THE CANADIAN ARCTIC: A HANDBOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00555R000200150002-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 37
• Document Creation Date: December 22, 2016
• Document Release Date: January 19, 2011
• Sequence Number: 2
• Publication Date: August 1, 1983
• Content Type: REPORT

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STAT
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A Handbook
The Canadian Arctic:
EUR 83-10205
August 1983
343
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Intelligence
A Handbook
The Canadian Arctic:
This handbook was prepared by 25X1
of the Office of European Analysis. 25X1
Comments and queries are welcome and may be
directed to the Chief Western Europe Division,
EURA, o 25X1
Confidential
EUR 83-10205
August 1983
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The Canadian Arctic:
A Handbook 25X1
Introduction For more than two decades, Ottawa has pursued an Arctic policy designed
Information available to enhance Canadian sovereignty and promote economic development in
as of 15 June 1983 the region. This policy has been unilateralist and has resulted in some
was used in this report.
international friction, particularly with the United States; we believe,
however, that it will be maintained. The government of Prime Minister
Trudeau has been effective in tapping the sense of "northern identity"
which historically has been a strong ingredient of Canadian nationalism.
This almost universal popular identification with the "North" has permit-
ted the Canadian Government-whether under control of the Liberal or
Progressive Conservative Party-to formulate and implement an Arctic
program without any substantial concern that it might provoke domestic
political or popular opposition.
Because they have never been formally proclaimed or precisely defined,
Ottawa perceives that its Arctic sovereignty claims are open to question-
most importantly, those involving control of water areas. The United
States, in particular, disputes Canada's claim to control navigation in the
Northwest Passage. While we do not expect Ottawa to expand or make a
formal and comprehensive declaration of the extent of its sovereignty
claims in the Arctic, it probably will attempt to develop the means-both
military and nonmilitary-with which to enforce the jurisdictional controls
it has established in the region. For instance, the Canadian Government,
without reducing its commitment to NATO, probably will increase its
emphasis on the protection of its sovereign interests and, to a somewhat
lesser extent, the defense of the North American continent through
NORAD and other bilateral Canada-United States agencies. It is likely to
consider increasing the northern commitment of its armed forces as a step
toward establishing an effective occupancy of the region, improving its
surveillance and control capabilities, and providing greater assistance to
civil authorities.
Ottawa's active interest in more clearly delineating its sovereign claims in
the Arctic region is primarily due to the region's abundance of petroleum,
natural gas, and coal. At the end of 1982, for example, the Canadian
Government said that proven recoverable reserves in the area amounted to
1.1 billion barrels of oil and 24.3 trillion cubic feet of natural gas. These re-
sources primarily are for domestic use, but some of the natural gas to be
produced in the High Arctic islands tentatively has been earmarked for
export to West Germany and France.
iii Confidential
EUR 83-10205
August 1983
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To protect and develop these resources, the National Energy Program
(NEP), a federal energy policy designed to promote and subsidize the
discovery, development, and production of energy resources throughout
Canada, has been in place since the fall of 1980. The guidelines established
by the NEP, together with their exacting application by the Canadian Oil
and Gas Lands Administration (COGLA), have provided for increased
Canadian ownership of and majority participation in the energy develop-
ment projects undertaken by the private sector. Ottawa thereby has gained
control over the pace and scope of development, promoted the growth of
Arctic exploration and transportation technologies to the point where
Canada now leads the United States and the Soviet Union in the field, and
has created the basis for a northern industrial infrastructure.
In our judgment, Ottawa will seek to exercise effective control over
northern development by maintaining a dominant grip over the operations
of the territorial governments and retaining complete ownership of the
region's land and mineral rights. The ability to govern more or less by fiat
in the region is an essential feature of its development plan. We expect
Ottawa to continue reducing the number of federal departments involved
in the north and concentrate authority in those-such as the Department
of Indian Affairs and Northern Development, Energy, Mines and Re-
sources, and the Department of National Defense-that are best able to
implement the economic and energy development plans of the federal
government.
The aspirations and demands of Canada's northern population-nonna-
tives and native peoples-introduce a potentially disrupting influence to
Ottawa's Arctic development plans. Trudeau's government, which has
prided itself on protecting and not assimilating domestic minority groups, is
now confronted by a northern population that is largely opposed to a
central feature of its Arctic policy-the megaproject approach to the
development of the area's energy resources. Ottawa has been attentive to
the northerners' environmental objections and political demands but will be
unwilling to satisfy them entirely. Environmental objections will in all
likelihood receive cyclical treatment as they have in the past: when world
oil prices are low and the supply plentiful, Ottawa will be more willing to
listen to the concerns and suggestions of environmentalists than when
prices are high and the supply only adequate.
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6. Canada: Jurisdictional Claims in the Arctic 32
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Sovereignty
For most of the 20th century, Canada's sovereign
claims in the Arctic were not challenged. The area
was virtually inaccessible and its resources were un-
known, unreachable, or unneeded. As a result, Ottawa
took no action to solidify its claims, even Though there
probably would have been little international opposi-
tion. As the scarcity of world fuel reserves became
increasingly apparent by the late 1960s, and the
existence and location of Arctic resources (figure 1)
became better known, the Canadian Government
clearly grew uneasy over the ambiguous nature of all
of its claims in the Arctic, even though the only
serious threat to Canadian sovereignty was a potential
US challenge over navigational rights in the North-
west Passage. Since 1969, for example, Ottawa has
sought to strengthen its legal position in the Arctic by
making enlarged jurisdictional claims over such areas
as fisheries and pollution control, directly investing in
the exploration for and exploitation of oil and natural
gas resources, increasing the military's role and pres-
ence in the region, and attempting to improve commu-
nication facilities and systems in the north. It has also
sought to formulate Arctic policies with a nationalis-
tic slant to create public interest in and enthusiasm
for the development of the "last frontier."
History
In September 1880 Great Britain transferred its
claims to ownership of the Arctic islands to the
Government of Canada, thereby completing-except
for the addition of Newfoundland in 1949-the geo-
graphical composition of the nation that had begun
with Confederation in 1867 (figure 3). While Ottawa
has never officially said its claims in the Arctic rest on
the sector theory, its actions and pronouncements
suggest that this concept is the basis for its claims of
sovereignty. This theory maintains, in short, that each
state with a continental Arctic coastline automatically
falls heir to all of the island and water areas lying
between that coastline and the North Pole. In the
Canadian Arctic this area is bounded on the west by
the 141st meridian and on the east by the 60th
meridian (figure 6). As early as 1907, the Canadian
Senate indicated that Canada's Arctic land claims
were loosely based on the theory, but the government
has not since invoked it in regard to ice and water
areas in the Arctic Ocean proper.' The Arctic areas
that Canada's armed forces are assigned to protect
appear to be based on the sector theory. In military
orders, both endlines of the sector are mentioned and
are described as extending to the "geographical North
Pole."
A major challenge to Canadian sovereignty iii the
Arctic came with the transit of the Humble-owned oil
tanker S. S. Manhattan through the Northwest Pas-
sage (figure 5) in 1969, without either prior request for
Ottawa's permission or a public recognition of Cana-
dian territorial claims by Washington. Ottawa and,
according to public opinion polls, the Canadian public
feared that the Arctic was on the verge of becoming
North American without ever really having been
Canadian. The United States, together with France
and the USSR, maintained that the Northwest Pas-
sage was an international strait and that any ship
could make an innocent passage through it without
prior notification. Both Canadian media and politi-
cians, however, quickly identified the journey of the
Manhattan as a test of "Canada's resolve to hold on
to its birthright."
