades, and environmental charities are calling urgently for a new international treaty to protect the Arctic from destruction. The complicating factor, though, is that the melting promises to uncork a steady flow of wealth from oil and shipping, and the Inuit, the aboriginal inhabitants of northern Canada, could certainly use that. For decades, they have been jolted from boom to bust and back again. The money came first from fur-trapping, until the industry collapsed, almost overnight in the early 80s, thanks to an American and European crisis of conscience (the price for a sealskin dropped from C$23 [£11.30] to C$7 [£3.40). Then plummeting prices drove away the oil firms. In their wake came alcoholism, drug abuse and suicide - challenges also faced by other indigenous communities around the Arctic, in Russia, Greenland and Alaska. Times are better now, but the economy of Canada's far north still runs largely on government welfare cheques. A navigable Northwest Passage, along with an active oilfield, would change all that. Admittedly, it may be bad news for the remaining polar bear hunters, who take wealthy Americans on sport-hunting trips across the ice, but it would turn Inuvik into a major regional hub, and the minuscule settlement of Tuktoyaktuk into a deep-water port - an Arctic equivalent, perhaps, of Rotterdam.

Shortly after Russia's flag-planting last year, Canada's prime minister, Stephen Harper, staged a tetchy photo-opportunity in a hut in Resolute, a hamlet less than 400 miles from the pole. "Canada's new government understands that the first principle of Arctic sovereignty is: use it or lose it," he said, before announcing a new army cold-weather training base in Resolute, along with a multimillion-dollar port and naval station a few hundred miles away in the abandoned mining town of Nanisivik. The Canadian military presence in the Arctic, which at that time consisted of about 100 part-timers, is expected to rise to 1,000.

It was left to Harper's then foreign minister, Peter MacKay, to spell out what the announcement was supposed to signal to Moscow. MacKay angrily dismissed the Russian expedition as "posturing... this is the true north, strong and free, and they're fooling themselves if they think dropping a flag on the ocean floor is going to change anything. There is no question over Canadian sovereignty in the Arctic. We've made that very clear... you can't go around the world these days, dropping a flag somewhere. This isn't the 14th or 15th century." ("We're not throwing flags around," responded his Russian counterpart, Sergey Lavrov. "We just do what other discoverers did.")

But Resolute and Nanisivik also occupy key strategic positions on the Northwest Passage, and the Canadians' bring-it-on stance was clearly also a warning to the US, Japan and some European countries - all of which have suggested that they consider the passage to be international waters, not Canadian territory. In a remarkably un-Canadian way, Harper seemed to be squaring up to the whole world. Around the same time, Russia ordered bomber flights over the Arctic Ocean for the first time since the collapse of communism.

"This is very, very complex - probably the most complex boundary situation in the world," says Charlotte Breide, a solicitor at the lawyers Ince & Co, in her office overlooking Tower Bridge in London. "And it's cold." Ince is one of the world's leading maritime law firms and Breide herself specialises in sovereignty disputes at sea. But even for an expert, the Arctic situation is hard to grasp. When I asked Martin Pratt, director of the International Boundaries Research Unit at Durham University, to explain polar sovereignty to me, he first made a sound as if his head was hurting. "It's an absolute nightmare to describe," he said.

The idea of a "law of the sea", in the sense of a globally agreed system of rules, is a fairly recent invention. Before the 1940s, things were simple: any nation with a coastline was entitled to exclusive rights over a small band of water, originally defined as the distance a cannon could be fired from land, but later extended. Beyond that, the concept of law had no purchase; the wild ocean remained "radically free", as William Langewiesche puts it in his book The Outlaw Sea. Then came the maritime equivalent of a landgrab: a 1945 proclamation by President Harry Truman, asserting exclusive US control of a huge stretch of the continental shelf, extending hundreds of miles from US coasts. Other countries made similar pronouncements, and before long drilling on the ocean floor was widespread. Utter chaos loomed, and at the United Nations in New York, negotiations began in an effort to agree a more orderly system. But it wasn't until 1982 that the members of the UN signed the Convention on the Law of the Sea. And perhaps unsurprisingly - for a document decided by committee, and with enormous implications for the distribution of the world's untapped oil wealth - it didn't make things much simpler.

