Two out of every three barrels of this oil and 85% of this gas comes from West Siberia. However, as is the case with all oil provinces, the size distribution of its petroleum fields is log-normal and the region’s oil production has entered decline.413 Russian production peaked in 1987-88. Samotlar, one of the largest oil fields in the world, peaked at 3.4 million barrels per day in 1980. It has since dropped over 90%, producing just 300,000 barrels per day from its approximately five thousand wells.414 The region’s three major gas fields have also peaked, and their production is expected to fall 75% by 2030.415 There will always be more pockets to be found, but as discussed in Chapter 3, like any other hydrocarbon province on Earth they are growing exponentially smaller and thus less economical to develop.
West Siberian exploration is therefore shifting away from the middle reaches of the Ob’ River—where most of the basin’s crude oil is found—to the immense concentrations of natural gas found farther north. The largest known natural gas reserves on Earth are found in approximately sixty to one hundred fields in this area. Just offshore is the South Kara Sea, now thought to hold perhaps 1,400 trillion cubic feet more. The Yamal Peninsula, stuffed with natural gas, condensate, and oil, lies at the heart of this bonanza and will doubtless be developed.
While less glamorous than the prospect of proliferating offshore platforms in the Arctic Ocean, 2050 will likely see a great degassing of the Yamal Peninsula, feeding thousands of miles of pipeline heading west to Europe and east to China. It is unclear whether a port can be built on its shallow west coast, or that environmental damages will be avoided, but pipelines will spread across the Yamal. Already, at least two are planned and the first one has just broken ground.416
Pay Dirt
Even from several miles away, through the fogged window of the little airplane and a dreary splatter of rain, I could see the heavy curtain of smoke and glowing spots of orange flame. It was Tolkien’s Mordor brought to life, the soil ripped away to expose pitted blackness beneath. Giant trucks dug away at the spoils like orcs. Near the fuming smokestacks were yellow mountains of pressed sulfur blocks, waste excrement from the transformation of low-grade bitumen into synthetic, crude oil. It was a depressing and evil-looking landscape, at least to anyone who finds boreal wetlands and green pine forest attractive.
It was northern Alberta, not Noril’sk. Beneath me sprawled the open sores of the Athabasca Tar Sands, economic engine of Fort McMurray and almost one-half of the Canadian oil industry. Though they are more commonly called “oil sands,” what they hold is nothing like conventional oil. The pure, light, sweet crude pumped with ease from Saudi oil fields is a dream compared to this stuff. It is tarlike bitumen, a low-grade, sulfur-rich, hydrogen-poor hydrocarbon that has soaked into vast expanses of Alberta sandstone.
Extracting liquid oils from this mess is an extraordinarily invasive, consumptive, and environmentally damaging process. At present, the most common way to do it is strip mining, with about two tons of tar sand needed to obtain a single barrel of oil. Gigantic trucks and shovels scrape the stuff off the surface. Then it is crushed and dumped onto conveyor belts heading to swirling tubs of water. The resulting slurry is piped to an extraction facility, where it is churned in a heated witches’ brew of steam, water, and caustic soda. This splits the bitumen from the sand and clay, which sink to the bottom. The bitumen floats off to an “upgrader” (a sort of refinery) to remove sulfur and add hydrogen (from natural gas), creating synthetic crude oil. The waste liquid and dirt are sent to tailings ponds; the yellow blocks of sulfur are simply stacked up.417
Tar sands are an environmentalist’s nightmare. The extraction process gobbles enormous quantities of energy and water. Migratory birds land in the tailings ponds and die.418 Sulfur dioxide, nitrogen oxides, and particulates are released into the air alongside up to three times more greenhouse gas than released by conventional oil drilling. Depending on the technology used, it takes 2-4 cubic meters of water, and 125-214 cubic meters of natural gas, to produce a single cubic meter of synthetic oil.
The water is pumped from groundwater or diverted from the Athabasca River, reducing inflow to the Peace-Athabasca Delta, a UNESCO World Heritage Site and Ramsar wetland, about 150 kilometers downstream.419 Most mines will operate for about forty years and excavate about a hundred square kilometers of land. No tailings ponds have ever been fully reclaimed, and putting the overburden back afterward mitigates the damage but does not really restore the original ecosystem. Since 1967, when the first mining began, only one square kilometer has been certifiably restored and returned to the public.420 These and other problems have environmental organizations yowling against any further increase in tar sands production.
