Breaking the Ice: Mapping a Changing Arctic
The Arctic is changing. As retreating ice cover makes this region more accessible, nations with Arctic real estate are thinking of developing these subzero landscapes and the resources below.
As the Arctic evolves, a vast amount of resources will become more accessible and longer shipping seasons will improve Arctic logistics. But with a changing climate and increased public pressure to limit resource development in environmentally sensitive regions, the future of northern economic activity is far from certain.
This week’s Chart of the Week shows the location of major oil and gas fields in the Arctic and the possible new trade routes through this frontier.
A Final Frontier for Undiscovered Resources?
Underneath the Arctic Circle lies massive oil and natural gas formations. The United States Geological Survey estimates that the Arctic contains approximately 13% of the world’s undiscovered oil resources and about 30% of its undiscovered natural gas resources.
So far, most exploration in the Arctic has occurred on land. This work produced the Prudhoe Bay Oil Field in Alaska, the Tazovskoye Field in Russia, and hundreds of smaller fields, many of which are on Alaska’s North Slope, an area now under environmental protection.
Land accounts for about 1/3 of the Arctic’s area and is thought to hold about 16% of the Arctic’s remaining undiscovered oil and gas resources. A further 1/3 of the Arctic area is comprised of offshore continental shelves, which are thought to contain enormous amounts of resources but remain largely unexplored by geologists.
The remaining 1/3 of the Arctic is deep ocean waters measuring thousands of feet in depth.
The Arctic circle is about the same geographic size as the African continent─about 6% of Earth’s surface area─yet it holds an estimated 22% of Earth’s oil and natural gas resources. This paints a target on the Arctic for exploration and development, especially with shorter seasons of ice coverage improving ocean access.
Thawing Ice Cover: Improved Ocean Access, New Trading Routes
As Arctic ice melts, sea routes will stay navigable for longer periods, which could drastically change international trade and shipping. September ice coverage has decreased by more than 25% since 1979, although the area within the Arctic Circle is still almost entirely covered with ice from November to July.
|Northern Sea Route||4,740 Nautical Miles||6 weeks of open waters|
|Transpolar Sea Route||4,179 Nautical Miles||2 weeks of open waters|
|Northwest Passage||5,225 Nautical Miles||Periodically ice-free|
|Arctic Bridge||3,600 Nautical Miles||Ice-free|
Typically shipping to Japan from Rotterdam would use the Suez Canal and take about 30 days, whereas a route from New York would use the Panama Canal and take about 25 days.
But if the Europe-Asia trip used the Northern Sea Route along the northern coast of Russia, the trip would last 18 days and the distance would shrink from ~11,500 nautical miles to ~6,900 nautical miles. For the U.S.-Asia trip through the Northwest Passage, it would take 21 days, rather than 25.
Control of these routes could bring significant advantages to countries and corporations looking for a competitive edge.
Competing Interests: Arctic Neighbors
Eight countries lay claim to land that lies within the Arctic Circle: Canada, Denmark (through its administration of Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States.
There is no consistent agreement among these nations regarding the claims to oil and gas beneath the Arctic Ocean seafloor. However, the United Nations Convention on the Law of the Sea provides each country an exclusive economic zone extending 200 miles out from its shoreline and up to 350 miles, under certain geological conditions.
Uncertain geology and politics has led to overlapping territorial disputes over how each nation defines and maps its claims based on the edge of continental margins. For example, Russia claims that their continental margin follows the Lomonosov Ridge all the way to the North Pole. In another, both the U.S. and Canada claim a portion of the Beaufort Sea, which is thought to contain significant oil and natural gas resources.
To Develop or Not to Develop
Just because the resources are there does not mean humans have to exploit them, especially given oil’s environmental impacts. Canada’s federal government has already returned security deposits that oil majors had paid to drill in Canadian Arctic waters, which are currently off limits until at least 2021.
In total, the Government of Canada returned US$327 million worth of security deposits, or 25% of the money oil companies pledged to spend on exploration in the Beaufort Sea. In addition, Goldman Sachs announced that it would not finance any projects in the U.S.’s Arctic National Wildlife Refuge.
The retreat of Western economic interests in the Arctic may leave the region to Russia and China, countries with less strict environmental regulations.
Russia has launched an ambitious plan to remilitarize the Arctic. Specifically, Russia is searching for evidence to prove its territorial claims to additional portions of the Arctic, so that it can move its Arctic borderline — which currently measures over 14,000 miles in length — further north.
In a changing Arctic, this potentially resource-rich region could become another venue for geopolitical tensions, again testing whether humans can be proper stewards of the natural world.
Battery Megafactory Forecast: 400% Increase in Capacity to 1 TWh by 2028
In just a decade, there will be the equivalent lithium-ion battery production capacity of 22 Tesla Gigafactories, with most of that being in China.
Battery Megafactory Forecast
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
When ground broke on the massive Tesla Gigafactory in Nevada in 2014, the world marveled at the project’s audacity, size, and scope.
