Energy in a changing North
5 April 2018
THE ARCTIC is increasingly defined by its renewable energy and energy efficiency leadership. As governments, communities and Indigenous peoples respond to climate change goals, clean energy will feature prominently. Oil and gas development will occur where economics, environmental and societal interest align. For many in the region, that development will facilitate additional investments in renewables as Arctic states generally work toward a green transition. This green energy transition will happen at different rates and scales, and over different periods of time across the Arctic. The feasibility and the regional benefits of renewable energy projects are increasingly pertinent to sustainable development in the Arctic.
Included in this dialogue must be local communities and Indigenous peoples as key stakeholders, rights-holders, and energy partners with whom project proponents and governments must engage. Engagement at the local level must include the option to say, ‘yes or no’ to development and provide ways in which concerns or hopes will be addressed. It is important that local peoples are at the table and not represented or misrepresented by outside interests.
The Sustainable Development Working Group’s Arctic Renewable Energy Networks Academy (ARENA), and Arctic Environmental Impact Assessment (Arctic EIA) projects highlight the importance of engaging local and community expertise in sustainable development planning. Benefits of doing so include improved project planning and design, better decision-making, and ensuring more equitable benefits to community and Indigenous stakeholders. The ARENA project demonstrates how a collaborative, circumpolar renewable energy training program is bringing lasting benefits to Indigenous and northern communities in Canada, the U.S, Iceland and Norway. Its unique approach to developing “community energy champions” and having these champions present their stories was an effective demonstration of energy literacy, capacity building and training opportunities as good practices.
Similarly, local communities on the North Slope of Alaska have played a key role in prudent oil field development for more than 40 years through a Cultural Resources Management Plan. Industry and community alignment and collaboration is a must; inclusive multi-layered engagement encourages innovation and project success.
In challenging and remote locations, the sharing of ideas and good practices is often a prerequisite for successful cost-effective projects and technology implementation. Collaboration with multiple stakeholders in the Arctic is important at all levels: local, regional, national and global. The merits of regional oil and gas operator collaboration is demonstrated in the Norwegian sector of the Barents Sea. The Barents Sea Exploration Collaboration (BaSEC) achieved significant savings in operating costs through shared logistics, reduction of environmental footprint and enhanced cooperation on HSE matters. Science – including Indigenous and local knowledge – must be a primary basis for decisions in the energy sector, and Arctic endeavours tend to have high levels of scientific activity within the oil and gas industry itself. Research and education generally follow in the wake of large projects, but it is important to coordinate and cooperate early in project development to reduce the research burden on communities. Local communities should be involved in the scientific work, including sharing of Indigenous knowledge which is a valuable resource. It is wise to incorporate this knowledge base and partner with local experts in a range of fields.
The oil and gas industry is transitioning at an increasing pace to renewables and lower carbon emissions through technological innovations and the gradual shift from oil to gas. Many companies additionally engage in developing low carbon, downstream solutions and fuels including hydrogen. This has important implications for Arctic societies and Arctic businesses wishing to secure sustainability in a low carbon future. More focus on the transition roadmap of the energy industry should be included at the 2019 Arctic Energy Summit. The successful transition to renewable energy is an element that affects all energy and political sectors. Carbon pricing is generally held as the best incentive for carbon emission reductions because it is independent of the source of energy and encourages open competition, innovation and technology development. The Norwegian special carbon tax for example, helped Norway become among the lowest carbon emitters. This is highly relevant for the Arctic energy debate since there are clear expectations of the lowest possible carbon emissions from future energy production including oil and gas and other industrial activities in the Arctic.
In addition to lower carbon emissions, Arctic states must remain focused on addressing “energy poverty” which refers to the lack of access to modern, reliable and affordable energy supplies. Reducing transaction costs for northerners will result in improved living and economic conditions, and high cost energy will negatively impact the sustainable development of the region. Meeting affordability goals while increasing clean energy development is the objective Arctic states and others – including the investor and shareholder community – must consider in spending capital on Arctic energy projects infrastructure, industrial projects and societal development projects. Policies for which sustainability is a key component will influence future decision-making by all.
NILS ANDREASSEN is executive director of The Institute of the North.
Long-term investors (LTIs) bring a unique set of resources that make them ideal partners for sustainable development. JAMES E. PASS addresses the benefits of LTIs in the Arctic.
CINDY DICKSON, executive director of the Arctic Athabaskan Council (Canada) spoke with us about the realities and challenges of development in the Arctic.