In addition to the voyage's challenge of Canada's
sovereignty in the region, Trudeau and parliamentari-
ans representing Canada's three major political par-
ties expressed concern that an international strait in
' Of the six littoral states (figure 4), only the Soviet Union has
consistently based its sovereignty claims in the Arctic on the sector
theory, doing so since 1926. Soviet and Canadian Arctic policies are
similar in several respects: both have claimed 12-mile territorial
seas; both have implemented stringent antipollution measures; both
claim control over navigation in their respective Arctic waterways;
and both take a basically unilateralist approach to formulating and
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Terms and Definitions (6,7,Q)
Baselines. Those lines along a country's coast from
which the width of its territorial sea is measured.
Normal baselines are drawn at the low-water mark
and therefore follow the curvature of the coast.
Straight baselines are employed when a country's
coast is frequently indented or fringed with islands,
as in the case of the west coast of Norway. Straight
baselines are formed by drawing lines to connect the
headlands of coastal indentations or the seaward-
most points of coastal islands.
Closing Lines. Straight baselines drawn across the
mouth of a bay or other coastal indentation. Waters
enclosed by these lines become a state's internal
waters.
High Seas. Those parts of the sea not included in the
Exclusive Economic Zone (EEZ), territorial seas, or
internal waters of a state. On the high seas all states
may exercise freedom of navigation and overflight.
Innocent Passage. The right of foreign vessels to
traverse the territorial waters of another state with-
out capricious interference by the coastal state. Pas-
sage is considered innocent if it does not prejudice the
peace, good order, or security of the coastal state.
Internal Waters. Those parts of the sea lying to the
land side of straight baselines used to determine the
breadth of the territorial seas. In internal waters, the
coastal state exercises the same authority it does on
land.
International Strait. A narrow waterway used for
international navigation between one area of the high
seas or an EEZ and another area of the high seas or
EEZ. According to the Convention on the Law of the
Sea, all ships, submarines, and aircraft have the right
of unimpeded passage through such straits.
Sector Theory. The assertion that each state with a
continental Arctic coastline automatically falls heir
to all of the islands and ice and water areas lying
between that coastline and the North Pole. The area
within the sector is enclosed by longitudinal lines
drawn from the easternmost and westernmost ex-
tremities of the Arctic coastline to the North Pole.
Territorial Waters. Coastal waters of a country ex-
tending up to 12 nautical miles seaward from the
low-water line or the straight baseline drawn where a
coast is deeply indented or fringed with islands. The
country's sovereignty extends to these waters, the
overlying airspace, and underlying seabed and sub-
soil. All foreign ships enjoy the right of innocent
passage through territorial waters.
the Arctic would cut the Canadian Arctic archipelago
in two, greatly increase the risk of pollution, and give
foreign economic interests relatively easy access to the
mineral-rich Canadian Arctic seabed. Canada's De-
partment of External Affairs contended that (a) the
Northwest Passage has never been used as an interna-
tional strait in the past and that it is unreasonable for
the United States or any other power to assume that
Canada will so classify it now, and (b) passage into
Canadian Arctic waters cannot be automatically clas-
sified as innocent because of the danger of navigating
in ice-filled waters.
The controversy over transit rights through the
Northwest Passage was the major issue that focused
Canadian attention on the polar region. In response to
the Manhattan's voyage, Trudeau announced in May
1969 that henceforth, a "core objective" of Canadian
foreign policy would be to implement measures to
protect and strengthen national sovereignty claims
over the waters and islands of the Canadian Arctic
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archipelago. His declaration was one step short of
claiming the sector theory as the basis for Canadian
sovereignty claims in the Arctic-he talked about the
land masses in the sector but not water and ice areas
The Northwest Passage (figure 5) is not a single strait
but rather a series of waterways providing a link
between two parts of the high seas. It can be simply
described as any navigable route through the Canadi-
an Arctic islands, either from east to west or from
west to east. Generally speaking there are four possi-
ble routes; the first route mentioned here is generally
considered to be the least difficult and dangerous:
? Davis Strait to Lancaster Sound to Melville Island
to Prince Wales Strait to the Beaufort Sea.
? The same route as above but exit via M'Clure
Strait to the Beaufort Sea.
? Davis Strait to Lancaster Sound to Barrow Strait
to M'Clintock Channel to Coronation Gulf to
Amundsen Gulf to the Beaufort Sea.
? Hudson Strait to Foxe Basin to the Gulf of Boothia
to Barrow Strait to Melville Sound.
in the Arctic Ocean.
Current Policy
In order to avoid a confrontation with the United
States, Trudeau's government began in the early
1970s to construct a northern policy designed to
extend Canadian sovereignty through the use of pollu-
tion, environmental, and other jurisdictional controls
rather than a formal declaration of sovereignty. Un-
derlying this approach was Ottawa's assumption that
the United States could not in the long run successful-
ly press for policies that ran counter to the security,
economic, and environmental interests of the coastal
states.
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jurisdiction in Arctic waters also is likely, the longer it
is in place, to have the effect of "creeping" interna-
tional acceptance.2
Ottawa's first sovereignty-enhancing measure in the
Arctic was a cabinet decision in 1970 extending all
Canadian territorial waters from 3 to 12 nautical
miles. The practical effect was to bring the Barrow
Strait at the "eastern gateway" to the Northwest
Passage under Canadian jurisdiction. When this area
of control was coupled with a similarly controlled
"western gateway" through the Prince of Wales
Strait, which had existed under the former 3-mile
limit, Canada could exert some measure of control
over navigation in its Arctic archipelago (figure 5).
In addition to the evolving international consensus
supporting the establishment of territorial seas of up
to 12 nautical miles in breadth, Canada also had an
argument for the international recognition of its
claims for control over the gateway areas because
both "gateways" are less than 24 miles wide at their
narrowest points and therefore were overlapped by
Canada's 12-nautical mile territorial sea claim. The
significance of the extension to 12 nautical miles was,
from Ottawa's viewpoint, its elimination of any fur-
ther possibility that the Northwest Passage would be
considered a continuous strip of high seas, since
navigation of the Barrow Strait between Lowther and
Young Islands necessarily involves transit through
Canadian territorial waters. The United States quick-
ly announced its refusal to recognize the Canadian
' Other such "creeping" efforts to extend national jurisdiction in the
Arctic occurred in January and March 1977 when Ottawa created,
respectively, a 200-mile Exclusive Economic Zone (EEZ) off all
Canadian coastlines and a 200-mile exclusive fishery zone in the
Arctic EEZ. The establishment of the EEZ (see figure 6 for borders
of Canada's Arctic EEZ) in Arctic waters introduces another
complicating factor to Ottawa's sovereignty claims in the region. A
line delimiting the EEZ in the Arctic will follow the contour of the
Canadian Archipelago in linking the offshore boundaries to the east
and to the west. The question arising from such a delineating
exercise is what happens to the status of those seas that lie within
the area defined by the Canadian "sector" but are beyond the EEZ.
The effect of drawing the EEZ boundary will be to create a
justifiable but wobbly line demarcating an irregular area notably
smaller than that of the sector claim. To insist upon the validity of
the EEZ claim would be tantamount to accepting a permanent
deviation from the sector principle. So far Ottawa has not been
forced to choose between the two claims, and the creation of the
EEZ now stands simply as another qxtension of Canadian jurisdic-
extension to 12 nautical miles, treating it as merely a
new chapter in the old story of gradual encroachments
by coastal states on the freedom of the high seas.
Act.
Ottawa next amended-also in 1970-its Territorial
Seas and Fishing Zones Act to draw closing lines at
the entrances of major bodies of water for fishery
conservation and antipollution purposes. The Act
drew those lines across the entrances to five major
bodies of water and thereby placed 80,000 square
miles of coastal waters within Canadian internal
waters jurisdiction. This legislation was followed by
the Canadian Shipping Act of 1970 which placed
strict antipollution standards on ships operating in the
waters enclosed by the amendments to the Fisheries
The most important piece of legislation in this series,
according to one of Trudeau's key foreign policy
advisers, was the Arctic Waters Pollution Prevention
Act (AWPPA) which was passed in April 1970 and
promulgated in August 1972-the delay in implemen-
tation was due to a controversy over establishing
financial liability limits under the Act. The AWPPA
spelled out ship construction requirements, particular-
ly hull thicknesses and fuel and storage tank design,
permissible zones for navigation, and a prohibition
against dumping waste in Canada's Arctic waters.
