Arctic Resources: Oil, Gas, and Minerals

What Lies Beneath

The Arctic is one of the last great resource frontiers. The US Geological Survey's 2008 Circum-Arctic Resource Appraisal estimated that the region holds approximately 90 billion barrels of undiscovered oil, 1,670 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids. Most of these reserves are offshore, concentrated in a handful of geological basins — the West Siberian Basin, the East Barents Basin, and areas off the coasts of Alaska, Canada, and Greenland.

Beyond hydrocarbons, the Arctic contains significant deposits of rare earth elements, zinc, nickel, platinum, and other minerals essential for modern technology. Greenland alone is estimated to hold one of the world's largest rare earth deposits — a resource base that attracted global attention when the first Trump administration floated the idea of purchasing Greenland from Denmark in 2019, an offer Denmark flatly rejected.

The Politics of Extraction

Russia is by far the most active Arctic energy producer. Its Yamal LNG project on the Yamal Peninsula began shipping liquefied natural gas in 2017, with Chinese and French financing. The Arctic LNG 2 project, designed to expand output, has been severely disrupted by Western sanctions since 2022 — a vivid example of how geopolitics and energy intersect in the region.

Norway extracts oil and gas from the Barents Sea, balancing its identity as an environmental leader with its economic dependence on hydrocarbon revenues. Canada has imposed a moratorium on new Arctic offshore drilling. The United States has oscillated — the Obama administration blocked Arctic drilling leases, the first Trump administration reopened them, and the Biden administration restricted them again.

Environmental groups argue that any Arctic resource extraction is incompatible with climate commitments. An Arctic oil spill in ice-covered waters would be extraordinarily difficult to clean up, and the fragile Arctic ecosystem is slow to recover from damage. The fundamental tension is between the economic value of what lies beneath the ice and the environmental cost of getting it out.

Case Study: Yamal LNG and the Sanctions Trap

Russia's Arctic energy ambitions offer a concrete lesson in how geopolitics can override geology. The Yamal LNG plant, which began exports in 2017, succeeded because it locked in financing and technology before relations with the West collapsed — China's Silk Road Fund and CNPC, plus France's TotalEnergies, took equity stakes, and the plant relied on foreign-built modules and ice-class LNG carriers.

Its successor, Arctic LNG 2, ran into a wall. Compare the two:

The takeaway: Arctic reserves are worthless without the specialized icebreaking LNG tankers, offshore technology, and financing that only a handful of firms provide. When sanctions severed access to those inputs, the resource stayed in the ground. Geology sets the potential; geopolitics decides whether it is realized.