Adaptation Actions for a Changing Arctic: Perspectives from the Barents Area

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Adaptation Actions for a Changing Arctic: Perspectives from the Barents Area

give oil and gas development high priority, noting that new technology (e.g. horizontal drilling, subsea production, seabed compression systems, multiphase flow), renders exploitation possible in previously inaccessible areas. Updating extraction and production technologies will mean that more challenging fields in the Barents Sea will be feasible for exploration with reduced risks (Harsem et al., 2011). In the context of climate change policy and the 2°C global temperature target from the ParisAgreement,natural gas emerges as amore attractive energy source than oil owing to the lower carbon dioxide emissions, although to meet the Paris Agreement target would actually require zero emissions.Hydrocarbon development is bound to be increasingly influenced by climate policy considerations as all the Nordic countries have set ambitious emission reduction targets. In addition, there is a need for innovation and economic activities to respond to the major future potential in the increased access to and distribution of natural gas. There may be a growing global need for liquefied natural gas to supplement natural gas supplies, and it is a promising source of energy especially in other industries such as mineral processing and shipping, and as an input to future electricity production. 6.3.3.2 Alternative energy sources Future developments of the petroleum industry in the north will largely depend on world market prices of oil and natural gas, advances in offshore technology, maritime transport, and dynamic global energy supply (e.g. fracking and the unconventional oil revolution in the United States, and a growing demand from economic powers such as China) (Knobblock and Pettersson, 2010). Implementation of the Paris Agreement (i.e. limiting global warming to below 2°C above the pre-industrial level) will increase pressure on governments to find alternative energy sources. These include hydropower, wind power, nuclear power, solar power, and bioenergy. Hydropowerisbasedonthehydrologicalcycle,whichisdrivenboth by prevailing climate and by topology.Thus,the resource base,and therefore hydropower generation is dependent on future changes in climate including extreme weather events (Arent et al., 2014, Chapter 4). Snowmelt in the Barents area is an important factor in the annual water cycle andwill affect hydropower availability in the future (Schaeffer et al.,2012).However changes in the share of precipitation falling as snow, and the climate response of glaciers make resource estimates complex (Arent et al., 2014). Reservoir storage capacity could help to reduce the potential seasonal shifts resulting fromearlier snowmelt (Schaeffer et al.,2012).According toThorsteinssonet al.(2013),increasingmeltwater delivery is likely to have beneficial effects onhydropower production in theNordic region.Similarly,Kirkinen et al.(2005) estimated for Finland that hydropower production could increase by 7–11% between the periods 1961–1990 and 2021–2050. The Barents area has excellent wind resources.There is potential to build a number of wind power plants with corresponding transmission lines to distribute the power. To adapt to Arctic conditions, technical solutions such as anti- and de-icing systems have been developed in recent years (Wallenius and Lehtomäki, 2015). Climate change models (a set of CMIP5 models) show little or conflicting changes in wind speed based on increasing energy in the atmosphere, decreasing

in the period 2010–2014 (Nyvold et al., 2014). Increased oil and gas activity has also added value for delivering goods and services in related industries: the hotel trade, transport and communication,food and consumables,information technology, office buildings, office supplies, and engineering (Barlindhaug, 2005). Nevertheless and most importantly, the average benefit for the local industry in the Barents Region has not been more then 5–8% of the total value of contracts. This means that the major share of contracts went to international companies with headquarters located outside the region (Holter andMagnusson, 2014). One reason for this is a mismatch between existing local capacities (e.g. knowledge and skills needed for international oil and gas field development) and the industry’s need to develop petroleummegaprojects of international quality.In the long term, increased involvement of the local industry stimulated by oil and gas industry development can potentially lead to increased urbanization which may in turn further stimulate the increased local expertise needed for further development (Arbo et al., 2007). Conversely, increased oil and gas activity may present a risk to traditional livelihoods (Stepien et al., 2014). The combined effect of climate change and socio-economic change is that in the long-term the development of oil and gas offshore resources will be more feasible compared to onshore resources.Amoderate rate of field development and investment are to be expected,mostly for the largest oil and gas fields, which will create moderate effects on the local economy in the Barents Region. The cumulative effects for the region, however, remain unclear. Development of oil and gas requires a long planning horizonwithgoodunderstanding of the future economic situation supported by good historical statistics (such as for icemovement, change in operational conditions, and regional spin-off effects) (Harsem et al., 2011). Such projections are increasingly difficult to develop due to less predictable climatic,environmental,market and geopolitical conditions (Bourmistrov et al., 2015). Any significant increase in oil and gas activities will result in ecosystem disturbance (Andrew, 2014), with a major oil spill representing the most significant ecological impact for the aquatic environment in the Arctic, especially in ice-covered waters.For example,contaminating food sources and increasing risk of fish stock losses with the consequent loss of current and future fishing revenues (AMAP, 2010) (Section 6.2.2.2, Box 6.3 and Chapter 2). Oil and gas activity will also contribute to increased greenhouse gas emissions and thus to climate change. With evenmoderate increases in oil and gas activity,regional and national gross domestic product (GDP) will be stimulated by increasing local employment in the oil and gas sector, increasing the businesses supporting the oil and gas activities and increasing local population from in-migration and reduced out-migration (Barlindhaug,2005).Local effects will be greater at the exploration and construction phases and significantly less in the production phase.Expected impacts include increasedmunicipal tax income due to improved revenue from employment and property taxes, and increased standard of public services provision (e.g.improved standards in schools) making locations more attractive for businesses and further socio-economic development. Another consequence of increased oil and gas activities is the potential for innovation and entrepreneurship among local and regional companies. Energy policies of Russia and Norway