At the time, it was touted that the cutting-edge facility would be the largest building in the world by footprint, and that the Gigafactory would single-handedly be capable of doubling the world’s lithium-ion battery production capacity.
What many did not realize, however, is that although as ambitious and as forward-looking as the project sounded, the Gigafactory was just the start of a trend towards scale in the battery making space. While Tesla’s facility was the most publicized, it would ultimately be one of many massive factories in the global pipeline.
Today’s data comes to us from Benchmark Mineral Intelligence, and it forecasts that we will see a 399% increase in lithium-ion battery production capacity over the next decade – enough to pass the impressive 1 TWh milestone.
Here is a more detailed projection of how things will shape up in the coming decade:
|Region||Capacity (GWh, 2018)||Capacity (GWh, 2023)||Capacity (GWh, 2028)|
|Asia (excl China)||45.5||78.5||111.5|
In just a decade, lithium-ion battery megafactories around the world will have a combined production capacity equivalent to 22 Tesla Gigafactories!
The majority of this capacity will be located in China, which is projected to have 57% of the global total.
The Top Plants Globally
According to Benchmark, the top 10 megafactories will be combining for 299 GWh of capacity in 2023, which will be equal to almost half of the global production total.
Here are the top 10 plants, sorted by projected capacity:
|Rank||Megafactory||Owner||Country||Forecasted capacity by 2023 (GWh)|
|#1||CATL||Contemporary Amperex Technology Co Ltd||China||50|
|#2||Tesla Gigafactory 1||Tesla Inc / Panasonic Corp (25%)||US||50|
|#3||Nanjing LG Chem New Energy Battery Co., Ltd.||LG Chem||China||35|
|#4||Nanjing LG Chem New Energy Battery Co., Ltd. Plant 2||LG Chem||China||28|
|#5||Samsung SDI Xian||Samsung SDI||China||25|
|#6||Funeng Technology||Funeng Technology (Ganzhou)||China||25|
|#7||BYD , Qinghai||BYD Co Ltd||China||24|
|#8||LG Chem Wroclaw Energy Sp. z o.o.||LG Chem||Poland||22|
|#9||Samsung SDI Korea||Samsung SDI||Korea||20|
|#10||Lishen||TianJin Lishen Battery Joint-Stock CO.,LTD||China||20|
Of the top 10 megafactory plants in 2023, the majority will be located in China – meanwhile, the U.S. (Tesla Gigafactory), South Korea (Samsung), and Poland (LG Chem) will be home to the rest.
Reaching economies of scale in lithium-ion battery production will be a significant step in decreasing the overall cost of electric vehicles, which are expected to surpass traditional vehicles in market share by 2038.
The Safest Source of Energy Will Surprise You
The empirical data on which energy source has led to the fewest human deaths may not be the one you expect.
The World’s Safest Source of Energy Will Surprise You
When it comes to conversations on energy, it’s hard to leave your feelings at the door.
It’s arguable that energy is the single most important driver of human progress – it’s a multi-trillion dollar industry that powers our daily lives, technological advancements, and even the economic development of entire countries. At the same time, our choices around energy can have significant consequences. How we decide to generate energy can decimate the environment, fuel political conflicts, and even cause human deaths as unwelcome side effects.
The outcomes from our choices around energy are so vivid, that we’ve developed strong and polarized associations with the subject at hand.
The Empirical Perspective
Today’s visualization on the safest sources of energy comes to us from Cambridge House, the company hosting the International Mining Investment Conference 2018 on May 15-16 in Vancouver, BC, and it uses an empirical approach to compare different energy sources with one another.
Based on the data, this comparison provides a perspective that will be surprising to many viewers. Despite its perceived dangers, nuclear is actually the safest type of energy.
|Energy Source||Deaths per 1,000 TWh||% of Global Primary Energy Supply (2015)|
That’s right – even when including seemingly catastrophic incidents such as Chernobyl and Fukushima in the calculations, the math says that the amount of energy generated by nuclear is so vast that it more than outweighs these incidents over the long-term.
The reality is that nuclear energy is much more comparable to renewables like solar or wind, in terms of safety. More importantly, it’s on the polar opposite of the spectrum from coal, which manages to kill 4,400 people daily in China alone.
The Nuclear Option
Interestingly, multiple studies have come to this exact same conclusion, including the ones used in an analysis by economist Max Roser’s project called Our World in Data.
Even though the conclusion on nuclear is pretty cut and dry, it’s still hard to absorb. After all, the relative safety of nuclear ends up being extremely counter-intuitive to our human brains, which are seemingly wired to put more weight on big, memorable events (i.e. Chernobyl) rather than slow, consistent deaths that occur over time with other energy sources.
Today, nuclear provides about 11% of the world’s electricity from about 450 power reactors, generating about 2,500 TWh of electricity each year.
And while there are still questions that remain – specifically revolving around how to store certain types of nuclear waste – the above data explains why the majority of scientists classify nuclear as a sustainable and safe energy source, along with other renewables.
This post originally appeared on Visual Capitalist’s new VC Metals channel, home to data-driven visual content on metals, commodities, and energy.
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