September 26, 2013

Minister of Natural Resources and Environment of the Russian Federation published the article «The cold calculations» in the newspaper «RBC Daily». Arctic is a leading region in the world on reserves and diversity of mineral raw materials. Most Russian deposits have been located in the Arctic zone - about 600 oil fields, more than 150 gas fields, two nickel deposits and more than 350 gold deposits. Arctic mineral resources ensure about 11% of Russia's national income and almost a quarter of total Russian export. Arctic is «resource crown» of our country.

Russia was one of the first who started to develop deposits in the Arctic zone. However, unlike other Arctic countries we have implemented projects mainly on land. Meanwhile, the largest number of oil, gas and other resources deposits concentrate on the Arctic shelf. In the last ten years there were discovered more than two thirds of the world's hydrocarbon reserves. Inferred resources on the Russian Arctic shelf are about 100 billion tonnes of fuel equivalent. And about 10 billion tonnes of fuel equivalent as proved reserves have been recorded by the State Register of Mineral Reserves.  

The inferred – proved energy reserves ratio shows there is a strong possibility to discovery of large and unique oil and gas fields on the Russian Arctic shelf.  Subsoil of Kara and Barents seas has the greatest mineral resource potential.

For the implementation of the Arctic  mineral resource potential it is needed to form a mechanism of public private partnership in which the RF government carries out regional geological and geophysical study, geological surveying and creates infrastructure,  and operators should do  exploration and mining complex and field facility construction. Government-business cooperation will allow discovering new oil and gas provinces.

It is obvious the development of the Arctic territories will take great infrastructure cash expenditures.  The government is taking unprecedented measures to stimulate the development of shelf resources.  Particularly they provide differentiated tax rate for mineral resource recovery tax, tax incentives, zeroing of export oil duties, import customs duties and VAT for high-tech equipment. Also opportunity to use the lower tax rate for mineral resource recovery tax if price below $ 60 per barrel is afforded.  

As a result of development the Arctic shelf capitalization of the Russian oil and gas sector will be about 150 billion dollars, the state budget will receive about 1.5 trillion dollars additional tax revenues, and the country's GDP will increase by 3%.

But we should realize oil and gas production increase and transportation will be accompanied by the appearance of new anthropogenic pollution sources if we do not use special environmental measures. Especially it must be taken into consideration if we work on the continental shelf. Economic activity on the Arctic territory must comply with the most advanced environmental standards, and its mode is to be very balanced. The Arctic is extremely sensitive to anthropogenic impact, and the cost of failure is very high. As you know, this area is called the «kitchen» of climate and change in the ecological situation in the Arctic may have global implications.

The primary environmental measure in the Arctic region is environmental remedial action.  In the period of intensive development, from the 40s to the 80s of the last century, Arctic ecosystems subjected to unprecedented anthropogenic impact. The Franz Josef Land archipelago is a striking example. Since cuts in military and economic activities on those islands and before now gasoline storages, old metal constructions and pipelines, empty oil barrels threatening oil products spills. A similar picture we can see in many other regions - on the Novaya Zemlya archipelago, Wrangel Island, Chukchi Peninsula.  

Therefore, already in the course of two years the RF Ministry of Natural Resources is working for elimination of environmental damage in the Arctic territories.

Today the Zemlya Alexandry Island and the Guker Island have been almost trashed. Now we are actively working on cleaning of the island Greem-Bell Island. By 2014, the financing of clearing works on Franz Josef Land will be 740 million rubles ($24 millions).

Another important direction over which the RF Ministry of Natural Resources actively work is the establishment and development of protected areas stipulated by the Russian environmental doctrine. Our country plays a key role in the conservation of Arctic ecosystems and their species diversity. About 80% of the Arctic biological diversity live on the territory of Russia in the Arctic - a polar bear, the Putorana bighorn sheep, Laptev walrus, various whale species, the Siberian crane, the red-breasted goose, Bewick's Swan. Many of these animals threatened with extinction.
Organization national parks in the Arctic will allow us to protect the Arctic zone of the negative effects of large industrial and infrastructure projects. At present, only about 5% of the territory and water area of the Russian Arctic have been taken by the state under special protection. This indicator is much higher abroad – about 20-50%.

Finding a balance between resource development for Arctic and maintaining the unique features of this unique ecosystem is truly global challenge. Worthy answer it is possible only in case of consolidation of intellectual and technological capacity of all countries of the Arctic region.

http://rbcdaily.ru/economy/opinion/562949989014555

http://www.mnr.gov.ru/news/detail.php?ID=131458