The great Arctic Circle oil rush

Melting icecaps are giving way to oil-rich waters — that the U.S. can’t claim

(Fortune Magazine) — It’s an irony that even Al Gore might appreciate. As global warming causes the polar icecaps to recede, potentially oil-rich seabeds are being uncovered beneath the Arctic Circle in the suddenly navigable — and drillable — territory.

The area has long been thought to hold substantial reserves: Some say up to 25% of the world’s undiscovered oil and natural gas may lie below the thawing ice.



But as the countries bordering the Arctic hammer out who can lay claim to what parts of the ocean, one major player is missing: the U.S. Why? Because of an unlikely spat between Big Oil and a group of Republicans over the UN treaty that governs who can claim rights to those waters.

Back in 1982, the United Nations Convention on the Law of the Sea went into effect, a treaty that defined ocean boundaries and set up regulations for ship traffic. The U.S. signed the treaty in 1994, but the Senate refused to ratify it, opposing the idea of UN sovereignty.

But what was then just a diplomatic absence is now seen as a lapse in judgment that could cost billions of dollars. Under Law of the Sea, countries are entitled to control any waters above landmasses that extend from their continental shelf.

If the U.S. were to claim that entitlement, it would gain Arctic territory roughly half the size of Alaska. But since the U.S. is not a party to the treaty, many worry that it won’t have a say before the North Pole is sliced up for good.

Fortune