Receding Arctic ice has opened up a speculative oil El Dorado that has got the world’s eight Arctic Council nations ― Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States ― scrambling over conflicting territorial claims in a 21st century land run.

That has pulled Korea and Denmark together in an unlikely partnership to develop oil, natural gas and mineral resources in the Arctic in their so-called “global green growth alliance,” the first economic partnership of its kind anywhere ever.

Officials have met numerous times since the deal was inked in May 2011, most recently when Danish Foreign Minister Villy Sovndal came to Seoul to attend the inauguration ceremony of President Park Geun-hye.

“(Korea and Denmark) have competencies that complement well. Danish companies are smaller with a very high degree of technological development. Korea has large companies that Denmark does not have, and logistics and production capacity that fits well with Danish competencies,” said Sovndal in an exclusive interview with The Korea Herald at the Danish chancery on Feb. 26, one day after the inauguration and just hours after he met with the new president. 

“We have a strategic partnership in our Green Growth Alliance. It is important for us, and it is a benefit to both our countries that we have this close cooperation,” he said.

The potential wealth lying beneath the Arctic’s icy landscape has gotten officials in Korea and Denmark seeing a future oil bonanza.

That said, estimates of exactly how much oil could be found under the Arctic’s fast melting snow vary wildly, but one 2001 U.S. Geological Survey estimates some 110 billion barrels of oil could rest under the seabed off the coast of northeastern Greenland, an autonomous territory belonging to Denmark. That is nearly 10 percent of the world’s oil.

Arctic drilling is not without formidable risks, however, to say nothing of the enormous environmental controversy involved with disrupting a fragile ecosystem for fossil fuels thought to be at the root of the very climate change that made oil exploitation feasible in the first place.

Feasibility is still a big question, too. Royal Dutch Shell announced on Feb. 27 that it abandoned operations at sites in the Beaufort and Chukchi Seas in the Arctic and off the coast of Alaska, at least for this year.

Arctic conditions are unforgiving. Storms are fierce and freezing cold, and the potential for loose, life-threatening ice slamming against ships, equipment and workers is real.

Shell’s high profile mishaps led U.S. authorities to re-examine the feasibility of drilling safely in dangerous Arctic conditions. Shell reportedly invested about $3.5 billion in Arctic exploration, without a single sustainable operation to show for its efforts.

Concerned less for Shell’s bottom line and more for the potential impact of an Arctic oil spill, environmentalists have long called for a moratorium on Arctic oil exploration.

“We have seen from Shell’s very public failures in Alaska recently that safe Arctic drilling is an oxymoron. No company can drill there safely and cleaning up an accident in the icy waters off Greenland would be nigh-on impossible,” said Ben Ayliffe, head of Arctic oil at Greenpeace International.

“At the same time, drilling for more of the oil that is causing the Arctic to melt at ever-faster rates is reckless in the extreme. We should be shifting toward a cutting-edge, low-carbon economy rather than going to the ends of the earth to look for the last drops of oil in ever more remote and fragile environments.”

“That is the wrong way to put it,” Sovndal said. “I agree very much that we need to do what we can to hinder climate change that is taking place,” adding that the Korean-Danish green growth alliance “is one of the answers to that challenge.”

“What we can do is to have very high standards when exploiting the minerals and the oil to prevent global heating and CO2 emissions.”

Ayliffe said companies should not invest in Arctic drilling.

“Greenpeace believes countries should stay out of any form of investments in oil extraction in the Arctic, and this certainly applies to South Korea’s investments in Greenland oil exploration.”

It appears too early to tell what will be the role and scope of Korea’s participation in Arctic energy exploration and extraction. The next few months could define Korea’s participation in Arctic energy exploration and extraction in a big way.

The Arctic Council will meet in Stadshuset in Kiruna, Northern Sweden to decide on whether Korea can gain permanent observer status along with Japan and Singapore, among others. The council decision in May will determine the parameters of Korea’s participation in the Arctic.

For its part, Denmark is openly pushing for Korea’s admission as a permanent observer.

“It is important that countries that have something to deliver to the table should be observers,” said Sovndal. “Korea is an important shipping nation. We want Korea to become observers.”

Officials in the Ministry of Foreign Affairs and Trade said it was still too early to tell what role Korea would play.

Kang Bae-soo, director of West European Affairs at MOFAT, said Korea and Denmark were still in the early stages of outlining the specific role Korean companies would play in oil and natural gas exploration.

“But what we have done is establish guidelines and signed many MOUs between the relevant ministries of our two governments, like the ministry of industry,” he said. “We are still in the early stages.”

“Permanent observer status is important for Korea in order to participate in scientific research by the council on the effects of climate change in the Arctic which affects all mankind,” said Yuh Pok-keun, director-general at MOFAT’s International Law Division.

Yuh was reluctant to talk about the commercial aspects of Korea’s Arctic involvement. Instead he emphasized the scientific research Korea could conduct into the effects of climate change if the East Asian nation gained permanent observer status.

Yuh did concede, however, that if Arctic oil extraction looked viable, “of course Korean firms would be interested,” adding “many countries have interests in Arctic mineral resource exploitation.”

By Philip Iglauer (ephilip2011@heraldcorp.com)