Tensions in the Arctic: Greenland issues sharp rebuke to Trump-linked oil company
A Texas oil company that wants to extract what could amount to billions of barrels of oil from East Greenland's Arctic basin has crossed a red line before even starting to drill.
In a statement issued on July 30, Greenland's mineral resources authority said it had become aware that Greenland Energy – a Texas oil company founded last year – had transferred drilling equipment ashore on a remote stretch of the island's eastern coast.
“All future logistical matters must be advised and approved by the mineral resources authority – before they are carried out,” the government said.
Greenland Energy has claimed that $1 trillion in crude oil may lie beneath the Jameson Land region. The firm thus announced plans to spend $60 million drilling two exploratory wells to find out.
Greenland Energy's chairman and a significant shareholder, Larry Swets, "appears to enjoy access to Trump's circle", The Guardian reported. Swets has said the oil project is “not related to American annexation”. Carol Craig, a US navy veteran involved with Trump's Golden Dome missile-defence plan for Greenland, reportedly sits on the company's board.
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“The exploration for oil by Greenland Energy is relatively unproblematic,” said Lukas Wahden, an associate fellow of the Russia programme at George Washington University, in an interview on FRANCE 24. “The issue that caused political controversy last week is that the US company Greenland Energy didn't coordinate with the relevant Greenlandic authorities in its disembarking of equipment for the exploration that is planned in East Greenland.”
The move by the US firm “stepped on a number of toes” given the delicate political context, according to Wahden. Trump flummoxed his NATO allies in January when he announced he must “have” Greenland – even by force, if necessary.
He also threatened tariffs against European countries opposing his conquest of the mineral-rich Arctic territory, an autonomous territory of NATO ally Denmark.
The shock announcement triggered the biggest crisis in transatlantic relations in decades. European NATO members deployed troops in Greenland for a military exercise designed to show the world – and the United States – that they were prepared to defend Danish sovereignty.
To defuse the crisis, Denmark, Greenland and the United States established a working group early this year to find a framework for the future of Greenlandic and US relations.
Greenland's authorities must now “walk a tightrope”, said Wahden. The main question is whether the behaviour of a private US company will be raised within the negotiation group, “about which we know relatively little”.
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Delicate diplomatic context
If Trump sides with Greenland Energy, it would disrupt “this very sensitive and very important diplomatic process and undermine some of the gains that the Greenlandic authorities in particular have been making in trying to stabilise the relations with the United States over the last couple of months”, said the expert.
At the height of the transatlantic crisis he sparked in January, Trump suddenly pivoted from military intervention to a NATO-brokered compromise.
The US president announced after a meeting with NATO Secretary-General Mark Rutte in Davos that he had found “a solution” to Greenland, adding that he was rescinding the tariffs scheduled to go into effect in February.
But Trump's appetite for Greenland has not subsided after the dramatic climbdown in January, said Mikaa Blugeon-Mered, a Greenland specialist, on FRANCE 24.
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He cited the US president's July interview with the right-wing Real America's Voice News host Steve Gruber, during which the president predicted that Greenland would come under US control before the end of his presidential term.
For Blugeon-Mered, the unauthorised movement of equipment by Greenland Energy, which stopped short of actual drilling, could lead to a stand-off between Trump and Greenland's authorities.
“If Greenland doesn't give the company permission to drill between now and October, the question that will arise is whether or not Trump [will] send in the army or employ security methods that will allow this company – with collaborators close to him – to go forward,” said Blugeon-Mered.
For the moment, the power struggle remains between the US firm and Greenland's government. “We have a company that claims to be ready [to drill] after engaging costs and transferring its material. On the other hand, we have a government that responds by saying, 'You don't have authorisation to launch the drilling.'”
“It's a free-for-all situation with political, economic and technical implications,” said Blugeon-Mered.