Drop in Oil Prices Hammering Northern Economies
The low price of oil may deter new investments in locations where the costs of oil exploration and extraction are high, such as in the Arctic.
Later this year, Norway will release 57 blocks in frontier areas on the Norwegian continental shelf for oil exploration, including 11 blocks in the Barents Sea. Adding infrastructure in the area would be prohibitively expensive, Arne Liaklev, a County Parliament member for the Green Party in Finnmark, told the Independent Barents Observer. Last week, Norway said its oil industry was “in crisis.”
Meanwhile, Reuters reports that Russia’s budget will fall short $38.6 billion in income due to falling oil prices. Its current budget was calculated based on a price for oil nearly double the current trading price.
The price of Brent Crude, which is used as an international benchmark, dipped below $28 before recovering slightly.
Scientists have said that more than two-thirds of oil reserves, including all Arctic oil deposits, must remain untapped if the planet is to have a chance of staying below 2C (3.8F) warming.
The Arctic Journal reminds us that OPEC will release its monthly oil market report today.
Nunavut’s Fishing Sector Gains with Sinking Canadian Dollar, Oil Prices
The sinking Canadian dollar and low oil prices could mean rising grocery bills, but fishing sector gains for Nunavut residents, reports the CBC.
The Canadian dollar will drop to 59 cents US in 2016, according to experts. The dip has led to rising grocery bills across Canada. Most fruits and vegetables consumed in Canada are imported.
But it will have a larger effect on people living in remote and northern communities. In Nunavut, residents typically pay twice as much for staples as the average Canadian.
But Nunavut’s fishing sector could benefit from the falling dollar and the drop in oil prices, according to the CBC report. Most fishing products are sold to the U.S., which adds up to a 15–20 percent increase in the market value of fish from Nunavut. The fishing industry is also spending less money on oil and gasoline to run their operations.
- The New York Times: What Does it Mean When Animals Suffer a Vast Die-Off?
- Climate Central: Denmark Just Set a Wind Power Record … Again
- The Diplomat: Towards the Thaw: Seeking Clarity in China-Norway Relations
Top image: Russian prime minister Dmitry Medvedev during an interview with Russian television channels in December 2015. Low oil prices are hammering Russian budget revenues. (Sputnik, Government Pool via AP/Yekaterina Shtukina)