Greenland expects its oil, gas, and minerals to be crucial as it continues its gradual transition to independence, its first US representative said on Apr. 3. "We have begun developing our oil and gas," noted Inuuteq Holm Olsen, who began a 5-year assignment at the Danish Embassy in Washington 2 months ago.
The US Geological Survey estimates there are billions of barrels of oil equivalent offshore Greenland, although there have been no commercial finds, Olsen said during a presentation at GWU's Institute for European, Russian & Eurasian Studies.
"Since 2002, 25 exploratory wells have been drilled off Greenland, mostly off the West Coast," Olsen said. "The four latest licenses which were awarded to consortiums in December were in waters to the east, however."
The country began to take control of its domestic affairs soon after it received home rule in 1979. A 2009 act redefined its relationship to Denmark, and one of Greenland's first steps was to take over the rights and responsibilities for its oil, gas, and minerals, Olsen said.
"It's critical for Greenland to develop its oil, gas, and minerals to become economically self-sufficient," he said. "It's also very much a frontier area—and very environmentally challenging. We can enter into international agreements that are geographically limited to Greenland and don't involve Denmark."
ExxonMobil Corp., Royal Dutch Shell PLC, Chevron Corp., BP PLC, and other multinationals have been partners in consortiums buying offshore licenses there. "Countries like China and South Korea are taking much more active roles in countries like Greenland," Olsen said. "They're new actors who were not present 5-10 years ago."
Relations with US
Greenland could be considered a microcosm for the Arctic in terms of challenges as well as opportunities, Olsen noted. He said the US has been a relatively inactive Arctic Council member until recently when Sec. of State John F. Kerry appointed its first special Arctic representative a year before the US is scheduled to become its chairman. Olsen said the two countries have had a close relationship since World War II, and several US scientists are doing research there.
"We're studying the movement of ice and the problems it can create for oil and gas operations," he said. "We also want to avoid environmental disasters. Our aim is to have a performance-based regulatory regime with the highest standards possible. It's an evolving process, with constantly changing best practices and standards."
Greenland is looking closely at Norway's oil and gas system as a model, particularly its investment fund, but also intends not to ignore social issues stemming from development, Olsen said. "The last thing we want to do is become a spectator," he emphasized.