In the vaguely sinister language of international diplomacy, the oceans that lie beyond the control of any one government are known simply as "the Area". (Oddly, the Area isn't administered by the UN, but by an independent organisation, the International Seabed Authority, based on a palm-lined street in Kingston, Jamaica.) The trouble begins when a country wants to lay claim to a chunk of the Area for itself: under UN rules, it must prove that the ocean floor is, in fact, an extension of its own continental shelf. That requires the collection of massive amounts of geological data, all of which must be submitted to an obscure UN body, the Commission on the Limits of the Continental Shelf, within 10 years of a country ratifying the Convention on the Law of the Sea. Which is another reason why the question of Arctic sovereignty is suddenly urgent - those deadlines are starting to arrive.

The central disagreement between the Arctic nations concerns the Lomonosov Ridge, a 1,200-mile underwater mountain range, stretching across the pole and connecting Siberia to Ellesmere Island in Canada. Is it part of the Asian continental shelf, as Russia claims, or the North American one, which is the Canadian position? UN scientists will decide, and Russia, Denmark, Norway, Canada and the US are all engaged in research projects to make their cases. (The US has yet to ratify the Convention on the Law of the Sea because of Republican opposition to the UN, but that position now seems certain to be reversed.) The UN will have no power to compel obedience to its judgments, though. "I take [the Russian flag-planting] as a signal that they're going to claim this regardless of what the UN commission is going to say sometime in the future," Eric Posner, a sea law expert at the University of Chicago, has said. "Usually, they make a legalistic argument, which may be implausible, but they make it anyway - and go ahead and do what they want to do." Following the flag-planting, the Russian government proudly announced that it had collected enough data to prove its point: the Lomonosov Range was part of Russia. Canadian, American and Danish research projects are underway to challenge that conclusion.

Still, as Harper understood, the question of who owns the Arctic is only partly a matter of technical data and scientific judgments. What matters is presence. On the one hand, there are facts on paper, in the offices of the Commission on the Limits of the Continental Shelf. And then there are the facts on the ice.

Asserting sovereignty over wild and inhospitable places has always been a matter of grand gestures. In the late 30s, the Nazis attempted to establish their ownership of a part of the Antarctic claimed by Norway by dropping swastikas on spikes from aeroplanes. In the 1940s, Argentina tried something similar on British Antarctic land, dropping metal cylinders containing documents asserting sovereignty. (British navy troops removed the cylinders and thoughtfully returned them to Buenos Aires.) Since 1959, the planet's southern extremes have been governed cooperatively, thanks to an international treaty, but the issue is not settled. Late last year, the Guardian reported that the UK is planning to claim sovereign rights over a huge area of seabed off the Antarctic landmass, in defiance of the treaty's spirit.

In the Arctic, this strangely childish approach to the politics of sovereignty reached its height in the dispute between Canada and Denmark over Hans Island, a tiny, uninhabited lump of rock that lies in a resource-rich channel of water between Greenland and Canada's far north-east. Alerted to the fact that a Canadian company had been carrying out research there, a Danish government minister landed in 1984 and planted a flag attached to a bottle of Danish cognac. Some years later, Canadian soldiers responded by leaving a bottle of Canadian rye whisky. Meanwhile, in a frivolous gesture that nonetheless feels a little passive-aggressive, the Canadian postal service has formally assigned a Canadian postcode to the North Pole: H0H 0H0.

Back in Tuktoyaktuk, I asked Mayor Gruben if he'd ever consider living anywhere else, and he said he wouldn't, because farther south there are "too many trees". "You can't see very far. You look out this window and you can see as far as you want. You can see for ever." Still, things are far from perfect: what Tuktoyaktuk really needs, Gruben said, is an all-weather road to connect it to Inuvik, and thus to the rest of Canada. Partly, no doubt, he believes this because his family business is the local construction firm, which would build it. But almost everyone in the village wants an all-weather road - and in the coming Arctic oil boom, they see an opportunity to get it, along with much else. Since 1984, when they reached a landmark settlement with the Canadian government, the local Inuit, the Inuvialuit, have had extensive rights over the region. So when oil companies seek permission to operate on Inuit land, the Inuit are in a position to demand certain things in return - such as roads and money for schools.

