Model Question and Answers for APSC | What are the economic significances of the discovery of oil in the Arctic Sea and its possible environmental consequences?
What are the economic significances of the discovery of oil in the Arctic Sea and its possible environmental consequences?
Ans: According to the USGS (United States Geological Survey), the Arctic may hold 30% of the world's undiscovered natural gas reserves and 12% of the world's undiscovered oil reserves. Environmentalists have protested the exploration.
The Arctic sea has long been thought to contain one of the world's largest oil reserves. However, due to the extreme cold and unfavourable conditions, no concrete exploration plans could be implemented. Because of increased ice melt (as a result of global warming), this region is now accessible, arousing economic interest rather than concern about the ice melt.
The economic significance of the discovery of oil:
- There will be an abundance of cheap Increased global growth potential as a result of more affordable energy.
- Reduced reliance on the Middle East region (Gulf nations), altering the global community's geopolitical and economic relationships.
- Increased investment and job creation through new oil well drilling and the establishment of necessary backward and forward linkages.
- The commercial fishing industry in this region would also develop more quickly with the new infrastructure.
- Boost the domestic and global economies, with positive spillover effects on other sectors of the economy, increasing GDP.
- Because these reserves are offshore, exploration is more accessible and less expensive, though the climate is a major challenge.
Possible environmental consequences:
- Permafrost in this region acts as a carbon sink. Greenhouse gases trapped within them are potent, and when released through drilling, they have the potential to accelerate global warming.
- Increased carbon emissions from drilling in a fragile ecosystem can throw the ecosystem off balance.
- The danger of an oil spill and the inability to clean it up. The region's cold and inaccessibility make disaster response extremely difficult. Furthermore, a lack of sunlight results in a slower rate of degradation and a longer duration of any incident/accident.
- Ecosystem disruption can harm the region's vulnerable ecology.
- Increased ice melting as a result of drilling. Drilling pollution can have an impact on local life forms.
Russian energy major Rosneft has announced the discovery of a huge oil deposit in the Pechora Sea containing an estimated 82 million tons of oil. This could open up opportunities for India, which has investments in Russian oil assets in the Far East and has emerged as a key importer of Russian oil. However, environmental concerns are to be kept in mind.