Norwegian Arctic and High North Policy. Opportunities and Challenges

The foreign minister’s introduction was
based on the following speaking points
Check against delivery

Excellencies, ladies and gentlemen,

• It is a pleasure for me to speak here at Stiftung Wissenschaft und Politik and to have the opportunity to present a Norwegian foreign policy perspective on important issues in the Arctic and the High North.  
•  I present you this picture because it is an illustration of a different way of perceiving the High North - challenging the traditional notion of the centre and the periphery. These are key areas of my country, and of my country’s interests.
• Since my government took office in 2005, High North issues have been at top of Norway’s foreign policy agenda. Today these issues are becoming familiar to more and more decision-makers as interest in the Arctic region is growing fast. Only a few years ago, even the Arctic states themselves tended to ignore this region, for the simple fact that economic interests and political ambitions drew their attention southwards. 
• The Arctic merits – and receives - increasing consideration from many states, for ecological, economic and geopolitical reasons. We welcome this. Developments in the Arctic have global ramifications. Global actors have legitimate interests in the region and a valuable contribution to make.
• To me, it is no surprise that also Germany is showing an active interest in the Arctic and the High North. Germany, with its technological skills, entrepreneurial spirit, and political views that are similar to ours, is a very welcome and needed partner in the north.
• In addition, Germany and Norway both have proud traditions of polar research. Alfred Wegener, who was born in Berlin and became father to the theory that our continents once constituted one landmass before they started drifting apart, was one of several fearless scientists who overwintered in the ice and challenged hunger and frost in order to provide humanity with knowledge that is still valuable in our effort to save the planet. Just like the Norwegian explorer Roald Amundsen, Wegener literally sacrificed his life for this work. One of the most important research stations on the Norwegian archipelago of Svalbard is run by the Alfred Wegener Institute.
• Before I elaborate on today’s main subject, let me say a few words about Norway’s role as a major producer and exporter of oil and gas – and our cooperation with Germany in this field.
• Norway’s energy sector has been fundamental to the building of the Norwegian welfare state since the 1960s.
• Energy is the area where Norway leaves its clearest and most important footprint, both here in Germany, in Europe and globally.
• We are the world’s sixth largest oil exporter and second largest gas exporter, and the sixth largest producer of hydropower.
• Almost 30% of all gas consumed in Germany originates from the Norwegian continental shelf. Germany is ranked as the most important market for Norwegian gas. Moreover, Norwegian exports meet nearly 20% of the gas consumed by the EU.
• Climate changes and resources such as energy are two of the main drivers of the developments in the High North – which I will turn to.

But first, there is Russia.

• For nearly 20 years we have lived with a neighbour who has suffered regime collapse, great instability and changes in social and governance structures. It is no wonder that it has taken time to expand the potential for cooperation.
• Russia is no longer the Soviet Union. Now we see more clearly what a fundamental change this has caused, although there was increasing openness in the final years of the Soviet Union. In 1987 President Gorbachev proposed turning the High North into an area of cooperation. He was in favour of international cooperation on the use of resources and research, and he wanted to open the Northern Sea Route to international traffic.
• Today, Russia is actively engaged in High North and Arctic affairs. But as we perceive the increased level of activity, we also see that they do so in accordance with established norms and international law.
• In a historical perspective we – Norway and Russia – are still in a phase of “rediscovering” each other. The border where East met West, the line of the Iron Curtain where NATO faced the Warsaw Pact in the North, is now an area of increasing cross-border cooperation between the neighbouring peoples of Norway and Russia. In 1990 there were 3000 border crossings annually. Today there are over 100 000 – and we work to facilitate cross-border passing and activities even further.
• And on 27 April this year we showed the world how good neighbours resolve border disputes: by means of peaceful negotiation, firmly based on modern principles of international law. The Norwegian and Russian negotiating delegations reached agreement on the maritime delimitation line in the Barents Sea and the Arctic Ocean. It took us 40 years. Lately, the much-improved spirit of cooperation and the acknowledgment that we have common interests in finding solutions together paved the way for the agreement. I will come back to the implications later.
• And last week we had the Pomor exercise – the most extensive joint Norwegian-Russian military exercise ever. And the first joint exercise for 16 years. It was a great success.  
• But of course, Russia will continue to be a demanding partner, and our bilateral relations will require the same constructive approach also in the years to come. We know that cooperation with Russia can be a challenge. Norwegian companies that have invested in Russia have been faced with an unpredictable investment climate. And like many other countries, we are concerned about the antidemocratic development in Russia in recent years. But there is no alternative to our long-term strategy of dialogue and cooperation.

