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The Importance of Fossil Fuel in Economy

Discuss about the Stocks of Greenland Minerals and Fossil Fuels for Development.

The basic idea of development is primarily considered by the availability of resources of a particular country. Mineral resources are seemed to be the essential elements that facilitate the growth and development of industry and economy as well. In this regards, it can be argued that minerals are indispensable to man. The reason behind giving such importance to minerals is because it is genuinely associated with everyday life human life (Helm, 2016). Since the old times the growing demand of minerals ca not be overlooked but use of fossil fuel as an alternative energy was obscure hitherto into the civilised world. With the advent of technology and the rampant booming of industrialisation caused a serious threat to the existence of minerals in Earth (Davies, Wright & Van Alstine, 2017). In this scenario, most of the developed countries are getting busy in pursuit of alternative energy resources. Fossil fuel provides them the perfect item what they need. The recent activities in Greenland have enlisted the country in the top list of the developed countries’ search for alternative energies. Henceforth, this report is going to reflect an appraisal of the current institutional, regulatory and policy frameworks on emerging stocks of minerals and fossil fuel of Greenland. In course of the discussion, the report will also encompass the shortcomings of the current framework and puts some light on the opportunities for improvement in the near future.

The importance of fossil fuel in economy as well as in daily life is that most of the daily commodities are belonged to fossil fuels. Products like fuel, gasoline for vehicles, heating oil and natural gas that can generate electricity are example of fossil fuels (Cheon & Urpelainen, 2018). There is other by products of fossil fuels such as plastics, medicines MRI scanners and computers. In this regards, Greenland is identified as one of the hub of preserving huge amount of fossil fuel. It is in fact, 40% of the electricity in that country is generated from fossil fuel. However, the government is looking for using hydroelectricity as an alternative energy source. The erstwhile discoveries and surveys had opined that the Arctic Circle is highly fertile with mineral resources like Uranium and fossil fuel (Hansen, 2016). As a matter of fact, the growing needs of power sources with the rapid increasing of population pave the way for developed countries to show interests in Greenland. Moreover, the Kvanefjeld mine near Narsaq in the southern Greenland is identified as the second largest uranium mine in the world (Arneborg, 2015). Due to this enormous storage of minerals and fossil fuels Greenland is going to become more valuable to the developed world.

Mineral Resources and Emerging Stocks of Fossil Fuel in Greenland

Empirical evidences showed that due to the adverse impact of global warming it can cause a great threat to the environmental sustainability of Greenland and the Arctic Circle as well. Therefore, the government of Greenland has to put emphasis on the significance of registering a management in order to maintain such issues such as

  • Being good for intended use
  • Posing zero risks to the environmental sustainability
  • Posing no harm to the public health and safety.

It is ostensibly been argued that minerals and fossil fuels are the essential components in order to continue the development of a country. There are other factors as well that are taking part in the developing process. In this regards, the environmental sustainability is considered to be highly important for keeping the Earth safe and sound (Abas, Kalair & Khan, 2015). Besides this, the health and safety issues regarding the people and the workers working in mines and ancillary sectors are also been keeping under strong surveillance. 

The present case scenario of Greenland is highly lucrative for the international companies of petroleum and minerals to invest in Greenland. According to the United States geological survey (USGS) more than a fifth of the Earth’s undiscovered oil and gas resources lie in the north of the Polar circle and amidst of it Greenland has been identified as the most promising location to operate (Pittock, 2017). In this regards, the Greenlandic region oil reserves can be estimated at an amount of 52 billion in waters, 17 billion in the west coast and 31.4 billion in the North East (Grydehøj, 2018). In this context, with the enormous reserve of it creates job opportunities for the citizens of Greenland. It can be argued that the Country is primarily relied upon fisheries. In addition to this, there are some agricultural occupations that help the people of Greenland to sustain their life.

Ecosystem service analysis is defined as a technical framework that emphasises on a set of strategically targeted ecosystem components and depended upon the biophysical and geographic factors that can influence the ecosystem service. In this regards the ecosystem service analysis incorporate different kinds of elements such as hydrology, land use and climate change in order to maintain the ecosystem (Andersen, 2015).

 The report provides a clear depiction of a scientific ecosystem service analysis that can be utilised in mining and drilling process of Greenlandic regions. In this context, the framework encompasses six different but inter-connected steps in the name of preliminary work, rapid appraisal, plausible alternative state, method selection, data acquisition and analysis and communication (Bugenhoudt, 2017).

