Thawing ice has opened up the far North, prompting a new scramble for territory and resources

A SHOCKING wind whips off the Arctic Ocean, the snow swirls in fat flakes and the ends of Sverre Kojedal’s moustache are starting to freeze.

Around us more than 2,000 workers are toiling under floodlights on one of the largest and coldest building sites in the world, a vast new gas terminal deep inside the Arctic Circle that will soon begin shipping liquefied energy to the US and Europe.

Welcome to Hammerfest, Norway, the northernmost town in the world and the frontier of a new “black gold rush” in the Arctic, prompted in part by global warming.

Climate is changing the world’s economy as well as the environment, and the thawing of the polar ice is opening up the Arctic as never before, creating shipping routes and fishing grounds, promising tourism opportunities and, most lucratively, the exploitation of new oil and gas fields. Prospectors are pouring into the Arctic, and Hammerfest, once a tiny settlement on the outermost rim of the habitable world, has become the new Klondike.

At weekends, after a week of 12-hour shifts, men from 60 nations pour into the bars that are springing up along the sea front. They get drunk, play cards and sing about home. Then the fights start. “There just aren’t enough girls to go around,” Sverre, of the Norwegian company Statoil, said.

This is Paint Your Wagon, Arctic-style, at minus 15C (5F). The men have come from all over the world to seek their fortunes in what was once a frozen wasteland, and there is a fortune to be made.

Work on Snow White, the liquefied natural gas processing plant on the edge of Hammerfest, began in 2002. Since then, gas pipes have been laid running 140km (87 miles) out to the Snow White gas field, 30,000 lorryloads of concrete have been poured into a looming grey edifice, two million metres of cables have been laid, and nearly three million cubic metres of rock blasted to form a breakwater against the freezing ocean.

Today the Snow White terminal rises, floodlit in the afternoon winter darkness, like some ghostly set of a James Bond film, a man-made compound in which workers scurry about, surrounded by ice cliffs and barbed wire.

Next year the gas will start to flow, and so will the money. “We estimate the Snow White project will earn 400 billion Kroner (£34 billion), and the reservoir is expected to last at least 30 years,” Sverre said.

But if the scientists are right, the burning of this fossil fuel will add to greenhouse gases, the world will warm more, the ice will become thinner and smaller, and the prospectors will be able to push ever farther north in search of energy.

Norwegian environmentalists have bitterly opposed the oil-and-gas exploration, saying that the drilling in the Barents Sea puts at risk a vital and fragile ecosystem. Protests caused the Norwegian Government to halt oil exploration in 2001, but the ban has been lifted in most areas.

Put simply, the receding ice makes it far easier to find, drill and extract oil and gas. The Arctic Ocean is thought to contain at least a quarter of the world’s undiscovered reserves.

Given the volatile complexity of oil politics in the Middle East, Norway offers a stable alternative supplier. “There is not going to be a revolution in Norway,” Sverre said. “We are too relaxed.” The Canadian Government has opened up areas for exploration, and scientists have found evidence of oil reservoirs 320km from the North Pole.

But the biggest prize so far is the Shtokman field in Russia, the largest offshore gas reservoir in the world, with a reservoir ten times the size of Snow White. Lying 560km into the Arctic Ocean presents piping difficulties but, as Sverre said: “With warming there will be more open sea, and it will be easier to get to.” While scientists dispute the causes of global warming, few deny that the Arctic is thawing, and fast. In August last year a Russian vessel, the Akademik Fyodorov, became the first to reach the North Pole without an icebreaker. With temperatures expected to rise a further 5.5C in the next 100 years, the frozen white mantle that has crowned the world for millennia may soon vanish, replaced by a seasonal sea.

While that spells potential disaster for ecosystems, plant and animal species and coastal communities, energy companies are not alone in scenting profit from climate change at the top of the world.

Warming Arctic waters are already creating new fishing grounds as fish migrate and adapt to new conditions. The shrinkage of the ice means wider fisheries, and fishing in virgin waters, but also a longer Arctic fishing season.

Where fishermen can go, tourists follow: one travel company in Murmansk is offering cruises to the North Pole by icebreaker, with tickets costing up to £17,000.

The most staggering beneficiary of the thaw may be Pat Broe, an American railway businessman, who purchased the Hudson Bay port of Churchill, Manitoba, from the Canadian Government in 1997 for about £5.

At that time dilapidated Churchill was ice-bound for eight months of the year. Mr Broe was buying denationalised railway track and thought that Churchill might come in useful. Quite how useful became apparent only when the ice started to recede. The port could now be open for ten months annually, making it a vital link with Russia across the Arctic, and reducing the length of the shipping route. The New York Times estimates that, thanks to climate change, Mr Broe’s investment could net him about $100 million a year.

The so-called Arctic Bridge is only one of the shipping routes that could become hugely profitable if the meltdown continues. The northeast sea route, north of Siberia, is becoming more navigable, which would allow shipping to sail from Europe to northeast Asia, cutting the journey by more than a third.

The fabled Northwest Passage, from the Atlantic to the Pacific through the Arctic archipelago of Canada, may be open to shipping within the next few decades. From the 15th century explorers tried to find a commercial sea route north and west around the American continents, a search that claimed the lives of Sir John Franklin and his crew.

Cargo from Europe to the Far East could cut 4,000 miles from the journey by cruising through the passage, compared with the route through the Panama Canal. Several ships took advantage of thinning summer ice cover to cross the Northwest Passage in 2000, and already a dispute has started between the US and Canada over access rights. The US regards the passage as international waters, while Canada insists that the waterway is Canadian territory.

The dispute over the Northwest Passage, long before it has defrosted sufficiently for commercial traffic, demonstrates another aspect to the scramble for the Arctic: no one is quite certain who owns it, and there is no international treaty dividing the Arctic between the eight countries with claims: Russia, the US, Canada, Norway, Denmark, Sweden, Finland and Iceland. As with the earlier gold rush, staking out a claim provokes an immediate counter-claim by the neighbours and then a brawl.

The Akademik Fyodorov did not turn up at the North Pole by accident. The Russian geographical research ship was there to bolster Russia’s 2001 claim to almost half the Arctic Ocean, including the pole. Russia and Norway have been arguing over demarcation for 35 years.

Denmark has laid claim to the North Pole, arguing that it sits on Greenland’s continental shelf, and is locked in a dispute with Canada over Hans Island, an uninhabited, freezing lump that could determine rights to drill for oil in the Nares Strait.

Under the Law of the Sea, countries control territorial waters up to 200 nautical miles from their coasts and may claim additional mileage on the continental shelf, but the US has yet to sign the law, and there is a debate about the best way to share the ocean.

Russia wants to use the “sector method”, which would slice up the Arctic, with the North Pole being shared; others want the “median line method”, which would create regions proportional to each country’s coastline. Tension is building in a scramble for territory and natural resources that has been compared to The Great Game, the phrase coined by Rudyard Kipling to describe the tussle over Asia in the 19th century.

Standing on top of his great concrete Snow White palace, facing into the howling Arctic wind, Sverre Kojedal, with his frozen Viking moustache, seemed like a frontiersman in the old tradition.

“We are opening up the Barents Sea,” he said. “We are creating a new province.”

Global warming seems an almost impossible notion on this icy coastline, but out there in the frozen wastes the ice is slowly melting, and a new struggle over the world’s dwindling resources is rapidly heating up.