Ladies and Gentlemen,
It is a pleasure for me to be here today and address the 2013 Arctic Energy Summit and let me start by thanking Institute of the North, the Arctic Portal, the National Energy Authority, the town of Akureyri and other partners for organising this important and timely event. You have chosen the perfect location for convening the Summit as Akureyri, apart from being a vibrant and beautiful town, is the host of various Arctic institutions and activities that are in the forefront of scientific research and debate on developments in the Arctic here in Iceland.
I can see from your very extensive programme that you have covered a lot of ground for the past three days and had, no doubt, interesting discussions on a host of issues. Let me, at this closing session, briefly offer you my thoughts and perspectives on the Arctic in general and the energy aspect in particular.
One could say that we are sitting in the front row of witnessing climate change and its consequences here in the High North. The changes are occurring at an even faster pace than anticipated; they are multifaceted and affect our societies in various ways – economically, socially, environmentally, and in terms of security. The changes entail opportunities and challenges alike, both of which can only be addressed through co-operation.
This is why convening a multidimensional event like this one is so valuable as policy makers, community leaders, scientists, academics, industries and energy professionals come together and exchange views on a topic that is not futuristic by definition, but very current and attracting ever more attention worldwide.
My government has identified developments in the Arctic as a priority in its foreign policy. There is a broad acceptance, even consensus, in the parliament when it comes to the Arctic – a rare thing in Icelandic politics these last months and years. Our ambition is to maintain and foster this cohesion and continue to build on, and develop, the principles that underpin the Arctic policy that was unanimously expected to in Althingi in 2011.
A holistic approach is needed to address the opportunities and challenges that we are facing in the Arctic. Therefore, this week, my government decided to establish a Committee of Ministers on Arctic Affairs, which I as Prime Minister will preside over. Thereby a whole-of government approach is applied, cutting across the various dimensions and complexities that characterise developments in the Arctic.
Given this broader background, let me now focus my remarks on the economic and energy aspects.
I believe the Arctic will play a significant role in the long-term energy development of the world. In this respect, you will, no doubt, have discussed numbers and figures during your working sessions. And, indeed, estimates need to be taken with caution. However, I believe most agree that there is an enormous untapped potential when it comes to the extraction of oil and gas (and valuable minerals) in the Arctic. Some estimates even say nearly a quarter of the world's undiscovered oil and gas.
Here, let me emphasise two points:
Firstly, for this scenario to materialise and develop in a favourable direction, we as governments, but also businesses, industry and other stakeholders, need to prepare in advance, build on each other strengths and add capacities where needed. We also need to pay full attention to the inevitable challenges that increased economic and human activities entail in this highly complex and environmentally sensitive region.
Let me start on the opportunity side from the Icelandic perspective.
We see increasing evidence point to considerable oil and gas reserves in our own Dreki area, off the east coast of Northern Greenland and in Jan Mayen waters. In a regional context, although there are currently some uncertainties surrounding the Jan Mayen area, it seems sensible to regard these as one entity as infrastructure and service for this area will in all likelihood be interlinked. In addition, the opening up of alternative transportation routes put Iceland in a favourable geostrategic position, not least here in the north and eastern part of the country where know-how, international airports, deep and ice-free fjords and port potentials allow for the provision of trans-shipping and other related services. This is a scenario that we need to prepare for, and we are already starting to prepare.
On the more challenging side, my government, in close co-operation with myriad of stakeholders, is also looking into the possibility of establishing an international rescue and response centre in Iceland.
This approach – to merry the potential economic advantages with the accompanying environmental and security challenges – is an imperative one from my standpoint and, let me emphasise this: it cannot only be the responsibility of the State. Here, other stakeholders like municipalities, businesses, industries and even the academia and the scientific communities all have a role to play.
My second point concerns sustainability.
It is important that governments, industries and other relevant stakeholders look towards the future and continue to develop renewable energy resources in tandem with responsible utilisation of non-renewable energy sources like oil and gas.
