251,287 cables indexed
Reference ID: 07COPENHAGEN1010
Origin: Embassy Copenhagen, Denmark Classification: UNCLASSIFIED//FOUO
Created:07 Nov 2007 Released:26 Aug 2011

This is the cable as released by WikiLeaks. This cable is not redacted.

This cable has been published by Greenpeace (UK).

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E.O. 12958: N/A

Ref: (A) 2004 COPENHAGEN 1835 (B) State 147776

1. (SBU) This cable contains sensitive but unclassified
and proprietary business information. Not for internet

2. (SBU) Summary: Greenland is on a clear track toward
independence, which could come more quickly than most
outside the Kingdom of Denmark realize. By 2009,
Greenlandic and Danish politicians will complete a new
self-rule agreement, the penultimate step toward full
independence. Significant oil, gas, and mineral
resources -- forecast by experts but not yet proven --
could propel the Greenlanders after that to ultimately
sever their formal ties to Denmark.

3. (SBU) With Greenlandic independence glinting on the
horizon, the U.S. has a unique opportunity to shape the
circumstances in which an independent nation may emerge.
We have real security and growing economic interests in
Greenland, for which existing Joint and Permanent
Committee mechanisms (described reftel A) may no longer
be sufficient. American commercial investments, our
continuing strategic military presence, and new high-
level scientific and political interest in Greenland
argue for establishing a small and seasonal American
Presence Post in Greenland's capital as soon as
practicable. End Summary.

High Stakes for the U.S. in Greenland

4. (SBU) With the planet's fastest moving glaciers,
Greenland is an iconic adventure destination for hardy
Congressional delegations and down-encased journalists
looking for visual proof of climate change. Its gleaming
icebergs will be the backdrop for a May 2008 ministerial
hosted by Denmark on Arctic issues (reftel B). But
Greenland holds strategic value for the United States
beyond its starring role in the global narrative of
climate change. The world's largest island, this remote
and sparsely-populated territory of Denmark is three
times the size of Texas but home to just 56,000
inhabitants. A U.S. Air Force base at Thule, 500 miles
north of the Arctic Circle, hosts important radar that
alerts us to incoming missiles over the Pole. American
investors are poised to commit $5 billion this year to
develop hydropower and smelting facilities there.
Exploration and development of Greenland's energy
resources are just now beginning in earnest, with
enormous potential for American industry.

5. (SBU) Thanks to the Joint Committee process launched
with the 2004 Igaliku agreements to expand bilateral
cooperation in non-defense areas, we have reassured
sometimes skeptical Greenlanders of our good will and
interest in partnership. Although part of the Danish
kingdom and traditionally oriented toward Europe,
Greenland nevertheless has a growing appreciation for the
logic of geography and its own potential as part of North
America. Our international visitor invitations, English
teaching programs and joint scientific/environmental
projects have reinforced Greenlandic desires for a closer
relationship with the United States, just as Greenland
assumes ever-greater charge of its international
relations and edges closer to full independence. Our
intensified outreach to the Greenlanders will encourage
them to resist any false choice between the United States
and Europe. It will also strengthen our relationship
with Greenland vis-a-vis the Chinese, who have shown
increasing interest in Greenland's natural resources.

From "Home Rule" to "Self Rule"

COPENHAGEN 00001010 002 OF 004

6. (U) Greenland has been self-administered under a
"home-rule government" since 1979. Greenland's
government and parliament control almost all matters
except defense and certain aspects of foreign policy, law
enforcement, and mineral resources, which currently
remain under the authority of Copenhagen.

7. (U) A "self-rule commission," established in 2004 by
Danish Prime Minister Anders Fogh Rasmussen and Greenland
Home Rule Premier Hans Enoksen, will soon complete a new
self-rule agreement, devolving additional authorities and
autonomy. The new agreement will be submitted to Danish
and Greenlandic parliaments for ratification sometime in
2008. Following ratification and approval by referendum
in Greenland, the new arrangement is expected to enter
into force in 2009 on the 30th anniversary of the
original home-rule agreement.

