[LINK] "Greenlanders Vote as Oil Price Slump Kills Independence Dreams"

[rfmcdonald]

Bloomberg's Peter Levring describes how falling oil prices are undermining the economic rationale for Greenland's independence.

Less than half a decade ago, Greenlanders were imagining the riches that would follow an oil bonanza as the price of crude approached $150 a barrel. That wealth was supposed to buy the island independence from Denmark.

Today, with oil trading at less than $75, well below levels that would make exploration off the world’s largest island profitable, Greenlanders are casting their votes for a new home-rule government after the previous administration collapsed amid an expenses scandal.

“People in Greenland always ponder how to achieve economic independence from Denmark,” Ulrik Pram Gad, a post doctoral political scientist at the University of Copenhagen, said in an interview. “People are just realizing that things will take longer; nobody knows how to fund the economy without oil and mining.”

The hyperbole around Greenland’s prospects of becoming a commodities exporting nation that would turn its citizens into millionaires has come and gone in cycles. Explorers approached Greenland after the oil crises of the 1970s, only to abandon the island for three decades. In 2010, Cairn Energy Plc (CNE) returned but didn't make any commercial finds after spending more than $1 billion during two years of drilling.

“It’s safe to say that oil and mineral prices have to rise a lot from the current levels before something happens,” Torben M. Andersen, a professor of economics at the University of Aarhus and head of Greenland’s Economic Council, said in a telephone interview. “Oil exploration could produce a lot of revenue for the Greenlanders, but it’s so far into the future it’ll be dangerous if that promise blocks out other issues.”