The second driving force in the High North is climate change.

• Front row seats: The Arctic is not where the consequences of climate change will be most severely felt, but it is where they are first seen. The region is therefore very important for climate change research
• The Arctic is now experiencing some of the most rapid and severe climate changes on earth, and even greater changes are projected. The changes will also affect the rest of the world through increased global warming and rising sea levels. The consequences of melting ice in the Arctic can be seen for example with the drying of Lake Chad in Africa.
• Arctic sea ice is retreating at an alarming rate. Two weeks ago, the sea ice cover fell below the recorded level at the same time in the record year of 2007, the year the level was nearly 50 percent lower than during the 1950s and 1960s. The Greenland ice sheet is melting, and the Arctic snow cover and permafrost is being reduced.

The third driving force is resources.

• There are important renewable and non-renewable resources in the region. Some of the resources in the region are accessible to states and individuals, and the harvesting of these must be regulated and controlled. Other resources have previously been out of reach, but are now becoming accessible and are therefore attracting attention, such as oil and gas.
• German technology played a crucial role in the industrialisation and electrification of Norway, and has continued to play an important part in the age of oil and gas. This will also be the case when we now turn north. In fact, just as Oslo’s first power station was delivered by Schuckert and Co. of Nuremberg, the Munich engineering company Linde was responsible for the engineering, procurement and construction of the Melkøya terminal for liquefied natural gas (LNG) from the Snow White field – you can see the terminal on this picture. The previous German foreign minister Steinmeier and I went there in March 2006 to see the construction of the facilities. Production started in 2007. The LNG is exported mainly to Spain and the US.
• The Snow White field in the Barents Sea is the world’s northernmost offshore gas field. Melkøya is the first and largest European plant for production of liquefied natural gas (LNG). And so far the only LNG terminal in the Arctic region. 
• Russia is the largest supplier of natural gas to the European market, followed by Norway. Between us, we supply more than 40% of the gas that is consumed in the EU. Energy resources are of great importance in the Russian economy. And Russia has defined Norway as a strategic energy partner in the Arctic, and we are on the threshold of an era of opportunities.
• It has been estimated that about 13% of the world’s undiscovered oil resources and 30% of the gas resources could be located in the Arctic.
• All projects in the Arctic are a technological challenge. They require larger investments than projects in other petroleum provinces. We need to position ourselves with sound policies and management plans that balance concerns related to oil, gas, fisheries, nature conservation, environmental protection and climate change. 
• If we combine these three key driving forces – Russia, climate change and resources – we clearly see why the High North is a strategic priority area for Norway. It affects the lives and activities of people in the north.
• Let me now turn to the framework of the region:
• Borders and international law are important precisely because they define framework conditions.
• Two of the most important contributions we have made in recent years have been the establishment of our borders in the north and the establishment of a legal framework for the Arctic.
• In 2005 there were many dashed lines on the map of the sea areas in our northern waters, lines indicating maritime boundaries that were not yet finally established, even though they were respected.
• We have now drawn the lines. As I mentioned, we agreed on our final outstanding issue regarding the delimitation of our border with Russia two months ago.
• The agreement opens up new prospects for cooperation and development in the north on resources, business activity, jobs, knowledge and welfare.
• The absence of a boundary has been a constraint. Establishing a delimitation line opens up new opportunities. Here, we must strike a sound balance between petroleum activities, fisheries and the environment.
• We have also resolved issues with other High North partners. In 2006 we entered into an agreement with Denmark and the Home Rule Government of Greenland on the delimitation of the continental shelf and the fisheries zones in the area between Svalbard and Greenland.
• Later that year, we reached agreement with Iceland and the Faroe Islands on the delimitation of our respective continental shelves outside 200 nautical miles.
• Furthermore, the outer limit of Norway’s continental shelf has now been clarified. We have documented the extent of our continental shelf outside 200 nautical miles in accordance with the UN Convention on the Law of the Sea. In April last year, we were the first Arctic coastal state to have our data approved by the UN Continental Shelf Commission.