The Act provided that any person having an accident,
either on land or sea, within the zone covered by the
Act (figure 6) was financially responsible for damages
caused and for cleanup operations. In addition, indi-
viduals and ships found in violation of the construc-
tion or navigational safety standards or antipollution
provisions of the Act could be fined. Canadian officers
charged with enforcing the Act were given broad
powers, including the authority to seize a ship and its
cargo if they had reasonable grounds to suspect that
the Act had been contravened. The AWPPA, which is
important to Canadian claims of sovereignty in the
Arctic, is also gradually becoming internationally
recognized by governments and legal scholars as a
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realistic and appropriate response to a unique problem
that could easily and rapidly degenerate into an
ecological disaster.'
' The Law of the Sea Treaty recognizes, among other things, the
right of coastal states to control both renewable and nonrenewable
offshore resources, to take measures to prevent marine pollution, to
establish territorial seas up to 12 miles in breadth, and to create
200-mile Exclusive Economic Zones and extend jurisdiction in the
zone for such functional needs as the protection of fisheries, the
environment, and seabed resources. In addition, the Treaty contains
a special provision for the expanded rights of coastal states to
protect the marine environment in ice-covered waters. The Treaty's
provisions have, in sum, the potential of giving international legal
sanction to those sovereignty-enhancing measures adopted by the
Trudeau government for the Arctic since 1970. Canada's success in
the law of the sea negotiations provides an unusual instance in
which a nation used a multilateral forum to legitimize a unilateral
initiative that would have been unenforceable at the bilateral level.
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Canada's Arctic region basically is a fiefdom of the
federal government. For administrative purposes Ot-
tawa has divided the region into two areas, the Yukon
and the Northwest Territories (figure 3). The two
units have territorial governments which attend to
such matters as education, public works, and social
development. Their limited powers, however, exist at
Ottawa's pleasure. In addition, the Crown owns all
the land and mineral rights north of 60 degrees north
latitude. Because of this Ottawa does not find itself
involved with the fractious conflicts that have long
characterized federal-provincial politics in non-Arctic
Canada. It seems unlikely, therefore, that Ottawa will
be in any hurry to raise its Arctic territories to
provincial status.
Eleven federal departments are now involved in the
administration of the region.4 This has resulted in
some fragmenting of authority and overlapping of
responsibilities, limiting Ottawa's ability to develop a
comprehensive Arctic policy. The surveillance and
protection of the Canadian Arctic, for example, are
divided among four administrative entities-patrol
aircraft are controlled by the DND, icebreaking
activities are the responsibility of the CCG, fisheries
protection is provided by the DOE, and the RCMP
Marine Service has responsibility for enforcing mari-
time regulations. Ottawa currently is engaged in
reducing the number of departments involved in
Arctic administration. It is seeking to concentrate
northern responsibilities in DIAND, EM&R, and, to
a lesser extent, DND.
DIAND, by statute the dominant federal agency in
the Canadian Arctic, is responsible for coordinating
the orderly political and economic development of the
These include the departments of Indian Affairs and Northern
Development (DIAND), External Affairs (DEA), Environment
(DOE), National Defense (DND), Energy, Mines, and Resources
(EM&R), Science and Technology (DS&T), Industry, Trade, and
Commerce (ITC), Transport (DOT), the Canadian Broadcasting
Company (CBC), the National Research Council (NRC), and the
Office of the Solicitor General (SG). The last two mentioned
departments respectively control the Canadian Coast Guard (CCG)
Yukon and Northwest Territories. DIAND is the
central repository of constitutional power, and is, in
essence, a province-like authority that functions as a
"Colonial Office" in administering and developing
Ottawa's northern empire. It makes all decisions
affecting land use, conservation, and industrial devel-
opment. The nature of DIAND's mandate involves a
conflict of interest, even within the Department., in
that the requirements of northern economic and re-
source development are often in direct conflict with
the needs and desires of the north's nonnative a;nd
native peoples.
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The Role of the Military
In April 1969 Prime Minister Trudeau defined the
"surveillance of our territory and coastline, that is to
say, protection of our sovereignty" as a primary
mission of the Canadian Armed Forces (CF). Since
Trudeau's pronouncement, the CF have increasingly
emphasized this role, which includes assisting in the
protection of territorial integrity, fisheries, the envi-
ronment, and ocean resources. In pursuing this priori-
ty, the CF's operations in the Arctic, which are
directed from a headquarters at Yellowknife, North-
west Territories, and principally carried out from a
forward operations base at Frobisher Bay (figure 4),
have been directed primarily toward such "constabu-
lary" functions as reconnaissance, detection, intercep-
tion, search and rescue, and aiding the civilian au-
thorities in law enforcement, engineering,
transportation, and communications.'
Ottawa's emphasis on the protection and enhance-
ment of its Arctic sovereignty has caused both the
government and the military to put increased public
stress on the CF's ability to operate efficiently in the
north. Ironically, the low levels of defense spending
that have characterized the Trudeau era have,
effectively
prevented the development of CF's northern capabili-
ties to enforce the many-layered web of jurisdictional
controls that Ottawa has fashioned for the Canadian
Arctic. The surface warships of the CF's Maritime
Command, for example, lack the capability to operate
in Arctic Ocean waters except for brief periods during
At the present time, Canada's Department of Nation-
al Defense has determined, according to the Canadian
' The CF's limited ability to deploy quickly and effectively in the
north led to its construction of the Dempster Highway, the first all-
weather road from Dawson City in the Yukon to Fort McPherson
and Inuvik in the Northwest Territories. The highway will also
allow better commercial access to the region. The Dempster
Highway project is an example of the CF acting as an "aid to the
civil power."
Defense Quarterly, that some of the measures neces-
sary to make the CF a viable force in the Arctic and
other frontier areas include:
? Reorganization and integration within the I)ND of
the three other marine services-those of Depart-
ment of the Environment (DOE), Department of
Transport (DOT), and Royal Canadian Mounted
Police (RCMP)-responsible for maritime surveil-
lance and control. (This DND initiative is not
universally favored within the government. The use
of military forces to remove intruders from waters
that Canada claims is thought by the nonmilitary
departments involved in the administration of north-
ern affairs to be an unnecessarily provocative poli-
cy-particularly if the offenders are individuals or
corporations who are citizens of one of Canada's
allies. Retaining a nonmilitary force for constabu-
lary functions would, on the other hand, avoid
giving a military connotation to simple policing
operations.) (p', Er
? Increased use of long-range surveillance aircraft
and the construction of permanent forward airbases
at such locations as Resolute and Inuvik in the
Northwest Territories. Additional High Arctic
bases would reduce deployment times for the CF in
either civil or military emergencies.
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? A significant increase in the level of CF manpower
involved continuously in Arctic operations from thecurrent total of 54 servicemen and 17 civilians. 6,?.
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? Increased training activities such as NORPLOY-
the CF's annual northern deployment-to improve
Arctic proficiency and establish a CF presence in
the north, and to support defense, research. and
development activities in the Arctic. 6,~:
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program.
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A recent joint report by four of Canada's leading
strategic studies centers has suggested that all Cana-
dian aircraft be withdrawn from Europe and be
employed instead in the air defense of North Ameri-
ca. In addition, the report recommends that Ottawa
acquire three squadrons of aircraft for use in Arctic
and coastal surveillance. These measures would re-
duce Canadian reliance upon US airpower and in-
crease Ottawa's ability to protect its sovereignty
claims in the Arctic and other frontier and offshore
areas. As an additional priority military mission,
Ottawa has placed increasing emphasis on the execu-
tion of sovereignty-related activities such as enforcing
offshore fishing and antipollution regulations and
patrolling the 200-mile Exclusive Economic Zone
(figure 6).
