European Central: Greenland Gives Up Pipeline Dream of Producing Oil

REDA&CO

Greenland is ending oil exploration after unsuccessfully trying for the past 50 years. The reasoning is not because there is a lack of oil but instead because of the difficulty of retrieving the oil. Government officials stated that they believed the price to extract oil would be too high to make it profitable.  Greenland is estimated to have 17.5 billion barrels of oil, but the problem is the island cannot take advantage of this estimated wealth due to being unable to easily extract it. Greenland will have to respect four unexpired exploration licenses that two companies still possess, but given the fact that oil exploration has been unsuccessful for decades, it is unlikely that either of these companies will be successful with their remaining licenses.

For Greenland, ending oil exploration is a disappointment due to the hopes the island had for years that oil could lead to independence. Two-thirds of Greenland’s budget comes from Denmark, while a third comes from fishing. This would make it incredibly difficult for Greenland to declare independence from Denmark unless it found other sources of revenue, which is why oil exploration has been so important to the island. As the majority of Greenland is covered by ice as thick as 4 kilometers in some parts of the island, it has limited options to find other sources of revenue.  Greenland has been self-ruled since 1979 and has had the ability to declare independence since 2009 if Greenlanders vote in favor of independence through a referendum. The problem for Greenland is despite having the ability to declare independence now for 12 years, there is concern about the feasibility of independence without a strong economy.

In addition, not all Greenlanders are keen on relying on gas exploration or mineral extraction for revenue. Mute Bourup Egede, the Prime Minister of Greenland, halted a mineral extraction project due to environmental concerns. There are concerns over how quickly ice has been melting in the country, which can explain why some Greenlanders including Prime Minister Egede are cautious about causing more environmental damage. At the same time, ice melting can lead to further revenue due to it being easier to extract minerals. Climate concerns were another reason for suspending oil exploration within Greenland besides concerns that the endeavor is not economically feasible.

Economic independence is no doubt a priority for Greenland, but Greenlanders have a right to be cautious considering the plights of Nauru. Nauru had one of the highest GDP per capitas in the world due to the mining of phosphate, but after the mining ended the country fell back into poverty. What is worse is that the country’s landscape has been largely destroyed due to mining and now Nauru lacks the funds to help restore the island’s environment to how it was before mining occurred. This serves as a cautionary tale for not only Greenland, but any country that may be enticed to exploit natural resources, but then become heavily dependent on said resources and never find a replacement. For Greenland it is clear that oil was intended to become a way for the island to become independent of Denmark, but the question would have been for how long the country could rely on oil if the exploration was successful. It may in fact be a blessing in disguise that the exploration was not successful. If it was and Greenland successfully became independent of Denmark, what would the island have done if it lost the revenue from oil? Many nations around the world are pushing for the usage of only renewable energy which would have put an independent Greenland in a difficult position.

Instead of oil, Minister for agriculture, self-sufficiency, energy and environment, Kalistat Lund, hopes to attract investments to the island for sustainable projects. One such project would be hydropower which is supported by the Naalakkersuisut, Greenland’s executive body since 1979.

While independence has been viewed as a distant dream, it may still become a reality in the future. It appears that young Greenlanders are more likely to embrace their indigenous traditions, rather than those of Denmark like older generations. Older generations were partially more inclined to prefer Danish traditions to the thought that Denmark represented modernity and if Greenland ever aspired to be fully independent, Greenland would have to become more Danish. This resulted in Greenlanders sending their children to study in Denmark. Now, however, young Greenlanders are trying to revive pride in indigenous Greenlander culture. This revival is important, particularly due to a divide in opportunities for Greenlanders.

Due to many Greenlanders having attended school in Denmark and becoming fluent in Danish, this created a Danish-speaking group of elites in Greenland. This can be seen by the fact that a majority of the government speaks Danish, meanwhile, most Greenlanders only speak Greenlandic. In 2018 it was proposed that English should replace Danish as the most important second language for Greenlanders to learn, but this proposal was shot down. There were concerns that this would severely limit options for employment and higher education for Greenlanders. This is an interesting viewpoint considering that English has arguably become the most important language worldwide, meanwhile Denmark only has a population of 5 million people. This reveals that Greenland has become heavily tied to its former colonial ruler. It is also important to realize that Greenland only has a population of 56,000 people, so a country with 5 million inhabitants such as Denmark is a large country in comparison. Part of this pushback on English may be because Greenlanders are able to attend higher education for free in Denmark. This would not be possible for Greenlanders in the United Kingdom or the United States, as Greenlanders would be considered international students and have to pay even more in tuition and fees. While not independent, this is an advantage of Greenland still being part of the Kingdom of Denmark. Another problem is that the island currently does not have enough teachers to teach English. Currently, students initially study in Greenlandic, but the number of courses in Danish continues to increase annually until students take all of their courses in Danish.

The road to Independence remains complicated for Greenland, and oil is not the answer. Nothing says that Greenland cannot find another path towards increasing government revenues meanwhile satisfying the concerns of environmental advocates. Time will tell if a generation that embraces indigenous traditions will be able to create their own road map towards an independent Greenland.