Then we have the Arctic Ocean. 

• What rules apply there? Is this uncharted territory where it is urgent for countries to assert themselves? The answer is “No”. Norway, Russia and the three other Arctic coastal states – US, Canada and Denmark/Greenland - have taken responsibility and clarified this uncertainty.
• The Foreign Ministers of these countries met at Ilulissat, Greenland, in 2008 and issued a declaration in which we state our agreement on this approach.
• The message was clear: We agreed that we have an international legal framework in place – namely the UN Convention on the Law of the Sea. All states abide by the Convention’s provisions, including the US, although it has yet to be put forward by the US Administration and ratified by the US Senate.
• We also agreed to settle all disputed issues in accordance with the stipulations of the Convention.
• Furthermore, we must deal with the increase in human activity in the north. A new, important agenda is emerging: cooperation on new shipping lanes.
• The melting of the ice is opening up new opportunities for international shipping.
• This map highlights some of the main stake-holders: large economies like China, Japan and Korea, with high import/export volumes. 
• This again illustrates the global character of the economic potential, the fact that the Arctic is and must remain an open region. The legitimate interests of non-Arctic states. 
• An ice free Arctic Ocean could shorten distances between the North Atlantic basin and East Asia by about 40 percent.
• This picture shows a German commercial freighter sailing along Russia’s northern coast last September, escorted by a Russian ice-breaker - a pioneering undertaking. Several logistic, administrative and other matters need to be resolved before this becomes an everyday event. The Arctic will remain a region with harsh conditions year-round even without sea ice cover. 
• But we already see a sharp increase in cruise tourism in the area of Svalbard, with thousands of tourists at any given time in the high season. These developments also entail important challenges, where key words are safety of navigation, as well as search and rescue capacity.
• As the importance of the Arctic and the Arctic Ocean grow, it is essential that key stakeholders have arrangements for cooperation on matters relating to this region.
• This is where the regional bodies such as the Arctic Council come in. The Council is made up of the five coastal states and the other Nordic countries. The work of the Arctic Council is producing tangible results, as we experienced during the three years we held the chairmanship. 
• The Arctic Council continues to collect information on climate change in the Arctic, for example on the retreat of sea ice, the melting of the Greenland ice sheet and the reduction in permafrost and snow cover.  
• It is also important to establish arrangements for search and rescue in such a large and at times hostile sea area. A working group under the Arctic Council is working on a search and rescue agreement, and we hope to make considerable progress on this at the next meeting, which will be held in Oslo later this month.
• Arctic cooperation has been consolidated and updated in the last few years. And the member states must be prepared to deal with the sharp increase in international interest in the Arctic, for example that being shown by Asian countries such as China, Japan, India and South Korea. The situation in the Arctic is of global interest, and these countries have legitimate interests in the region. 
• I will also put emphasis on the cooperation in the Barents Council. This cooperation takes place between governments, but also between municipalities, counties, institutions, organisations and people in the Barents region, thus engaging the regional level in the development and realisation of the potential for cooperation in the Barents.
• Increased focus on the High North is also strengthening Nordic cooperation. The Nordic countries are partners in the Barents Cooperation. We are all members of the Arctic Council, making up five of its eight members, and we are all members of the Council of the Baltic Sea States. The Nordic cooperation is in many ways the engine of the regional cooperation in the North.
• In addition we have the EU-initiated Northern Dimension, which brings together Norway, Russia, Iceland and the EU, represented by the European Commission.
• We welcome the EU’s engagement, and we are also in favour of the EU having permanent observer status in the Arctic Council. Our European partners have a lot to contribute as regards research and expertise, industry, trade and financial power. And they have the same legitimate interests in the region as for example China and India.
• It is therefore important for us that the EU and its member states have a good grasp of the situation in the north. I am happy to see that the EU’s largest member, Germany, in many ways is leading the way when it comes to Europe’s interest in and expertise on the High North.
Thank you