Donald Trump has ambitious oil drilling plans for Greenland: Why extraction could be delayed for decades

US President Donald Trump is now talking about plans to carry out “massive exploration” of oil, gas, and minerals in Greenland, but his statement raises many questions, such as the identity of the company that will be doing the exploring, the location and the permission granted for it to do so. On Wednesday, in a Truth Social post, he said that there might be great amounts of easily available oil in Greenland. However, he did not identify specific projects or provide a timeline for the proposed exploration.

This island also holds strategic value for the US and Europe.

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This is coming at a time when the US is trying to ensure the availability of strategic minerals and enhance its presence in the Arctic. Greenland has received much attention internationally due to its rare earths reserves and prospects for offshore hydrocarbons.

Commercial exploitation of such mineral wealth, on the other hand, is fraught with many difficulties.

Greenland’s rare earth minerals offer strategic value, but extraction is complicated

Greenland has deposits of rare earths that can be used in electronics, electric vehicle engines, wind turbine generators, and other high-tech applications. Rare earths have gained increasing importance as governments seek to diversify away from dependence on China in their supply chain.

According to the Geological Survey of Denmark and Greenland, there are many significant rare earth deposits within Greenland. The existence of natural resources alone does not necessarily make an extraction project commercially viable. There are differences in the composition, grade, and processability of different deposits, the Geological Survey says in its studies of Greenland’s rare earth resources.

Mining firms need to determine if the resource is viable to mine, get permissions, raise funds and transport and process it. The isolated nature of Greenland increases the costs of these processes.

In addition to that, there is also a problem with the supply chain. The mineral extracted needs to be processed to separate its components, and this is where China has managed to develop industrial capacity. Setting up mining operations in Greenland will not solve the issue of Western countries’ dependence on Chinese processing.

Washington clearly has an incentive in this: diversification of sources of minerals required for manufacturing, energy technology, and defence. However, this would require progress at several stages of development, rather than simply announcing exploratory missions.

Harsh Arctic conditions and energy policy stand in the way

The Greenland climate and geography make it particularly challenging to extract resources from the land. The presence of ice, extreme weather, poor transportation facilities, and rough terrain can pose challenges in terms of exploration, construction, and moving heavy machinery around. The creation of any new mine will also require significant infrastructural support, such as a harbour, roads, electricity, and processing facilities for the mined materials.

Development of offshore oil and gas fields also involves some additional challenges. Oil exploration in the Arctic region is possible only using specialized equipment that is capable of handling ice and extreme weather.

Another factor in terms of energy politics in Greenland should be mentioned. The territory of Greenland ceased issuing oil and gas exploration licences in 2021 due to environmental and climate reasons. However, previous oil and gas licences issued to investors will not expire, according to Anadolu Agency.

It is important to mention that there is a difference between oil exploration and mineral exploration. In particular, the geological situation for oil and mineral exploration in Greenland is quite different. Thus, a single declaration concerning oil, gas, and minerals does not imply that all these resources are ready for commercialisation.

Investors still have to prove that projects related to these resources satisfy all necessary criteria and costs are justified.

US security agreement does not automatically grant mining rights

It comes after the signing of a September 22 pact among the US, Denmark, and Greenland aimed at enhancing security in the Arctic and North Atlantic regions.

Under the accord, there will be an increase in the US military presence through new defence zones, but this will be in line with maintaining the sovereignty of Denmark and the self-determination rights of the Greenlandic people.

The accord by the White House covers defence cooperation, military access, and investment screening in sensitive areas. It does not, on its face, give the US the blanket right to exploit Greenland’s oil, gas, and mineral resources.

This is a crucial point in the argument regarding the issue of Greenland’s resources. Collaboration in the military field can increase America’s strategic advantage in the Arctic region, but it does not necessarily allow US corporations to exploit mineral reserves and oilfields there.

Greenland continues to be an autonomous region in the Kingdom of Denmark, which controls a wide range of internal affairs.

Consequently, any resource exploitation in this region implies a combination of different factors, including decision-making at the local level, environmental issues, as well as commercial aspects.

Right now, the statement made by Trump only serves as an indication of renewed interest of the US in Greenland’s natural wealth; the actual mining can only start after the implementation of some concrete steps, including exploration work, involvement of some specific companies, permissions from regulators and investments.

Greenland has some resources that might contribute to the diversification of mineral and energy supplies for the West. The possibility of exploiting them will depend on a variety of different factors.