They face a difficult battle. Short of being outlawed, it’s hard to imagine how the growth of this industry will ever stop. The oil reserves the tar sands contain are estimated at an astonishing 175 billion barrels which, if correct and recoverable, is the second-largest oil endowment on Earth after Saudi Arabia (estimated at 264 billion barrels). That means Alberta holds more oil than Iraq (115 billion barrels), Kuwait (102 billion), Venezuela (99 billion), Russia (79 billion), or Norway (7.5 billion). The cost to produce it has dropped from thirty-five dollars per barrel in 1980 to twenty dollars per barrel in recent years, making even fifty-dollars-per-barrel oil prices very profitable.421 Huge new supplies of natural gas, needed for energy and hydrogen, will come online with construction of the Mackenzie Gas Project, a long-anticipated 1,220-kilometer pipeline that will carry Arctic gas from the Mackenzie Delta area to the tar sands and other North American markets. 422 History tells us that Canada’s adherence to international climate-change treaties crumbles before market forces like these: The tar sands are the biggest reason why Canada not only failed to meet her pledged reduction in carbon dioxide emissions under the Kyoto Protocol (to -6% below 1990 levels), but actually grew them +27% instead.423
So far, about 530 square kilometers have been strip-mined, an area not much greater than the city of Edmonton. But tar sands underlie a staggering 140,000 square kilometers of Alberta, nearly one-fourth of the province and about the size of Bangladesh. Of this large area, about 20%—sixty more Edmontons—are shallow enough for strip mining. The rest can be exploited using underground extraction, which involves injecting 450°F pressurized steam underground for several years to heat the ground, eventually fluidizing the tar enough to pump some of it out.424 This type of underground extraction has the potential to spread across nearly all of northern Alberta. If it does, new pipelines, roads, and towns must follow.
This future springs not simply from my fertile imagination but from cold, hard cash. Those 175 billion barrels of grubby bitumen lie right next door to the world’s largest and friendliest customer, whose other suppliers have either entered decline or soon will. Energy companies are no fools. By early 2009 the government of Canada had already leased more than seventy-nine thousand square kilometers in tar sands contracts. Future production is anticipated to rise from 1.3 million barrels per day today, to 3.5 million by 2018, to 6 million barrels per day by 2040.425 If that black torrent of tar becomes reality, its flow will be nearly ten times greater than the amount of conventional oil flowing south from Alaska’s North Slope today.
America is ready and waiting.
The visual image of Canadian oil flowing from north to south is exactly the right one to hold in mind. Under the North American Free Trade Agreement (NAFTA), it passes over U.S. borders unencumbered by tariff. And compared to the world’s other geopolitical relationships, America and Canada remain two countries in a happy marriage.
Their embrace far transcends the energy industry. It is just one part of a bigger cross-border dependency that has long existed, thanks to friendly borders and the geographic proximity of their neighboring population cores, as described earlier. But this lovers’ gaze has not always been so transfixed. Throughout much of the twentieth century, Canada was focused more on domestic integration than the cross-border sort.
The New Cascadians
But the passage of NAFTA in 1994 marked the beginning of a stunning reorientation in Canada’s political and economic geography. It quickly began to integrate in a north-south direction with parts of the United States, rather than in the old east-west orientation across Canada. Very recent studies of this phenomenon are discovering it runs far deeper than simply increased cross-border trade and traffic; there is an actual melding of cross-border economies under way.426 This is not being steered by Ottawa and Washington but rather by a proliferation of cross-border networks of business groups, chambers of commerce, NGOs, mayors’ councils, and other forms of grassroots enterprise.
The end result of this north-south reorientation is the emergence of new cross-border “super-regions” with distinct economic footprints and cultural auras of their own. Names are even being floated for two of them. “Cascadia” refers to the melding economies of the Pacific Northwest and western Canada, centered on the Vancouver-Seattle-Portland corridor. “Atlantica” links upstate New York, Vermont, New Hampshire, and Maine with Nova Scotia, New Brunswick, and Prince Edward Island.427 A key super-region is the Toronto-Hamilton-Detroit corridor integrating southern Ontario—the industrial heart of Canada—with Michigan’s automotive industry and manufacturing sectors in Indiana, Ohio, and other Midwestern states.
For each of these emerging super-regions, the two respective halves across the U.S.-Canada border are also knitting culturally. New surveys reveal that the social values of Atlantic Canada now resemble those of the U.S. East Coast, whereas those of Alberta and British Columbia now resemble those of the western United States.428 Apparently, proximal Canadians and Americans identify better with each other than with their own countrymen living farther away. In North America big doors are opening wide along this long border, with the widest hallways running north and south.
The Friendly Globalizers
The happily knitting border between Canada and the United States is not unique in the North. Unlike the Arctic Ocean seabed, territorial boundaries on land are long settled and calm among the eight NORC countries.429 Borders between Norway, Sweden, and Finland are among the friendliest in the world and their citizens (like Cascadians) identify more closely with each other than with the rest of Europe. The closest thing to a troubled border, if there is one, zigzags through more than seven hundred miles of forest to disentangle Finland from Russia.
Throughout history the Finns were subjugated, first by Sweden and then by Russia, before capitalizing on the disarray of the Bolshevik Revolution to win peaceful independence from Russia in 1917. Finland has been grappling with how to coexist with her giant and occasionally unruly eastern neighbor ever since. The countries fought twice during World War II, and Finland was forced to cede substantial territories to the Soviet Union. One of these, Finnish Karelia, contains the beautiful port city of Viipuri (now Vyborg) and remains a source of great bitterness to Finns today. From time to time Finnish politicians make noises about seeking its return. Less noticed was the loss of Petsamo (now Pechenga), a small corridor that once connected Finland to the Arctic Ocean. Its loss shuts Finland out of any UNCLOS claim there. It is reasonable to expect that Finnish regret over this region will rise in the coming decades.