Currently, this back-and-forth is being played out over the Mackenzie gas pipeline, a long-awaited project that would take onshore gas from the far north and pump it south. But the income from the pipeline might pale in comparison with that from offshore oil and an opened Northwest Passage. "The native population along the pipeline route are expecting to make a free living for the rest of their lives," one non-native local man told me, expressing a resentment held by many. "They want horrendous royalties, they want new schools, they want new counselling centres, they want new highways. They want all this stuff given to them."

Then again, perhaps it would just be another way in which long-standing historical injustices are being redressed. In the past few months, Canada has begun making payments, often of C$40,000 or more, to Inuit who were removed from their families and forced to attend "residential schools", where many were abused, in a fate reminiscent of that of Australia's "stolen generation". (The schools began to be closed in the 1970s, but it was a government minister's public apology for the system, in 1998, that led to a spate of lawsuits, culminating in a C$1.9bn settlement.) "They thought they could assimilate us," says Nellie Cournoyea, chair of the Inuvialuit Development Corporation, which occupies the only shiny modern office building in Inuvik and which has investments around the world worth hundreds of millions of dollars. There is a palpable sense of tables being turned. "A lot of the non-aboriginals are on the other side of the fence now," Willard Hagen, the former pilot, who is of Gwich'in Indian ancestry, told me. "And you know what? They don't fucking like it one little bit."

With all this in mind, it wasn't too surprising to hear Gruben assert that however the Arctic sovereignty issue unfolded, the original inhabitants of the polar region would be a force to be reckoned with. "The Northwest Passage? We all know it's ours," he said, a little angrily. "Everyone knows that, and it would be stupid for anyone else to think it's theirs, because we've been using it for thousands of years. The idea that it's the high seas - that's totally ridiculous. It's where we get our fish. It's where we get our whales and seals."

Looking back at the area's history, it might seem wildly optimistic to imagine that the Inuit would end up with a controlling hand in the coming oil boom. But good times were coming to Tuktoyaktuk, Gruben was sure. "Put it this way - there's another Prudhoe Bay out there," he said, referring to the vast oilfield off Alaska. "It's just that nobody's found it yet."

On my last day in Inuvik, I had a hangover. I'd spent the previous evening drinking with some new acquaintances in the town pub - the Mad Trapper - a large, windowless establishment with a slightly frontiersy feel. It was the kind of place in which I wouldn't have been surprised to have witnessed a bar fight or two; instead, what happened was that every half-hour or so an older Inuk would march up to the bar and ring a bell to signal that he was buying a round for everyone present. After our beers had been replenished like this a couple of times, I asked one of my companions what was going on. "Probably a residential school payout," he said, and suddenly I was drinking the most morally complicated lager of my life.

Later that day, I flew back to Edmonton, stopping en route at Yellowknife, the capital of the Northwest Territories. There, we had to get off, to pass through airport security: at Inuvik, where we'd boarded, there had been no metal detectors or luggage x-rays. Printed on the floor of the main hall - yards from a baggage carousel featuring a stuffed polar bear hunting a stuffed seal - there is a map of the northern hemisphere, with the North Pole at its centre: a view from the top of the globe.

It is jolting to look at the world this way, instead of in the normal school-textbook fashion, with America on the left and Australia on the right. You realise how nearly Russia touches the US at the 52 mile-wide Bering Strait; how Europe is even closer to North America at the point where Canada meets Greenland. And then, encircled by the various Arctic nations, there is the polar region itself, not on the fringes or sliding out of view at the top of the map, but unmistakably central, and breathtakingly huge: a pristine wilderness, or, from another point of view, a treasure too tempting to resist. ·