Ecosystem Service Analysis Framework for Mining and Drilling Process

Eosystem service analysis

Figure 1: Ecosystem service analysis

(Bugenhoudt, 2017)

In course of conducting the preliminary work the local policies and stakeholders can be identified as determinant factors. It can be argued that the stakeholders or the decision makers must procure their activities on the basis of economic, ecological, social and cultural characteristics of the region.

Subsequently, it requires an appraisal. It can be stated that the appraisal should be rapid and effective in response; otherwise it can be fatal for all the stakeholders related to mining and drilling of minerals and fossil fuel. The importance of creating an appraisal is to understand the habitats, changing factors of the driving forces especially in land use, the service provided by the site and its long term benefits.

Moreover, it needs a third step to be intervened in the form of plausible alternative states. This step is comprised with information and collected knowledge which are derived from the earlier two steps. In fact, the significance of plausible alternative states is referred as a conversion, intensive use and restoration of degraded site. In this context, the step symbolises the potentiality of the site and its future relevance to create an impact on the economic progress of the region.

In course of conducting the ecosystem analysis framework, it is imperative to incorporate the method selection. As a matter of fact, it cannot be overestimated by saying that the whole framework is depended upon the method selection process. Selecting inadequate and irrelevant method is detrimental for the analysis. The method includes primary data collection through field surveys and interview sessions. Moreover, the date, time, resource and expertise are also associated with this step to foster efficiency and effectiveness in the process of analysis.

The fifth step is defined as the process of data acquisition. In this step, data can be incurred from the current and alternative state of the site. In addition to this, the final step is regarded as the analysis and communication. It can be argued that the data obtained from the previous steps can compare with the current and alternative status of the project. The service delivery and benefits in distribution are further facilitates support in the ecosystem analysis framework.

This framework is directly represents the paradigm of Toolkit for Ecosystem Service Site-based Assessment (TESSA) which is primarily significant in the mining and drilling process (Bugenhoudt, 2017). In addition to this, the framework also reflects relevance in the mining sector of Greenland. The purpose of TESSA is related to the change in the environmental and human systems. As a matter of fact, minimizing the fatalistic impact and the responses of the society and the government in combating with the escalating issue are also incorporated in to the framework of TESSA. In this regards, it can be asserted that the framework is responsible for establishing a relation between the state and the detrimental impact of the practise on behalf of the corporate organisations. Indeed, the TESSA framework connotes the nature-embedded notion for conducting business and mining in the mining and petroleum sector.

Regulatory Framework for Mining and Oil and Gas Sectors in Greenland

The mining and oil and gas sector in Greenland is comprised with a series of private ownership. It is because of the country resolves its disputes with the Danish jurisdiction and got the right of decision making in case of its mining plants. As a result of that in the 2009 the Greenland government ended up its disputes with Denmark regarding the ownership an decision making rights for the Greenlandic mining and oil and gas reserves (, 2018).

The Greenland government is very particular in developing a regulatory framework for the companies which are activated in that region. The autonomy over its mineral resources policy from the Danish government through the 2009 referendum leads the country to initiate a number of rules and regulations for the companies (, 2014).

The application procedure and standard terms for mineral licences in Greenland is identified as an unofficial translation and compilation of Application procedures of November 16, 1998. Following the parliamentary elections in 2013, the government of Greenland introduced new taxation model for exploration licences. In this regards, the addendum no.3 is very important to understand the role of the government in continuing the exploration and drilling facilities in the country.

The Addendum puts emphasis on the Standard Terms for Exploration Licences for Minerals in Greenland since 1998. This act is further amended by the new Greenland government and came to know as the Minerals Resources Act in the year 2012. According to this act, it will levy a sales royalty of 2.5% of the value of minerals on behalf of the Greenland government. It also includes other kinds of corporate income tax and corporate dividend tax against the sales royalty that has been paid. Moreover, for the rare earth elements the royalty will be fixed at an amount of 5% (Bureau of Minerals and Petroleum, 2000).

            In addition to this, for field activities in order to conduct field activities in discovering mineral resources in Greenland, the respective companies have to report to the Greenland Home Rule Government’s Bureau of Minerals and Petroleum (BMP). It is in fact a cooperative measure taken by the Geological Survey of Denmark and Greenland (GEUS) and the National Environmental Research Institute (NERI). Moreover, BMP prescribes a number of risk preventing steps that has to be maintained by respective companies while continuing their business in Greenland.

            The measures identified by BMP are

  • Labelling and identifying each fuel container is the primary concern o BMP. Therefore, the companies have to label it properly so that it is easily understandable.
  • Companies are restricted to store a volume of less than 250 litres of fuel.
  • Large fuel stores has to be separated in such a way that no type o fuel can be mixed with others.