But none of this renders the Fenno-Russia border militarized or tense. A regional cross-border economy in roundwood (unmilled lumber) is emerging between the two countries, not unlike the one between Canada and the United States.430 Many Russians now own vacation homes in Finland—to the delight of local merchants and consternation of old-timers—and Finnish tourists pour into Karelia. In fact, the only reason this border even warrants mention is because all the other borders around the Northern Rim are so placid. Compared with other neighboring countries around the world, the NORCs are an extraordinarily peaceful bunch.
They also rank among the most rapidly globalizing, business-friendly countries on Earth. Compiled on the following page are index performance scores for fifteen countries, representing the six largest national economies, the BRICs, and the NORCs.431 These respected indices ingest a wide range of econometric and other data to derive country performance rankings in things like openness to trade, tendency to make war, treatment of citizens, and so on. Rather than dissect the merits or agendas of each index, I simply provide rank-based scores from all of them.432 Each uses a different scoring system, so they are presented as percentiles for easy comparison. A score of 86, for example, means a country ranked higher than 86% of all of the countries in the world that are measured by that particular index. Also shown is a single composite score for each country, averaged across the five numeric indices.
A remarkable story leaps from these numbers. With the exception of Russia, the NORC countries are the most stable, trade-liberal, rapidly globalizing players on the planet. Who knew that Denmark and Canada are even more open to free trade than Japan, Germany, or the United States? Of particular relevance to energy production is that this openness also pervades the oil and gas industry, in contrast to the worldwide trend toward nationalization described in Chapter 3.433 Civil and political freedoms run remarkably high except in Russia. Six are among the most peaceful nations in the world. Viewed collectively, the NORCs appear particularly well-positioned to succeed in our rapidly integrating world.
Aside from cold winters, NORC cities also count among the world’s happiest places to live. According to the London-based Economist Intelligence
Some Common Measures of Economic of Economic Globalization, Percefulness, and Civil Liberties, Relative to the World
(Source: 2009 Index of Economic Freedom, Heritage Foundation, and Wall Street Journal (179 countries); 2008 Economic Freedom of the World Index (141 countries); 2009 KOF Index of Globalization (208 countries); 2009 Global Peace Index (144 countries); 2008 Economist Intelligence Unit Democracy Index (167 countries); 2009 Freedom in the World Country Rankings (193 countries))
Unit, four of them rank among the world’s top ten most livable cities (with Vancouver in first place), citing low crime, little threat from political instability or terrorism, and excellence in education, health care, infrastructure, and culture.434 Remember Lagos, Dhaka, and Karachi, three megacities of 2025 presented in Chapter 2? They scored in the bottom ten.
Acceptance of Global Immigrants
But it takes more than just natural resources in the ground, ameliorating climate, stable governance, and pleasant cities for a civilization to expand. It also takes people.
Like the rest of the developed world, all eight NORC countries are graying and fertility rates dropping. The Russian Federation also faces a sharp population contraction (projected to fall -17% by 2050, see table on p. 173). However, the other seven are expected to grow anywhere from +1% to +31% by 2050. Much of this growth will come from international immigration.435 Thus, global flows of people are already changing the face of the Northern Rim and are critically important to how its future will unfold.
The specific rules and quotas of future immigration policies are impossible to divine here. However, an examination of current laws and trends reveals some surprisingly different attitudes toward foreigners among the NORC countries. National policies differ on the number, origin, and skill sets of foreign immigrants admitted. And culturally, some places are more welcoming than others.
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br /> The Russian Federation faces the bleakest prospect. Its demographics are in free fall, with sixteen people dying for every ten new babies being born.436 Its total population is now dropping by nearly eigtht hundred thousand people per year. After the collapse of the Soviet Union, some three million ethnic Russians moved from former satellites into the new Russian Federation, but by 2003 that wave of return had largely ended. In an effort to repatriate more, the Putin administration created a national program to recruit twenty million Russian expatriates to “return home” in 2006. However, it now appears impossible to attract more than two and a half million in total, even counting migrants from the Baltic States.437
Russia’s labor pool for construction, agriculture, and other seasonal work thus depends heavily on migrants from Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan, Moldova, Tajikistan, and—increasingly—China in the Far East. Many are “irregular migrants” and would be called “undocumented workers” or “illegal aliens” in the United States. Perhaps ten million may be living inside Russia. Up to a million Tajiks—almost half of the entire workforce of Tajikistan—migrate to Russia in search of seasonal work each year.
Russian leaders have long realized they need to raise legal immigration into the country, but policies to do so are unpopular. Before the spring 2008 elections the Putin administration slashed the quota for foreign labor migrants from six million to two, and several years earlier abolished laws allowing multinational firms to easily hire skilled foreign workers. The reason for such moves is purely political, as Russia suffers from widespread xenophobia. Resentment of foreign migrants runs deep, especially in large cities where they tend to concentrate. In 2008 alone, at least 525 migrants suffered hate-crime attacks, with 97 of them killed.438
The World in 2050: Four Forces Shaping Civilization's Northern Future Page 22
