Arctic Yearbook 2012
2007 Sea ice extent in sq km. Source: National Snow and Ice Data Centre
Although signs of dramatic climate change elicited concerns, they also highlighted the economic
opportunities that could result from a warming Arctic, foremost among them opportunities for
resource extraction, shipping and new fisheries. The high cost of oil in 2007-08, which peaked at a
record high of $147/barrel on July, 11 2008, meant that drilling in the expensive and challenging
Arctic environment might not only become much more accessible – it would also become profitable.
Subsequently, big oil began an unprecedented buy-up of oil and gas leases in the western Arctic. In
the summer of 2007 Imperial Oil and Exxon shocked observers with a nearly $600 million CDN bid
that won them a 205,321 hectare exploration lease on the Canadian side of the Beaufort Sea. The
following year saw an even greater increase in interest. In February 2008, Shell and ConocoPhillips
bid nearly $2.7 billion in a competition for drilling rights in the Chukchi Sea – a record for any
Alaskan oil or gas lease. By comparison, the last Chukchi sale, in 1991, generated only $7.1 million.
British Petroleum, which as recently as 2002 had announced that it had no interest in further Arctic
exploration, spent nearly $1.2 billion CDN in a June 2008 auction for oil and gas exploration leases
covering roughly 611,000 hectares of the Beaufort seabed north of Tuktoyaktuk (Huebert, Exner-
Pirot, Lajeunesse and Gulledge, 2012: 40). At the same time, commodity prices, which had been
booming since 2000 owing largely to increased demand from the growing Asian middle class
ensured that a market for the Arctic’s non-hydrocarbon resources would exist for decades to come.