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The Arctic region has an uncommonly fragile physi-
cal environment. The ecological system that has
evolved in the Arctic must cope with the harshest of
climatic conditions; the result is a very limited diversi-
ty in plant and animal life and concentrations of
biological activity in a few areas. Some environmental
scientists fear that the extinction of a single Arctic
species could break the natural food chain on which
all animal life in the region depends. In addition, the
chemical deficiencies of the region lead to exception-
ally slow growth processes and therefore retard
rehabilitation after environmental damage. While
economic and resource development and strategic
considerations in the Arctic promise to promote in-
tense competition along traditional national lines,
international cooperation in protecting the environ-
ment is more important in the Arctic than elsewhere.
Since the early 1960s, the six littoral governments
have been attempting to rectify what was an
acute shortage of reliable information on the Arctic
environment. Until the mid-1970s, in fact, Arctic
environmental programs were geared more toward the
acquisition of information than the elimination of
threats to the environment. Arctic specialists have
concluded that a list of the leading environmental
dangers should include but not be limited to the
following:
? Icebreaking-tanker routes that could disrupt the
habitats and migratory patterns of seals and other
marine mammals.
? Tanker routes that might interfere with the winter
passages and the hunting and fishing grounds of the
Arctic's Inuit and other native peoples.
? Increased air and maritime activity, both naval and
commercial, in the Arctic Ocean area, which may
significantly raise the level of noise pollution in the
region.
? Pollution from either the foundering of an oil-filled
tanker or the blowout of an oil well.
The possibility of a major spill is now regarded by
Canadian and other scientists and environmentalists
as the most potentially disastrous form of pollution in
the Arctic. According to these specialists, the region's
intense and nearly year-round cold acts to prevent the
dispersal and degradation of hydrocarbon spills. As a
result, spills would remain more toxic over longer
periods than would be the case in more temperate
climates. In addition, the Arctic ice cover could
conceivably hide a spill and thereby delay detecl~ion
and cleanup efforts.
Among the most serious dangers posed by a spill
would be the possibility of damaging the delicate
albedo-the ability of the region's ice cover to reflect
sunlight. Once covered with oil the ice cover would
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consequences for weather conditions, temperatures,
and water levels in other parts of the world. In
addition, oil spills would threaten many species of
Arctic marine mammals and migratory birds.
Ottawa's Arctic Waters Pollution Prevention Act was
not only an important sovereignty-enhancing measure
but was also aimed at preventing oilspills. The
AWPPA spelled out safety and zoning regulations
(figure 6), but it did not define a comprehensive and
enforceable federal environmental policy. The federal
Department of the Environment, for example, has
little control over the pace or content of northern
development aside from a statutory responsibility for
the protection of fish stocks and migratory birds in
Arctic areas. The DOE often is not even aware of the
activities of the many other departments with north-
ern responsibilities. The DOE attempts to keep
abreast of what other departments are doing by
perusing the activity plans and expenditure estimates
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provided to the Treasury Board by all federal depart-
ments. For the most part, however, the DOE can only
react to events in the Arctic and provide support-
when it is requested-to DIAND, EM&R, and other
departments possessing greater statutory and regula-
tory powers.
A bureaucratic battle is developing now between
DOE and DIAND over protecting the Arctic environ-
ment. The DOE argues that the northern development
portion of DIAND's mandate is currently controlling
the department's policies and operations and that
environmental interests in the Arctic are, as a result,
being inadequately protected. The DOE favors a
comprehensive federal environmental protection poli-
cy on northern development, including a uniform and
mandatory environmental impact assessment process
to be conducted under its auspices, but DIAND,
however, has blocked most efforts aimed at such an
overall policy.
Throughout its existence DIAND has worked closely
with private industry in formulating and executing
economic and resource development plans in the
north. Having spearheaded Arctic development, pri-
vate industry and DIAND have been the foremost
gatherers of environmental information and together
they control access to it. Ottawa has delegated to
DIAND the responsibility for determining the suffi-
ciency of the environmental information which has
been jointly accumulated. The continuing primacy of
DIAND among the departments of the federal bu-
reaucracy that deal with the Canadian Arctic seems
to assure that, at least for the moment, the interests of
industry and the national need Ottawa perceives for
accelerated northern economic development will con-
tinue to prevail over the objections of the environmen-
talists.
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Arctic Peoples
The permanent residents of the Canadian Arctic fall
into two categories: nonnatives, mostly those people
who have emigrated to the north from elsewhere in
Canada; and the members of the various groups of
native peoples, including the Inuit, the Metis, and the
Dene. The Inuit is the largest and most politically
influential of these groups, numbering in the vicinity
of 23,000 and living in the Yukon, the Northwest
Territories, northern Quebec, and Labrador. These
two groups of northerners are divided on the question
of which direction northern development should take,
and, in addition, they are both at odds with the
dominant northern development philosophy of the
federal government. The concerns and desires of the
northern population have become an influential factor
in the formulation of Ottawa's Arctic policies. F_
Nonnative Peoples
The basic demand of the nonnative inhabitants-who
number 40,000 of the Canadian Arctic's total popula-
tion of 68,000 and reside primarily in the region's six
urban centers (figure 3y-of the Yukon and North-
west Territories is for provincial status. They have
accused the federal government of treating them as a
"colonial neonle."
one of the nonnatives' major com-
plaints is that their territorial governments are unable
to coordinate plans and programs with DIAND's
Ottawa-based meetings and working groups because
of excessive travel times and costs. They contend that
this inevitably limits their knowledge of federal plans
for the north. The chief desire of nonnative northern-
will lead to the territories becoming provinces.
1"Rol (, OF &
The conditions that the Canadian Government has set
down as prerequisites to provincial status suggest that
such status will not soon be forthcoming. Ottawa
insists that each territory must have a sufficient tax
base to support itself; agreement must be reached on
the number of political units to be formed and the
precise definition of their respective boundary lines;
native peoples must be fully involved in the local.
political process; and the majority of each territory's
population must want provincial status.)
Native Peoples
The northern native peoples present Ottawa with
what at times must seem an almost insurmountable
obstacle to the development plans it deems as serving
the "national interest." While nonnative northerners
are basically part of the traditional Canadian political
system, which combines participatory democracy with
an abiding concern for the protection of individual
rights, the north's native peoples are interested more
~{rn protecting their own "nations" than in becoming a
more viable part of the Canadian polity. The native
population tends to cluster in scattered, remote vil-
lages along the shores of bays, inlets, and the mouths
of rivers. These locations reflect the natives' tradition-
al lifestyle of fishing and marine-based hunting. The
intransigence of native demands puts the Canadian
Government in an uncomfortable position in that it
has always prided itself-especially under Trudeau-
on not seeking to assimilate minority groups. Ottawa
has actively solicited and subsequently publicized the
positions of the native peoples toward northern devel-
opment and has said its primary aim in the north is to
meet the "needs and aspirations of the native peo-
ples."
Land claims are at the core of the demands of the
northern native peoples, and we consider a resolution
of these claims a prerequisite for any settlement
between Ottawa and them. The native peoples base
their claims on what are termed aboriginal rights,
that is, land rights that native people retain in perpe-
tuity as a result of their original occupancy and
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traditional use of the land.' Ottawa does not reject
this view out of hand, but prefers to satisfy native land
claims on the basis of what it describes as social
justice-fulfillment of a portion of the natives' de-
mands but tempering and thereby reducing such
awards by including a calculation of the benefits that
will accrue to the native peoples as a result of federal
development expenditures in the region.
In addition to causing a confrontation with Ottawa,
the demands of the native peoples put them at odds
with nonnative northerners. The native peoples have
made it clear, for example, that they will not support
efforts to attain provincial status for the territories
until their land claims are satisfactorily settled and
they are guaranteed a certain percentage of represen-
tation in any future territorial or provincial legislature
regardless of their percentage of the population. Nei-
ther of these demands is likely to be met in the near
future, however. And, without the support of the
native peoples, the promoters of provincial status for
the Yukon and Northwest Territories will be unable
to gain the endorsement of a majority of the nooula-
tion-one of Ottawa's essential conditions.