Here, I believe Iceland is in a particularly good position to lead by example. Almost 100% of Iceland's electricity and heating today comes from renewables, mainly hydro and geothermal. We have also been successful in exporting renewables´ knowledge and expertise, not least geothermal in Eastern Africa, but also hydro closer to home, including in Greenland. Hydro, geothermal, wind, ocean or solar power will not resolve all our problems but those are becoming increasingly technologically accessible and reliable energy sources and could be utilised by millions of people worldwide for electricity and heating, including in the Arctic.
Therefore, as we carefully tread the path towards increased extraction of oil and gas in the Arctic, we need to continue to invest in renewable energy technology and resources. In the case of Iceland, I could foresee that not only would we apply the highest environmental standards in extracting oil and gas in Dreki and other potential oil fields off Iceland, but also make use of the potential material wealth and dividends to invest further in human capital, necessary infrastructures and alternative energy resources.
My government´s intention to establish a state oil company, which will administer licences for oil and gas production and lay the basis for ensuring that the potential benefits are utilised by society as a whole and on a long-term basis, is a part of this approach. This way, we can reap the potential economic benefits of extracting oil and gas and, at the same time, address the importance of sustainability and human investment.
The sometimes phrased “Arctic paradox” of contributing to climate change by utilising non-renewable resources does not, if properly handled, necessarily have to be a contradiction in terms.
Our common aim should be for the Arctic to be a sustainable region in the long-term, but not a short-term source of exportable valuables. The history of the High North is one of boost and boom economies where the Arctic residents and indigenous peoples have sometimes been left behind. As we look optimisticaly towards the future we must also learn from the past.
Ladies and Gentlemen,
For centuries, Iceland´s economic well-being and livelihood has been shaped by the natural riches and climatic conditions of the North. My country has, therefore, vested interests in the favourable development of the Arctic.
I am optimistic that we will be able to find the necessary balances between exploitation and preservation and address in good co-operation opportunities and challenges alike.
I base my optimism partly on the fact that the Arctic is a well governed area. The institutions and legal arrangements in the region are firmly in place. The Arctic Council is developing with self-confidence into a decision-making body with an ever growing international attention and attraction. In Kiruna last May, the Council rightly welcomed the interest of big powers like China, India, the EU, Japan and South Korea. Moreover, all Arctic states agree that the United Nations Convention on the Law of the Sea should be our guiding light in resolving legal matters and any outstanding disputes. Indeed, the Arctic states have a history and good record in resolving their differences in a cordial and peaceful manner.
The Arctic states also agree on the need to co-operate on prevention and response in addressing the potential opportunities and challenges ahead of us. In recent months and years, two legally binding agreements on Search and Rescue and Oil Spill Response have been negotiated and agreed to, and an Arctic Chamber of Commerce is currently being developed. And individually, although at a different pace and scale, the Arctic States are building their capacities in various ways and coming together for exercises – most recently in a Search and Rescue exercise off the eastern coast of Greenland.
There may be small nuances and differences in our positions to the Arctic, but by and large we share the same vision of co-habitation and co-operation. This was evident in my recent conversations with Prime Minister Médvédev and President Obama alike, as well as in discussions with my Nordic and West-Nordic colleagues.
Ladies and Gentlemen,
I hope you can take from my remarks that my government remains fully committed to the Arctic and striking the necessary balances when it comes to exploiting economic opportunities and addressing the challenges and long-term sustainability. I hope I have also made it clear that this is not the sole responsibility of governments. This is, again, why a gathering like the Arctic Energy Summit is so important and useful – to have the whole spectrum of stakeholders and interested parties coming together and exchanging views on a topic that concerns us all.
You have also heard that I am optimistic when it comes to the Arctic and its positive development. In part I base my optimism on the faith I have in ourselves as responsible states and actors, and on the governing structures we have successfully established in the Arctic.
So, although the ice is melting, we still find ourselves on fairly solid footing. But we, collectively, must remember to tread carefully as the ice is, by definition, slippery. Thank you.