Greenland bans oil exploration on its territory

This is a first in the region highly coveted by oil companies. This Friday, Greenland banned oil exploration in its region. The government of Mute Egede considered this type of activity both harmful and unprofitable to the region.

This is the first major environmental legislation for this government as a result of a coalition between leftists and environmentalists, after a campaign on the topic of ecology. A law to ban uranium mining is under discussion.

A decision as important as it is symbolic

Greenland has long sought to take advantage of its access to Arctic oil reserves. According to estimates by the United States Institute of Geological Studies, a fifth of undiscovered oil reserves lie north of the Arctic Circle, and Greenlandic waters cover 51 billion barrels of oil. In 2010, the government awarded seven exploration blocks to various large oil companies, including British Shell and Scottish Cairn Energy.

Despite these possibilities, oil exploration projects in Greenland never came to fruition. So the law that went into effect on Friday is largely symbolic, the last project of 2011. Cairn Energy ended two years of unsuccessful exploration that cost a billion dollars.

According to the government, as reported by AFP, “a new economic analysis of the profitability of oil exploration[in Greenland]clearly shows that profitability is low, with yields actually twice as low as oil companies expected.” He highlighted the failure of previous governments to attract business, despite two oil strategy plans introduced since 2014.

Environment, one of the priorities of the government

Another justification for the ban: the protection of the environment, which the government has made its priority. “This is a logical step, as the government is taking the climate crisis seriously,” Natural Resources Minister Naja Nathanielsen said of the legislation in a statement. “The (government) realized that the environmental consequences of oil exploration and extraction are enormous.”

Following its victory last April, the government almost immediately halted the massive uranium mining project of Australia’s Greenland Minerals, which had been in the news for ten years. A brilliant decision, while the project was to create 700 jobs for 37 years and bring the government 200 million euros annually. The population also seems to have won this environmental battle. According to a recent survey, 63% of Greenlanders oppose uranium mining in the country.

Based mainly on fishing, Greenland’s economy is also largely dependent on Danish subsidies. Large active mines closed one by one in the 1990s, and various projects proposed since then had to revive extraction activity to open the third financial valve. If the current government strongly opposes uranium and oil extraction, it has not yet completely abandoned this solution, which would allow the country to achieve economic independence.

Source AFP, Reuters