The growing tendency of Canadian native groups to
define themselves and their needs in transnational
terms is making Ottawa's predicament worse. Since
1977, for example, the Inuit of Canada, Alaska, and
Greenland have established contacts through an orga-
nization known as the Inuit Circumpolar Conference.
The conference emphasizes Inuit claims for free and
unrestricted travel and trade across the whole of the
North American Arctic. The Inuit claim that national
boundaries have no place in their culture and society
and that borders therefore threaten Inuit survival.7 In
6 While the native peoples publicly hold to the doctrine of aboriginal
rights, they are not beyond attempting to bargain away their so-
called birthright if the price is right. The Inuit of the Mackenzie
Delta region, for example, are currently demanding outright owner-
ship of 700 square miles, surface rights ownership-hunting,
fishing, and trapping rights-on an additional 32,000 square miles,
and a $36 million cash award in 1978 dollars. In return the Inuit
are willing to abandon any further claim to a'yards under the
' The boundary matter is another complicating paradox in native
demands. While the Canadian Inuit join with those of other
countries in protesting international boundaries, they have, at the
same time, concluded an agreement "in principle" with Ottawa to
divide the Northwest Territories at the tree line with the resulting
northern section becoming the territory of an Inuit "nation" to be
addition, spokesmen of the Dene group of the western
Arctic area have, since 1975, argued in a number of
international forums that it may become necessary for
them to press for national self-determination and
ultimately an independent nation. The Dene have
recently moderated their demands somewhat, accord-
ing to US consular officials, and now appear ready to
attempt to remain within the Canadian national
framework. Their current demands, however, which
amount to seeking a "special status" within confeder-
ation, are still well beyond what Ottawa is wialing to
accept. We believe the Dene appear to be attempting
to establish for themselves the same sort of unique
position in the confederation that Quebec has consist-
ently sought. Ottawa obviously has little desire to
create another Quebec-like, separatist-oriented entity.
9
mil) 6?jf
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Energy Policy
The Canadian Arctic region is gradually becoming
the focus for Ottawa's hope of attaining energy self-
sufficiency by 1990. The Geographical Survey of
Canada has estimated that the Arctic's two main oil
and natural gas basins-the Mackenzie Delta/Beau-
fort Sea area and the High Arctic islands-may
contain between them approximately 13 billion bar-
rels of oil and 200 trillion cubic feet of natural gas.
Spokesmen for Dome Canada, Ltd, have estimated
that Beaufort Sea oil will be in production by 1989. In
addition, the Survey estimates that the region con-
tains coal reserves totaling nearly 130 billion tons.
Assuming that the reserve estimates are accurate and
that the supplies are 100 percent recoverable, they
would represent for Canada (at 1981 rates of con-
sumption) domestic supplies of the following duration:
petroleum, 22 years; natural gas, 108 years; and coal,
3,400 years.
The development of these areas would also promote
the growth of the Canadian economy. Officials of the
Department of Energy, Mines, and Resources have
estimated that full-scale development in the Beaufort
Sea could result in a total project investment of $81
billion, 75 to 90 percent of which would be spent in
Canada. We believe declining reserves in Alberta's
aging oilfields and the decision of private industry to
decrease their participation in the proposed govern-
ment-industry development of the Alsands and Cold
Lake tar sands projects in Alberta-which were to
have added more than 250,000 barrels per day to
Canadian domestic oil supplies by the late 1980s-
will also add impetus to Ottawa's drive to produce oil
and natural gas in the Arctic at the earliest possible
date. In the Arctic, the profit motive of private
industry has dovetailed nicely with Ottawa's decision
With the introduction in 1980 of the National Energy
Program (NEP)-a plan designed to free Canadian
energy resource development from US domination,
promote energy self-sufficiency, increase federal reve-
nues, and tip the balance of power in the federal-
provincial energy relationship in Ottawa's favor-
Ottawa established guidelines ensuring that Arctic
energy resources will be developed and controlled by
Canadians. The NEP assumes that it is in the interest
of all Canadians to know the extent of hydrocarbon
resources, in the Arctic and that the government
should make every effort to promote exploration and
development. The NEP divided the Arctic into three
developmental regions: between 60 degrees north lati-
tude and 65 degrees north latitude, between 65
degrees north latitude and 70 degrees north latitude,
and beyond 70 degrees north latitude or the offshore,
whichever comes first. Development leases run longer,
and the amount of exploration required to retain them
decreases, the further north they are.
NEP regulations permit only Canadian citizens or
those corporations with at least 50-percent Canadian
ownership to obtain oil and natural gas production
licenses in the Arctic. Exploration agreements con-
cluded before 1980 must be renegotiated in order to
accommodate the NEP's requirements for developer
commitments to a binding exploratory schedule. Once
granted, these leases cannot be transferred or assigned
to anyone who would not qualify under Canadian
participation requirements. In addition, Arctic devel-
opers must also offer Canadian investors the opportu-
nity to participate in the financing and ownership of
northern operations.
Another effort by Ottawa to encourage energy explo-
ration in frontier areas is a provision of the NEP
known as the Petroleum Incentive Program (PIP). The
government awards PIP grants to cover a portion of
both exploration-related expenditures and the costs of
continuing operations. These grants increase as the
percentage of Canadian participation in the explora-
tion effort increases. For example, Ottawa returns to
companies with 75-percent Canadian participation 80
cents of every dollar spent on exploration or continu-
ing operating expenses. Of the big three private Arctic
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developers-Gulf Oil, Imperial, and Dome Canada-
Dome receives the highest rate of federal support.
Even a foreign-controlled corporation like Gulf Re-
sources, however, can expect to receive PIP grants
amounting to 35 cents on each dollar it expends on
exploration activities and continuing operating costs.
The PIP program is extremely important in promot-
ing frontier energy exploration work because the costs
for exploration, development, and production in the
Arctic in 1983 are estimated to be triple the costs
incurred in conventional onshore drilling elsewhere in
Canada.' It also has the advantage of maintaining
expensive exploration activities at times when a world
oil glut or the stagnation or decline of world oil prices
would normally curtail or even terminate such specu-
lative enterprises.
Private-sector explora-
tion expenditures increased by 50 percent in 1982-a
year of declining oil prices-in response to the grants
offered under the NEP.
8 Average capital and operating costs, exclusive of costs incurred
through exploration activities, for a large Beaufort Sea oil develop-
ment, for example, would total $8 to $12 per barrel. This is
comparable to the $10 to $12 per barrel average capital and
operating costs that the British Department of Energy estimates for
North Sea oil production. Transporting Beaufort Sea crude to
southern Canada and the United States is expected to add $4 to
$12 more per barrel. Pipeline transport would be more expensive
than the alternate tanker delivery system. In January, Business
Week estimated that Arctic crude would be competitive with OPEC
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Energy Development
Energy exploration and development in Canada's
Arctic region is being carried out by both the federal
government and private industry. Petro-Canada, the
state-owned oil company, leads government efforts in
the area, while Dome, Imperial, and Gulf Canada,
Ltd, are the major private companies involved in
development.
Federal Development Agencies and Projects
Canadian Oil and Gas Lands Administration. The
Canadian Oil and Gas Lands Administration
(COGLA), created in March 1982, is, according to
the Montreal Gazette for 19 September 1982, proba-
bly the most effective instrument of "Canadianiza-
tion" now involved in Arctic energy development.
Operating under the aegis of the NEP, COGLA
approves exploration plans, national company content,
and farm-out and farm-in rules' for all frontier
activities on the "Canada Lands" (see figure 3). The
Canada Lands are almost equivalent to a "super-
province" encompassing the continental shelf of the
Atlantic, Pacific, and Arctic coastlines, Hudson Bay
(an area larger than eight of the 10 provinces), plus all
the lands of the Northwest and Yukon Territories. In
the Arctic, the Canada Lands include all the territory
from the North Pole to the southern tip of James Bay
and from the Alaskan border east through the Yukon
and Northwest Territories and the myriad Arctic
islands.
