By Ruari McCallion THE price of oil stands at record highs and, if predictions from some quarters turn out to be correct, the world could be looking facing up to a price of up to US$200 a barrel in the near distant future. In such a world, where a lack of supply is forcing the oil majors to seek and extract newly discovered deposits of black gold, it's no wonder that when an opportunity that could result in a find equal to no less than 25 percent of the world's entire oil reserves has got the industry excited. The Northwest Passage, up on the Arctic's continental shelf, may be just what the oil world has been waiting for. The trouble is no one is entirely certain who has the right to drill there, but that has not prevented some of the world's leading nations staking their claims. This inhospitable place has emerged as one of the world's greatest opportunities, yet it has been born out of our, some would argue, destruction of the global climate. Our thirst for oil has, many now accept, contributed to climate change. This, in turn, has resulted in a warming of the planet and, if the doomsayers are to be believed, the beginning of the destruction of the polar ice caps. And as the arctic melts the possibility of finding huge amounts of oil has got nations such as America, Russia, Canada, Denmark and Norway fighting for their share. Some, like Russia, claim whatever lies beneath the Northwest Passage, to be entirely their property, hence the planting by a Russian submarine of titanium flag on the sea bed last summer. Other's like the less world dominant powers of Denmark and Norway are willing to share what's on offer. That is, of course, if, and it's still and `if', these oil reserves are as great as geologist predict and are actually accessible. Shift in balance of power The battle for the Northwest Passage is shaping up to be a Cold Cold War indeed, and, for the victors, whether an individual nation or international collaboration, the spoils will be significant and lucrative. One certainty already known is that if the Northwest Passage delivers on expectations then the dominance of the Middle East and the OPEC member nations on the world's oil supplies will be over and we're set for a transformational shift in the balance of power when it comes to energy supply. Such are the possible riches awaiting a victor there has even been talk of America testing military systems designed specifically for Arctic warfare. These are merely rumours but few international exploration and geo-political experts would be surprised by anything when it comes to the ambition of nations to secure a world dominating oil supply. Dr Craig Lowrey is with the leading energy consultancy The Energy Information Centre (EIC). Who does he believe will win what many feel could be the biggest battle for oil ever seen? "I suppose a lot boils down to on what perspective one has on international law," says Lowrey. "As I understand it, the US, Russia, Canada, Norway and Denmark can all make a claim on the reserves if they can prove their continental shelves link to the Arctic. "From an operational and technical standpoint, the nation best placed to develop the area is Russia as it has the best level of experience of working in the permafrost of Siberia. But the new technology is coming from the States and Europe so this suggests there will end up being a more collaborative approach." 12-year wait The five nations with a claim on the reserves have all agreed to abide by United Legislation on the issue, although the US is still to sign the documents which will commit it to the final decision, not due from the UN until 2020. In other words, we've got around 12 years of haggling and positioning before we know who the victors will be. However, others, too, believe a collaborative approach with some kind of profit sharing agreements and reinvestment into the environment is the most likely outcome. Jason Ambrose is based in Canada and is the managing director of Palantir Solutions, an advisor to the oil industry. "There has to be a collaborative approach," says Ambrose. "There's been a great many claims and counter claims but the funds and expertise required to make a success in the region demand a joint approach. Russia may well be at the forefront of things but it's unlikely they will be alone." As for how much time will pass before oil actually starts bubbling to the surface, then the experts do have somewhat different views. Lowrey believes the region will not witness any significant product until between 2040 and 2050. Ambrose, on the other hand, thinks some fifteen more years is a more realistic target. As for Dr Pierre NoÎl, a research associate at the University of Cambridge's Judge Business School and a senior policy fellow at the European Council on Foreign Relations, believes if no oil start making its way through the pipes until 2050 then it'll be far too late. "Frankly, a 2050 product is a very minor product," he says. "The world would have moved on from its addiction to oil by then." Of course, the precise timing of any oil extraction, depends on the weather. For those, and there are still some around, who do not believe the ice caps will melt, then this entire Battle of the Arctic is a pointless exercise. And what if the predictions on global warming are right but its extent inaccurate? Will the ice caps melt enough to make extraction possible? There are many variables that could seal the fate of the Northwest Passage. Few, if any know exactly how the battle will play out and resolve itself. But, until the UN decides who has a right to drill in the region in 2020 we're set for a dozen years of argument. By then of course, even if the Arctic has melted away, we might not have a need for oil as we drive our electric cars and rely on renewable energy. A week is a long time in politics and the next 12 years is going to appear like an ice age in the world of geo-politics.