Energy innovation, global crises keep investors away from Arctic

Many investment projects in the Arctic region have been postponed and some even turned down in the last years, according to information released at the Arctic Business Forum on Wednesday. The postponement was mainly caused by the ongoing financial crisis, as well as the successful stories of the shale oil and gas development in the United States, said the speakers at the forum, which took place in this capital city of Lapland, northern Finland. The two mentioned factors have influenced the Shtokmanovskoje gas field project in the Barents Sea, for instance, and the project seems to be postponed for decades, said Timo Rautajoki, CEO of Chamber of Commerce in Lapland. Tim Boersma, a research fellow with the U.S. Brookings Institute said that innovators have been able to extract gas and oil from the rock layers in the United States in the past years, and this has a negative impact on the energy projects in the Arctic area. "I think most of these projects will be postponed for, say, 10 to 20 years. Then maybe they will become competitive again, depending on the price development," Boersma told Xinhua. He named the harsh conditions, hard technologies and high cost as the main difficulties in energy production in the Arctic. The crisis in Ukraine has increased tension between concerned parties, said Rautajoki. "The investors expect predictability in business. Right now the future on investments looks fuzzy as predictability has been shortened by both financial and political crises," elaborated Rautajoki. Despite the gloomy prospect, Rautajoki expected that the investment potential of the European High North stands at 144 billion euros (200.16 billion U.S. dollars) by the year 2020. The annual Arctic Business Forum, already on it's fifth, opened on Wednesday and will last for two days. The event gathers hundreds of entrepreneurs, specialists and politicians in Finland and around the world.