COGLA rules require the leasees eventually to return
50 percent of their holdings to the Crown, although
each private developer will have the right to retain all
significant discoveries and those promising locations it
selects for additional exploration. The 50 percent
returned to Ottawa will almost certainly be those
lands proved to have no productive potential, and their
return thus will allow the leasee to end rental pay-
ments on unpromising tracts.
The processes of "farming-in" and "farming-out" involve an
arrangement whereby a portion of an original leaseholder's obliga-
tory drilling program is taken over by a second company. In this
situation, the original leaseholder is farming out, and the second
COGLA was formed by giving it jurisdiction over
DIAND's Northern Nonrenewable Resource Branch
and EM&R's Key Resource Branch. COGLA's direc-
tor, however, reports to the ministers of those two
departments. This procedure limits the ability of other
departments that work on the environmental problems
and land claims in the Arctic to influence the direc-
tion of northern energy development. As a result, we
expect that COGLA's decisions will strengthen the
developmental emphasis of Ottawa's Arctic policy.
COGLA was organized after studies were made of
similar agencies employed by Great Britain and Nor-
way to maximize national industrial and commercial
benefits from North Sea development. The British
and Norwegian organizations increased their respec-
tive national involvement in North Sea activities from
25 percent to 79 percent and 17 percent to 60 percent
in less than a decade. COGLA requires that all firms
submit "Canada benefit plans" so as to ensure their
fulfillment of domestic procurement requirements. As
a result, local firms have an advantage in gaining
access to the industrial and commercial opportunities
arising from exploration activities. In our opinion,
COGLA will help to keep "spinoff" benefits in Cana-
da, promote bureaucratic efficiency, and give the
federal government the "concentrated clout" that the
scope of northern energy development work demands.
National Research Council. Canada's National Re-
search Council (NRC) is extensively involved in activ-
ities to assist in the development of Arctic energy
resources, particularly the development of liquefied
natural gas (LNG) tanker technology, the design of
icebreakers, and the formulation of Arctic pollution
prevention regulations and standards. The NRC's
concentration on marine transportation reflects Otta-
wa's judgment that the thrust of such transportation
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in the Arctic has shifted from the resupply of local
communities to the establishment of an infrastructure
to support economic development in the region.
6, ,
Construction began in May 1981 on the NRC's
Arctic Vessel and Marine Research Institute in New-
foundland, where such Arctic problems as the effects
of the movement of the Beaufort Sea icepack on oil
drilling rigs will be studied. In addition, the NRC is
currently cooperating with the US National Aeronau-
tics and Space Administration in the use of two US
satellites to track 20 transmitters Canadian authori-
ties have placed in the Arctic to measure the thickness
of the icepack by recording surface temperatures.
Ottawa also plans to spend $300 million by 1990 for a
pair of satellites equipped with microwave radar to
help ships through Arctic ice floes. The NRC's
activities are part of Ottawa's attempt to give Canada
an advantage in Arctic technologies such as marine
transportation engineering, oil and natural gas pro-
duction methods, and the design of LNG tankers.
Petro-Canada. The driving wedge of Ottawa's energy
development efforts in the Arctic, according to
COGLA's Annual Report for 1982, has been Petro-
Canada (Petrocan), the state-owned oil company
formed in 1975. Part of Petrocan's original mandate
was to direct public funds toward high-risk frontier
areas which were largely unattractive to private inves-
tors. Petrocan today controls 26.8 million acres in the
Beaufort Sea and the Northwest Territories and 25
million acres in the High Arctic islands. The latter
holding was largely acquired through a direct pur-
chase from Atlantic Richfield Company in 1976. In
addition, NEP provisions allow Petrocan a 25-percent
back-in right on all leased-out federal lands-a provi-
sion which, while annoying to multinational corpora-
tions, is much less detrimental to their interests than
the 50 percent taken by Norway's Statoil.'? The
10 The back-in provision of the NEP reserves to the Crown a 25-
percent interest in every lease awarded on the Canada lands. The
back-in interest is held by Petro-Canada and is applicable to all
leases, whether let before or since the introduction of the NEP.
Because of its retroactive nature, the NEP's back-in has generated
a greater degree of political controversy than has the program of
Statoil, which has been on the scene since the beginning of
Norwegian oil development in the North Sea.
strong hand dealt to Petrocan by the federal govern-
ment gives Ottawa an effective instrument with which
to deflect the political power and influence of multi-
national corporations.
Panarctic Oil, Ltd. Panarctic, which is controlled by
Petro-Canada, has concentrated its activities amid a
cluster of Arctic islands about 600 miles northwest of
the continental Arctic coastline. The company's major
natural gas discovery occurred in 1969 at Drake Point
in the northeast section of Melville Island." Estimated
reserves at Drake Point amount to 5.3 trillion cubic
feet (tcf) of natural gas-the Oil and Gas Journal has
estimated that the Canadian High Arctic area as a
whole contains 18 tcf of natural gas, an amount well
beyond the threshold required for production. Busi-
ness Week has pegged this figure as representing
nearly 20 percent of Canada's total natural gas
reserves. Panarctic plans to construct a $2.3 billion
(LNG) plant on barges at Drake Point to tap and
liquify the gas. The gas would then be transported 160
kilometers through a buried pipeline to be built from
Drake Point to Bridport Inlet-probably the best
natural port in the Canadian Arctic-on the southern
coast of Melville Island. At Bridport the gas would be
processed and loaded on specially designed icebreak-
ing LNG tankers and shipped eastward through
Lancaster Sound and the Davis Strait to a destination
on the St. Lawrence River in Quebec or to the
Melford Point Terminal near Canso on the east coast
of Nova Scotia (figure 3). Panarctic's current produc-
tion target is to ship 306 million cubic feet per day
(mcf/d) from Melville Island by 1988.
Although the natural gas produced in the Canadian
Arctic was originally intended for domestic and US
markets, Ottawa's projected Arctic production facili-
ties ultimately may secure a share of the West
European natural gas market. In late 1982, a four-
company Canadian-West German consortium an-
nounced plans to build a gas liquefaction plant on
" According to the July 1982 Oil and Gas Journal, the Panarctic-
headed consortium made three significant oil discoveries in the
High Arctic islands in the summer of 1982. Estimated reserves in
these three finds total 750 million barrels, but oil production in the
High Arctic islands is not expected to begin before the year 2000.
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Ellef Ringnes Island by 1988 (figure 5), similar to the
one planned at Drake Point. The consortium intends
to tap natural gas reserves in the area around King
Christian Island and eventually ship 500 mcf/d to
West Germany. The estimated cost of the project is
$4 billion, and the consortium is two-thirds Canadian
owned-one-third each held by Petrocan and Trans-
Canada Pipelines, Ltd-and one-third controlled by
the West German companies Ruhrgas AG and Gel-
senberg AG. Petrocan is also discussing the possibility
of conducting a similar undertaking with the French
firm Gaz de France. 6, :~, O
Arctic Pilot Project. The main Canadian Govern-
ment-sponsored energy development project in the
Arctic, according to a report of the Canadian Senate
issued in March 1983, is the Arctic Pilot Project
(APP)-Panarctic's proposed natural gas facility on
Melville Island. The APP is an all-Canadian opera-
tion. The four partners in the venture are Petrocan,
Nova Corporation of Alberta, Dome Petroleum, and
Melville Shipping, with respective ownership shares of
37.5 percent, 25 percent, 20 percent, and 17.5 percent.
