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The role of the Arctic in future global petroleum supply

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Abstract

The Arctic has a substantial share of global petroleum resources, but at higher costs than in most other petroleum provinces. Arctic states and petroleum companies are carefully considering the potential for future extraction in the Arctic. This paper studies the oil and gas supply from 6 arctic regions during 2010-2050 along with global economic growth and different assumptions regarding petroleum prices and resource endowments. Supply is calculated based on a global model of oil and gas markets. The data on undiscovered resources for the Arctic is based on the estimates by USGS. Sensitivity studies are carried out for two alternative price scenarios and for a 50 per cent reduction of arctic undiscovered resources compared with the USGS 2008 resource estimate. Although a major part of the undiscovered arctic petroleum resources is natural gas, our results show that the relative importance of the Arctic as a world gas supplier will decline, while its importance as a global oil producer may be maintained. We also show that less than full access to undiscovered oil resources will have minor effect on total arctic oil production and a marginal effect on arctic gas extraction. The reason is that Arctic Russia is an important petroleum producer with a sufficiently large stock of already discovered resources to support their petroleum production before 2050.

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  • Lars Lindholt & Solveig Glomsrød, 2011. "The role of the Arctic in future global petroleum supply," Discussion Papers 645, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:645
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    References listed on IDEAS

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    1. Finn Roar Aune & Solveig Glomsrød & Lars Lindholt & Knut Einar Rosendahl, 2005. "Are high oil prices profitable for OPEC in the long run?," Discussion Papers 416, Statistics Norway, Research Department.
    2. Stern, Jonathan, 2005. "The Future of Russian Gas and Gazprom," OUP Catalogue, Oxford University Press, number 9780197300312.
    3. Finn Roar Aune & Klaus Mohn & Petter Osmundsen & Knut Einar Rosendahl, 2007. "Industry restructuring, OPEC response - and oil price formation," Discussion Papers 511, Statistics Norway, Research Department.
    4. repec:aen:journl:hh-se-a04 is not listed on IDEAS
    5. repec:aen:journl:2010v31-02-a02 is not listed on IDEAS
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    1. Ekaterina Samylovskaya & Alexey Makhovikov & Alexander Lutonin & Dmitry Medvedev & Regina-Elizaveta Kudryavtseva, 2022. "Digital Technologies in Arctic Oil and Gas Resources Extraction: Global Trends and Russian Experience," Resources, MDPI, vol. 11(3), pages 1-30, March.
    2. L. Goncharenko I. & I. Nikulkina V. & Л. Гончаренко И. & И. Никулкина В., 2018. "Налоговые и таможенные механизмы регулирования развития Арктической зоны Российской Федерации с позиции укрепления национальных интересов // Tax and Customs Mechanisms for Regulation of the Russian Arctic Development from the Standpoint of Strengthen," Экономика. Налоги. Право // Economics, taxes & law, ФГОБУ "Финансовый университет при Правительстве Российской Федерации" // Financial University under The Government of Russian Federation, vol. 11(6), pages 143-151.
    3. Shuaiyu Yao & Mengmeng Chen & Dmitri Muravev & Wendi Ouyang, 2021. "Eco-Efficiency Analysis for the Russian Cities along the Northern Sea Route: A Data Envelopment Analysis Approach Using an Epsilon-Based Measure Model," IJERPH, MDPI, vol. 18(11), pages 1-16, June.
    4. Lindholt, Lars & Glomsrød, Solveig, 2012. "The Arctic: No big bonanza for the global petroleum industry," Energy Economics, Elsevier, vol. 34(5), pages 1465-1474.

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    Keywords

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    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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