RUSSIA - Arctic Has 90 Bn Barrels Of Oil.

Scientists of the US Geological Survey (USGS) say the Arctic holds as much as 90 bn barrels of undiscovered oil and has as much undiscovered gas as all the reserves known to exist in Russia. In the first US governmental assessment of the region's resources published on July 24, 2008, the USGS report is likely to add impetus to the race among polar nations, such as Russia, the US, Denmark, Norway and Canada, for control of the region.

The USGS believes the Arctic holds 13% of the world's undiscovered oil, while its 1,669,000 BCF of natural gas were equivalent to 30% of the world's undiscovered gas reserves. The USGS says: "The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on earth".

In August 2008 Russia planted its flag on the sea-bed 4 km under the North Pole, raising fears of a rush to grab the Arctic's mineral resources, particularly its oil and gas deposits. Denmark in May called a summit of the five Arctic powers in Ilulissat, Greenland, to try to restrain competition and reiterate the countries' joint commitment to the UN Law of the Sea Convention which governs territorial waters.

Commercial interest in exploiting the Arctic has also increased, with Shell pushing to help Russia develop gas from the Yamal region. In the US, companies are pushing ever further into the Arctic regions of Alaska, while Denmark has attracted a number of large companies interested in exploring for oil and gas off the coast of Greenland.

Consultants Wood Mackenzie in 2006 estimated the Arctic basins, including those already being developed, held 233 bn barrels of discovered oil and gas with another 166 bn yet to be found, the majority of it gas. Alan Murray, who heads its exploration research and co-authored the 2008 report, noted that the USGS was often more optimistic about potential resources than other research organisations. Murray July 24 said: "These are huge potential volumes, but they are not going to impact supplies or price any time soon. There are still a lot of undeveloped resources that are easier and closer".

The USGS report used a probabilistic methodology and included only undiscovered resources which could be exploited using today's technology. USGS Director Mark Myers on July 24 said: "Before we can make decisions about our future use of oil and gas and related decisions about protecting endangered species, native communities and the health of our planet, we need to know what's out there. With this assessment, we're providing the same information to everyone in the world so that the global community can make those difficult decisions".

Frank O'Donnell, president of the non-profit group Clean Air Watch, said not only did polar bears and other wildlife within the Arctic Circle face losing their habitat due to global warming, they would be hurt by companies searching for oil. He said: "On the one hand you may see this region more accessible [for getting energy supplies], but we're definitely going to pay a different kind of price...you may loose species. The oil industry goes up there and industrialises what has been a pristine area...suddenly it becomes the new Houston".

Yet the Arctic's oil is not intended to replace all the supplies in the rest of the world. It would last much longer by boosting available supplies and possibly reducing US reliance on imported crude in the future, if America developed the resources.

More than half of the undiscovered oil resources are estimated to occur in just three geologic provinces: Arctic Alaska (30 bn barrels), the Amerasia Basin (9.7 bn barrels) and the East Greenland Rift Basins (8.9 bn barrels). More than 70% of the undiscovered natural gas is likely to be in three provinces: the West Siberian Basin (651 TCF), the East Barents Basins (318 TCF) and Arctic Alaska (221 TCF).

Technically recoverable resources are those energy supplies which can be put into the market using currently available technology and industry practices. The USGS said it did not consider economic factors, such as the effects of permanent sea ice or water depths, in its assessment of undiscovered oil and gas resources. Energy companies have already found more than 400 oil and gas fields north of the Arctic Circle. The discovered fields account for about 40 bn barrels of oil, more than 1,100 TCF of gas and 8.5 bn barrels of natural gas liquids (NGLs).