The APP is designed to produce commercially profit-
able natural gas in the area of the High Arctic
islands, and it is currently spending about $1 million
per month to that end. The APP also is designed to
ensure that Canadians attain maximum participation
in the project-current estimates are that during the
construction phase 74 percent of the capital involved
will be Canadian and, during the operational phase,
94 percent. Ottawa maintains that the APP will
benefit Canada in the following ways:
? Critically important Arctic transportation technol-
ogy will be developed particularly in regard to
tankers with icebreaking capabilities, which will
make Canada the world leader in the field.
? Private industry will become accustomed to partici-
pating in Arctic development.
? Significant additions will be made to the fund of
environmental knowledge about the Arctic.
? Safe, economic access to Arctic energy will be
provided through the development of a fleet of
Arctic tankers and safe navigational routes.
? The project will establish an infrastructure for
future projects.
? The year-round presence of a commercial enterprise
in the western Arctic will amount to effective
occupancy of the immediate area and will therefore
underscore the validity of Canadian sovereignty
claims in the Arctic archipelago.'
to 53 percent.
The major oil companies shunned the High Arctic
islands until the late 1960s when they began to
purchase leases both in that area and in the Macken-
zie Delta/Beaufort Sea region. The administrators of
DIAND were concerned that, since the oil companies
were obviously intent upon developing the latter re-
gion first, the Arctic island leases were being acquired
as a hedge against the future and not as a first step to-
ward immediate development. In order to forestall an
industry-inspired freeze on High Arctic development,
DIAND bought a 45-percent interest in Panarctic Oil
in 1966. Petrocan has since increased Ottawa's share
Private-Sector Enterprises
Dome Canada, Ltd. In the private sector, Dome, Gulf
Canada, Ltd, and Imperial Oil, Ltd are the leading oil
and natural gas developers in the Canadian Arctic.
Dome has been the aggressive and innovative leader
in the region since drilling its first Arctic oil well in
the winter of 1961/62. Since the NEP was promul-
gated in 1980, Dome has been Ottawa's primary
instrument of Canadianization in the private sector,
particularly in the Beaufort Sea area. The company
was already on the scene in the Arctic, and it moved
quickly to secure the requisite level of Canadian
ownership. Dome's leased acreage is mostly in deep-
water areas of the Beaufort Sea, and the company
12 The Arctic Pilot Project is opposed by a number of international
environmental groups and native groups, the latter because of
pending land claims in the APP region and the former because of
fear of potential noise and oil pollution by tankers along Green-
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This unique platform, created by modifying the hull of a supertanker, was used by
Dome successfully to drill this past winter in the Beaufort Sea. Dome's drilling
platform is a submersible barge designed to sit upon an underwater gravel island at a
depth of about 70 feet. Although Arctic drilling platforms are expensive to
construct-in the vicinity of $57 million each-they need only be built once, whereas
gravel islands need to be rebuilt nearly every year and the cost of a 60 foot gravel is-
land ranges between $60 million and $120 million. In addition, the oil companies are
attracted to the caissons because the cost of leasing can be included as a continuing
operating expense and is therefore eligible for coverage by PIP grants.
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maintains a fleet of four drill ships, eight icebreaking
supply ships, one class-four icebreaker, and three
oceangoing barges. The company is now spending an
estimated $800,000 per day to support its Beaufort
activities and tentatively plans to build a deepwater
port at Kings Point on the Yukon's northern coast.
In many ways Dome has used the Beaufort Sea as a
vast laboratory for developing technology to exploit
Arctic energy resources. Dome has, in particular,
specialized in marine engineering and claims some
notable successes:
? Development of a safe tanker route through the
Northwest Passage to Canso, Nova Scotia, that
would take between 32 and 45 days.
? Construction of a prototype icebreaking tanker with
a spoon-shaped bow that has broken 30 feet of ice-
conventional icebreakers are usually stopped by
anything more than 15 feet of ice.
? Success in drilling from a mobile platform rather
than a gravel island-the latter generally erode
from ice movement in about a year. The success of
the mobile, manmade platform holds out the possi-
bility of year-round drilling in the Arctic.
Dome's accomplishments in Arctic drilling and trans-
port technology have put Canada ahead of both the
Soviet Union and the United States in developing and
transporting Arctic energy resources
Irj?
While Dome has taken the initiative in these explora-
tion measures, the policies of the federal government
have encouraged it to do so. The NRC's present and
projected involvement with satellite tracking and
navigational facilities in the Arctic region has made
Dome's own navigational and ship-design studies
more worthwhile. In addition, the NEP's PIP grants
have encouraged Dome and the other private-sector
Arctic resource developers to increase the annual
duration of their drilling activities in the region.
Dome's development of a manmade mobile drilling
platform in the Beaufort Sea is an example of such an
effort to lengthen the drilling season.
Dome is the leading proponent of the establishment of
icebreaking tankers as the primary delivery system for
Arctic energy resources, arguing that the threshold of
recoverable reserves is much lower for tankers than it
is for pipelines-700 million barrels for a tanker
system as compared to 2.5 billion barrels for a
pipeline (see photograph). Dome estimates that the
cost of a tanker delivery system would be $2.4-3.2
billion, while a pipeline would cost at least $9.7
billion. Dome also maintains that a tanker system is
more adaptable to changing market demand and
energy reserve level requirements. Seeking Ottawa's
concurrence and financial support for a tanker deliv-
ery system, Dome officials claim that such a system
would be the best way to achieve the NEP's national
objectives of bringing Arctic oil into production at the
earliest possible date and maximizing regional and
industrial spinoff benefits for Canada. Behind Dome's
insistence on the utility of LNG tankers is the corpo-
ration's belief that Arctic island gas will reach mar-
kets ahead of Mackenzie Delta gas because Ottawa,
through Petrocan and Panarctic, has a direct stake in
the islands and therefore will derive profit from gas
sales."
Gulf Canada and Imperial Oil. Gulf Canada, Ltd,
currently conducts activities in 2.7 million acres in the
Beaufort Sea and is spending an estimated $546
million on the development of new drilling systems
and the construction of two new icebreakers and two
supply ships. The new vessels will augment Gulf's
present Beaufort fleet of two drilling units, two
icebreakers, and two supply boats. Gulf was the: first
of the major Beaufort developers to renegotiate its
leases under COGLA terms in May 1982. Gulf's
action has demonstrated that the requirements of the
NEP and COGLA can be accommodated and has
thereby given renewed impetus to private Arctic
energy development-particularly among foreign-
controlled corporations. Spokesmen for COGLA have
said that the agreement with Gulf will set a pattern
" Dome's arguments have apparently persuaded Ottawa of the
efficacy of a tanker delivery system. The March 1983 report of the
Senate Special Committee on the Northern Pipeline, for example,
recommended that "the transport of hydrocarbons from the Arctic
region commence by tanker."
.5
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The tankers being proposed to
transport oil through the Arctic
seas will be ice Class 10, dou-
ble-hulled vessels with an oil-
carrying capacity of 200,000
tons (approximately 1.5 million
Hydrocarbon Development in the Beaufort Sea-Mackenzie Delta
Region, EIS, Dome Petroleum Limited, Esso Resources Canada
Limited and Gulf Canada Resources Inc, 1982
between Canadian-owned companies and multination-
al leaseholders-Gulf had to agree to participate in a
consortium with several Canadian companies before
successful renegotiation was possible-and that Cana-
dian firms will gain frontier operating experience
from participation.
Imperial Oil is currently a member of a consortium
that plans to spend $600 million on exploration
activities in the Arctic through 1985. The Canadian-
owned firm Home Oil will be the operator of the
consortium, and the effort is expected to receive PIP
grants in the amount of 60 to 70 percent of the total
expenditure. Although foreign controlled, Imperial
itself will receive PIP monies amounting to about 35
cents per investment dollar. Imperial also tentatively
plans to spend $2 billion by 1990 to build a 500-mile
pipeline running from the Beaufort Sea south to
refineries in Alberta.________
l
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Nonenergy and
Renewable Resources
The Canadian Arctic is also rich in a variety of non-
energy resources such as zinc, lead, tungsten, gold,
copper, asbestos, iron ore, and silver. A lack of labor
and viable transportation systems have delayed the
development of these resources-the Yukon and
Northwest Territories produced only 2 percent of
Canada's total mineral output in 1976, an amount
valued at $334 million-but substantial federal subsi-
dies have recently reinvigorated exploration and de-
velopment activities. At the present time there are 12
mines operating in the Arctic area (figure 1).
