The Dreki Area

In 2007, the Ministry for Industry published a report with a proposal to issue exclusive licenses for exploration and production of oil and gas in the northern part of the Dreki area on the Jan Mayen Ridge, located in the northeast of Iceland. The report also in-cluded a strategic environmental assessment of the proposed plan (Icelandic Ministry of Industry, 2007). The proposal and associated strategic environmental assessment served as basis for the first and second licensing rounds that were conducted in 2009 (first round) and 2012 (second round). Because the first round did not result in any licenses being issued, a decision was made to repeat the process. The results of the second round were the issuing of three licenses: two in 2013 and one in the beginning of 2014. The exploration licenses will last up to 12 years, but may be prolonged to a maximum of 16 years. If exploration is successful, a priority can be given to the license holder for a production license for up to 30 years (National Energy Authority, 2014).

The idea to explore for oil and gas in the Jan Mayen Ridge, however, can be traced back further in time. In 1981 Norway and Iceland reached a bilateral agreement on the delimitation line on the continental shelf in the area between Iceland and Jan Mayen.

The agreement also established cooperation between the two states in connection with the exploration and potential exploitation of hydrocarbon resources in the region. This included joined seismic and magnetic surveys and the right of Iceland to participate with a share of 25 percent in petroleum activities on the Norwegian side of the region and Norway having the same right on the Icelandic side (United Nations, 1981).

Norway has used its right to participate in exploration licenses on the Icelandic side through the company, Petoro Iceland, owned by the Norwegian state. All three licenses have been issued to investors comprising one foreign company, one Icelandic company and Petoro Iceland. The first two licenses were issued in January 2013, one to Faroe Petroleum (67.5 percent), Iceland Petroleum (6.7 percent) and Petoro Iceland (25 percent); the other to Ithaca Petroleum (56.25 percent), Kolvetni (18.75 percent) and Petoro Iceland (25 percent). The third license was issued in January 2014 to CNOOC International (60 percent), Eykon Energy (15 percent) and Petoro Iceland (25 percent) (National Energy Authority, n.d.).

In December 2014, the investors led by Faroe Petroleum returned their license, saying that initial research results did not give promising results, and the investors preferred to focus on other projects in the Arctic with lower risks involved (Unnarsson, 2014).

The other two licenses, however, were still valid as of late 2015.

The report from 2007 includes a strategic environmental impact assessment of the proposal for issuing licenses for oil and gas explorations and production in the Dreki area. Although a strategic environmental assessment is not as detailed as an environmen-tal impact assessment, it does evaluate what could be the key environmenenvironmen-tal impacts.

The report identifies a number of environmental issues that need to be considered,

Figure 2: The Dreki Region

A map showing the Dreki area on the Jan Mayen Ridge, northeast of Iceland (National En-ergy Authority, 2014, p. 2)

such as noise pollution, marine pollution and air pollution. The relationship between oil and gas production and climate change, however, is never mentioned in the report (Icelandic Ministry of Industry, 2007), and this issue never comes up in the comments about the proposal that were received from representatives from 15 stakeholders. In other words, the fact that the burning of the oil and gas resources pumped from the Dreki area would contribute to climate change was not considered relevant when pos-sible environmental impacts are evaluated.

This should come as no surprise, given that the bookkeeping of greenhouse gas emissions that all UNFCCC member states are required to keep is organized around the demand side rather than the supply side. Emissions are tracked by monitoring the users of fossil fuels rather than focusing on those involved in production. This also means that climate policies have, for the most part, aimed at changing behavior on the demand side, assuming that as demand drops, supply will automatically be reduced. As the discussion in Section 2.1 revealed, however, this is not the case. Huge economic interests are at stake, and the fossil fuel industry has deep roots in the power structures that shape global politics. A report from the International Energy Authority has dem-onstrated that global subsidies to the fossil fuel industry are up to six times higher than subsidies for renewable energies (International Energy Agency, 2012), and investors are showing no sign of slowing down, in spite of governments around the world an-nouncing more ambitious climate policies in the future.

In recent years, scientists have tried to estimate how much more of Earth’s fossil fuels can be extracted and burned and still stay within the 2°C limits, identified by the international community as the necessary target in order to avoid severe global warming. A study with results published in Nature suggests that in order to meet the target of 2°C, one-third of global oil reserves, half of gas reserves and over 80 percent of current coal reserves need to remain in the ground between 2010 and 2050 (McGlade

& Ekins, 2015). The authors not only evaluate the overall global share of fossil fuel reserves that can be safely burned, but attempt to map out how much can be used in different regions from the point of view of economic efficiency. As for the Arctic region, they conclude that the 100 billion barrels of oil and 35 trillion cubic meters of gas they estimate to be located within the Arctic Circle should all be classified as unburnable.

McGlade & Ekins do not consider political factors in their analysis, which of course are of crucial importance when it comes to energy and the utilization of fossil fuel re-sources. With an international system, in which sovereign states each try to maximize the benefits from its own resources, giving up the right to utilize resources within its borders seems unthinkable. At the same time, it is clear that the climate crisis will not be avoided unless massive cuts are made in the burning of fossil fuels. With this in mind, analyzing the oil and gas discourses in the Icelandic context, and whether they are related or not related to climate concerns, is a worthy endeavor.