The intervention of the corporate companies in Greenland is supposed to be beneficial for the country as per the government has been anticipated. Opening up the minerals and fossil fuel reserves for the multinational oil and gas enterprises can attributes to the environmental degradation of the Greenlandic environment. Furthermore, the increasing trend of global warming can perturb the environmental richness of the nation. According to the Greenpeace Nordic spokesperson Christensen the Greenland government is not in a position to safeguard the environmental sustainability of the country and in fact does not possess the power to stop the increasing mining activities in Greenland (Urry, 2015). Furthermore, the environmental organisations also stated that the growing activities and explorations of the oil and gas companies in Greenland affect the very nature of ecology and issue a serious threat to the ecological diversity.

As a matter of fact, the citizens of Greenland also anticipate some employment opportunities by the coming of the multinational companies in the Greenland market. As because the country is primarily depend on small scale industries so the advent of the corporate organisations helps the country to develop its economy in near future (Lund, 2018). However, in reality, oil and gas sector requires skilled and well trained workers which are absent in Greenland.

Despite of all the threats and shortcoming related to the exploration of minerals and fossil fuels in Greenland, it can be argued that the introduction and appearance of the corporate organisations is considered to be beneficial for the government as well as the economy of Greenland. As the Greenland government anticipates that in the next 15 years the oil and gas industry of Greenland will be able to extract the tax revenues at an amount of 30 billion Danish kroner which is similar to more than $4.4 billion (Lund, 2018). It is also in the government policy making to usher maximise benefits for the Greenland people and make a progress in the economic development.


It is therefore can be concluded that the impact of emerging stocks of minerals and fossil fuels of Greenland can foster economic progress for the nation. The influence of the current institutional, regulatory and policy framework are identified as pivotal characteristic in this regards. However, there are some disputes and drawbacks on behalf of implementing such policy but the Greenland government is trying to combat with those issues. It is also in the government framework to maintain a balanced, sustainable and cost effective mechanism for the benefit of the people and economy of Greenland.


Abas, N., Kalair, A., & Khan, N. (2015). Review of fossil fuels and future energy technologies. Futures, 69, 31-49.

Addendum no. 3 of 1 July 2014 to standard terms for exploration licences for minerals (excluding hydrocarbons) in Greenland. (2014). Retrieved from

Andersen, T. M. (2015). The Greenlandic Economy–Structure and Prospects. Economics Working Papers, 14.

Arneborg, J. (2015). Norse Greenland–research into abandonment. Medieval Archaeology in Scandinavia and Beyond: History, trends, and tomorrow, edited by Mette Svart Kristiansen, Else Roesdahl, James Graham-Campbell. Aarhus: Aarhus Universitetsforlag, 257-271.

Bugenhoudt, C. (2017). Assessment of ecosystem services in mining regions: a case study in cajamarca, peru. Faculty of Bioscience Engineering,  pp.15-22.

Bureau of Minerals and Petroleum. (2000). Rules for field work and reporting regarding mineral resources (excluding hydrocarbons) in Greenland. [online] Available at: [Accessed 17 May 2018].

Cheon, A. H., & Urpelainen, J. D. (2018). Fossil Fuels in the World Economy. In Activism and the Fossil Fuel Industry(Vol. 23, No. 38, pp. 23-38). ROUTLEDGE in association with GSE Research.

Davies, W., Wright, S., & Van Alstine, J. (2017). Framing a'Climate Change Frontier': International News Media Coverage Surrounding Natural Resource Development in Greenland. Environmental Values, 26(4), 481-502. (2018). TERMS AND GUIDELINES FOR MINERALS. [online] Available at: [Accessed 17 May 2018].

Grydehøj, A. (2018). Decolonising the economy in micropolities: rents, government spending and infrastructure development in Kalaallit Nunaat (Greenland). Small States & Territories.

Hansen, A. M. (2016). Offshore oil exploration and impact assessment in Greenland. Northern Public Affairs, 4(2).

Helm, D. (2016). The future of fossil fuels—is it the end?. Oxford Review of Economic Policy, 32(2), 191-205.

Lund, L. (2018). Labor Market and Current Account Equilibria in Greenland. Nationaløkonomisk Tidsskrift, 156(1).

Pittock, A. B. (2017). Climate change: turning up the heat. Routledge.

Urry, J. (2015). Climate change and society. In Why the social sciences matter (pp. 45-59). Palgrave Macmillan, London.

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