COMINCO's $150 million "Polaris" zinc mine in the
eastern Arctic is the region's largest nonenergy re-
source development and the world's northernmost
metal mine. In addition, Mary River, east of Arctic
Bay on Baffin Island, is believed to be the site of an
exceptionally rich iand extensive iron ore deposit.
Canada's Arctic region has only a limited number of
renewable resources and they are primarily developed
at a subsistence level by the native population. Fish
and the pelts of various fur-bearing marine and land
mammals are the area's major renewable resources.
In December 1982, Ottawa announced plans to pro-
vide federal funds for the development of commercial
fishing grounds north of the Arctic Circle c
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Figure 1
Canada: Mineral Resources in the Arctic
i
180 Sov et,
Chukchi
~ ems,
average minimum
Bering Ea
United States
Alaska
Beach,, Banks ?King ehnstian
S~a Island ,Mecle?? "Whitefish
?Bent Horn: ?ter
K
o anoer ~
Adgo - ? p JBridport Inlet P, ^ z'
,?. Atkinson- proposed i' x"Polaris zinc mine
I nuvlk, Far5or+s~ Resolute' -^
Asbestos I Lake i
j1ArcticBay
~. ~eeairo -
ALead, zinc ? ?_? ,.., yi itoria s ! zinc Mary-River
.v~< ~Baffin~~
Islan
North
Pacific
Ocean
? Gasfield
? Oilfield
A Mineral deposit
0 200 Kilometers
0 200 Nautical Miles
Labrador
Sea
505996(546757)8-83
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Like most of the other polar nations, the United
States became interested in the Arctic region only in
the period after World War II. At present, US
interests in the region are focused on strategic and
military considerations, energy resource develop-
ments, and maritime transportation routes.
Since 1945 the world's Arctic region has evolved into
a superpower corridor for strategic weaponry. The
area provides the shortest route between the United
States and the USSR for ICBMs, manned bombers,
and ground-launched cruise missiles. To cope with
these threats, the United States has established, with
Canada's cooperation, a number of early warning
radar installations, the Distant Early Warning (DEW)
Line, across the breadth of the North American
Arctic. Several of these sites are located in Canadian
territory-on Baffin Island in the Arctic Ocean and
at Old Crow in the Northwest Territories, for exam-
ple-and Washington has recently requested Otta-
wa's permission to esta lish several new facilities and
to expand-existing ones see figure 4).
Since 1968 US energy development in the Arctic has
been centered in Prudhoe Bay in the Beaufort Sea off
of Alaska's northern coast. In mid-1977 reserves in
the area were estimated to be 10 billion barrels of oil
and I trillion cubic feet of natural gas. I C
/ i
The apparent abundance of hydrocarbon resources in
the Beaufort Sea has generated a boundary dispute
between the United States and Canada. The contro-
versy involves a question about whether the 141st
meridian, the present boundary line between Alaska
and the Yukon Territory running through the Beau-
fort Sea, represents the border between US and
Canadian territory from the coastline to the North
Pole. Ottawa maintains that this line was established
by the Anglo-Russian Treaty of 1825 and continues to
remain in effect. Washington rejects this assertion
and argues for an "equidistant" line which would
create a meandering boundary between adjacent or
Figure 2
Canada-United States Boundary Dispute
opposite shores. The line proposed by the United
States veers further eastward, away from the 141st
meridian and into traditionally Canadian territory, as
it is traced northward from the Arctic Ocean shore-
line (see figure 2). While the dispute stands dormant
at the moment, a hydrocarbon discovery of commer-
cially exploitable dimensions straddling the boundary
probably would spark renewed bilateral contention.
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The security of maritime transportation routes
through the Arctic Ocean is another point of conten-
tion between Washington and Ottawa since Canada
claims exclusive control over navigation in the North-
west Passage. Arctic Ocean routes are essential to the
movement of oil from Alaska's north slope fields to
the US eastern seaboard either as a commercial
venture or in an unexpected emergency situation such
as that which might be generated by another OPEC
oil embargo. Those same routes are also important to
the worldwide mobility of US naval forces, particular-
ly submarines, and the resupply of Arctic DEW line
sites and US bases at Thule and Sondre Stromfjord in
Greenland.
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Figure 3
Canada: Arctic Pilot Project Route and "Canada Lands"
Soviet
Upion
North Jun
Pacific
Ocean
Beaufort
Sea
aNin\
8~ I
Greenland
e mark)
Fort*
Chimo
\ Quebec
Greenland
See
Sairdre
Stromfjord
-. # Gros j
Terminal
l
Ontario x 5Quebecgf'
5+ Lewrn e R
Montreal
\_ r^
?? ~ Ottawaa'7~
!5~=cwr\
.Sr Law
In
'4 P.E.I.-
505987 (A03067) 8-83e
awson,
~~
Yukon j W lls,
Tert.
hitehorse,
T i,e,-- S erLake
/ \ _ Fort Smith
C ,,,.r~~. # f i.ll
1 / Churchill'
British / ..,. _ .._ 1
4Yinrtipeg
~RegCna o !
Winnipeg
"tgloolik
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Figure 4
Canada: Military Facilities in the Arctic Region
Magadan
Baffin
Bay
Bering
Sea .sj
East
S w",",
average minimum
extent of sea ,ce
Kara
Sea
^ Canadian military facility
o DEW line station (Canada/U.S.)
0 500 Kilometers
0 500 Nautical Miles
;,L'ongyearbyen
SVALBARD
'Norway)
=Fairbanks
ohorage''
North
Pacific
Ocean
Fort
St. John.
Prince
George,
;Vancouver
U1.
Sea,.'art
Sea
M Inuvik
G . t
Lake
-Ellesmere
rlsland
e .,
Edmontoie
Calgary
,.
Banks
Island
Northern Command
Headquarters
Yellowknife
Chelyus
Lap'ev''.,
Sea
Churchilh"
QUEEN
ELIZABETH
ISLANDS
mssS,
Hudson
Bay
"NOVAYA
ZEMLYA EMurman
Barents
Sea
Greenland
Sea
Baff i't.A,
o. Island
andre
romtjord
Arkhangel'sk,
Dav,,.,a
.XStrait l?' N
a S
Frobisher'-
Bay...
Fort
Chimo
Labrador
Sea
Goose Bay",
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Figure 5
Canada: Northwest Passage Through the High Arctic Islands
Principal route
Secondary route
0 200 Kilometers
0 200 Nautical Miles
15 ri -Alerts`,
Hay
Rivers
Meighen - ?Eu reka
Island Axel
Heiberg Ellesmere
Hier Island
a,gnes Island Thule
Island Am und
a,ngnes. - .
stand
K,ng Oh n sloe
Island Little
Corn walllS
Bathurst sland
-
Island Devon
_ Resolute Island
King
Wil ham
Island
Southampton
Island
Churchill
Norman
Wells
Bathurst 'i
Inlet
L3.,"Itn
Greenland
/(Denmark)
Lihtador
Sea
Nuuk
(Godthab)
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Figure 6
Canada: Jurisdictional Claims in the Arctic
U. S.
"claim
Arctic
Ocean
Beaufort i
Sea. /Banks"
j Island
Tuktoyaktuk
Inuvik
Yukon
Terr.
Island
I UEEN o'
z ELIZABETH Thule
a~ .~.
Victoria
Island
Canadian Arctic Waters
Pollution Control Zone
0 200 Kilometers
200 Nautical Miles
Greenland
,,'(Denmark)
1973 Continental
Shalf J euinriarv
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