With Greenland confronting major environmental and economic challenges, Premier Aleqa Hammond has called for developing the nation’s natural resources while protecting the environment and dealing with the challenges of climate change. Hammond addressed these issues during a 24 September forum on Greenland’s natural resource development, held in Washington, D. C.
The country needs to diversify its economy with mineral and oil and gas development, Hammond said at the forum, which was held at the Brookings Institution. Fisheries currently account for about 90% of Greenland’s exports.
“Greenland is a frontier nation when it comes to minerals and oil exploration, but we have worked hard to develop the natural resource extraction sector,” Hammond said. She noted that because of Greenland’s strong democratic institutions and legal framework, it differs from some other countries that are considered frontier areas for development.
More than 150 exploration licenses have been granted in the mining sector. Although only a small number of those licenses may eventually turn into active projects, there is “a realistic prospect” of having three to five new mines operating in Greenland within 5 years, according to Hammond.
Some prospects for mining include a planned iron ore project near Nuuk, Greenland’s capital. Greenland also has two of the largest known rare earth element deposits outside of China and a zinc and lead deposit that could be among the 10 largest zinc mines in the world. In addition, the country—an autonomous region within the Kingdom of Denmark—could reach a political agreement with Denmark later this fall about uranium mining in Greenland.
Effects of the Global Downturn
Since 2002, the country has awarded more than 20 exploration and exploitation license blocks offshore to 14 different oil companies, and it recently released oil and gas licensing rounds for 2014 and 2018. However, movement toward developing these blocks has been slow. “We are aware that things take time. We continue to be optimistic on the prospects we have,” Hammond said.
The reason these prospects have been slow in developing may be found in a Brookings report issued at the forum. The Greenland Gold Rush: Promise and Pitfalls of Greenland’s Energy and Mineral Resources concludes that although large-scale mining eventually will take place in Greenland, the timing could be delayed due to a drop in global commodity prices and the lingering impact of the global recession. Oil development also could be delayed due to the technically demanding conditions and the shale oil boom in North America that has made less expensive oil available.
Changing Strategies for Changing Landscapes
Underlying Greenland’s push for natural resources exploration are several factors. These include the country’s potentially rich reserves, economic changes brought about by the Self-Government Act of 2009, and demographic shifts that include an aging population. Another key factor is that climate change is making it difficult for hunters and fishers to make a living, but it also could expose more areas to potential development.
“We simply refuse to be victimized by climate change,” Hammond said. “The challenges we are facing with the climate change require that we have to adapt to the new opportunities that the country is bringing along.”
“The new opportunity is our fjords being ice-free during winter. Our access to the mountains and the geologically exciting places is easier than ever before. And the ice is no longer the biggest obstacle for us to do more explorations than we ever did before,” she added.
Greenland is poised to take advantage of this opportunity, Hammond said. “A unique natural environment and extreme conditions that the people always had endured characterize Greenland and the Arctic. There are no other people who are more aware and concerned about this as we pursue mining and oil activities. We are the ones who will be affected directly if, God forbid, a disaster happens in our environment. We do not see this issue as a choice between environment and industrial development,” she said, noting that the two can work together. “It is a challenge to operate in this kind of environment, but new technology, standards, and practices continue to improve so we don’t have to repeat past mistakes in earlier centuries.”
Offshore oil and gas resources could be developed without harming fisheries, she said. “That Greenland finds mineral extraction important doesn’t mean that it has to be paid [for] with our fisheries,” she said. “It is possible to be an oil nation or a mineral nation, also at the same time be a great fishing nation, [and] at the same time still be a great tourism destination.”
Arctic Council stakeholders have a major focus on environmental issues, Hammond said, adding, “We need to do so much more to deal with risks that new activities and pressures [in] the Arctic pose, in particular regarding maritime safety, mapping, oil spill prevention, preparedness, and surveillance.”
The Self-Government Act has been something of a two-edged sword, she said. It has provided Greenland with extended autonomy from Denmark—and the sole competence for Greenlandic oil, gas, and mineral resources. The act, however, also froze Denmark’s annual block grant, which provides more than half of Greenland’s government revenue, at 2009 levels. This has pushed Greenland to find other streams of revenue. Hammond said that natural resource development could provide jobs for Greenlanders. However, she also acknowledged that to develop those resources, the country—with a population of just 56,000—would have to bring in workers, who could have an impact on Greenland’s traditions, culture, and priorities.
Greenland’s mineral potential “is really very good, but it’s something that is a long haul,” said panelist Minik Rosing, professor of geology at the University of Copenhagen. Rosing said that Greenland is extremely well studied but underexplored in terms of economy-specific exploration projects. “The fact that Greenland is relatively well-known geologically means that the chance of running into unexpected, very large-scale finds is actually relatively small,” he said. “On the other hand, the ability to find smaller deposits is much greater because you have a framework that you can understand the geology in, and that means that you can direct your efforts to where the opportunities are best.”
On the panel, Charles Ebinger, director of the Brookings Institution’s Energy Security Initiative and senior fellow in foreign policy, said that there is wide agreement that Greenland possesses vast treasure troves of minerals and energy resources. However, he said, the mineral resource development timeline “may be overly ambitious,” and the government “would be advised to manage public expectations.”
He also responded to Hammond’s comment that Greenland has “adopted some of the strictest environmental standards and regulations.” Ebinger said that although Greenland “has been appropriately cautious” in its efforts to develop an effective regulatory framework, there are still key issues that need to be addressed regarding transparency and the effective separation between the regulatory authority and those involved in policy formulation.
Randy Showstack, Staff Writer