8. (U) The self-rule agreement will cede to Greenland
additional powers in foreign relations, justice and home
affairs, and is the next-to-last step toward full
Greenlandic independence. The agreement will also hammer
out important economic and financial arrangements
regarding sharing of hydrocarbon and mineral profits,
revenue essential to Greenlandic independence.

Energy-Rich Greenland?

9. (SBU) Negotiations on the division of Greenland's
potential hydrocarbon and mineral wealth proved more
difficult to solve than expected, delaying conclusion of
the self-rule agreement by several months. While
Greenland has long been believed to possess significant
hydrocarbon and mineral stocks, only in the last three to
four years -- with the rise in world oil prices -- have
international investors have begun to seriously explore
Greenland's potential.

10. (U) The Greenland government earlier this year issued
its first licenses for oil and gas exploration off the
western Greenlandic coast, with Chevron and Exxon-Mobil
part of the four-company international consortium that
won the concession. Additional exploration licenses are
expected to be granted later this year.

11. (U) A recent study of hydrocarbon potential, led by
the U.S. Geological Survey, concluded the continental
shelf off northeast Greenland alone could harbor oil and
gas reserves to rival Alaska's North Slope. The USGS
will complete additional studies on similarly promising
areas in northern and western Greenland next year. After
a thousand-year interval of cooling, average temperatures
in Greenland have in this century climbed to the level
they were during the first Viking settlements of 986 AD.
Whether because of man-made climate change or a massive,
cyclical shift in weather patterns, Greenland's carbon
riches are more easily accessible now than ever.

12. (U) Meanwhile, the resource possibilities in
Greenland are not limited to oil and gas. The Greenland
government has issued 68 mineral exploration licenses to
international companies, and expects at least five
significant new mines to open in the next five years,
harvesting everything from diamonds and rubies to
molybdenum and zinc.

13. (U) The upcoming self-rule agreement will effectively
split oil and gas revenue between the Greenlandic and
Danish governments, with the Danish share used to offset
the annual block grant to Greenland. (Greenland depends
on an annual 500 million dollar subsidy, making up about
half of the state budget.) Increased hydrocarbon revenue

COPENHAGEN 00001010 003 OF 004

would eventually eliminate the Danish block grant. After
that payback, all revenue would belong to Greenland.

A Deliberate Approach to Independence

14. (SBU) One senior Greenlandic official commented
recently that his country (Greenlanders and many Danes
alike routinely refer to Greenland as a "country") is
"just one big oil strike away" from economic and
political independence. This remark captures the
sentiments of most Greenlanders, who enthusiastically
support independence but recognize that it may not be
possible until the territory first reaches economic self-
sufficiency. Even the most ardent of Greenlandic
nationalists concede that there is no public appetite for
achieving independence at the cost of eliminating the
generous Danish subsidy that, for now, guarantees the
island's economic viability.

15. (SBU) Denmark's approach to Greenland's aspirations
for ever-greater sovereignty, meanwhile, has been
balanced and largely pragmatic. Most Danish politicians
understand and accept that Greenland is slowly moving
toward independence. Some privately question whether the
Danish public will readily let go of a former colony that
has long since become a part of Danish national identity
and myth. Others would be glad to see an end to the
block grant, funds that would otherwise be spent in
continental Denmark.

16. (SBU) The Danish-Greenlandic relationship, while
complex and sometimes bumpy, rests on a shared assumption
of eventual independence for Greenland. Even as
Greenland's political elites negotiate ever more
autonomy, most Greenlanders, for now, seem satisfied with
seeking independence at a thoughtful and measured pace --
at least until that one big oil strike.

U.S. Engagement with Greenland

17. (SBU) Our growing security and economic interests in
Greenland demand that we work to ensure that eventual
independence has a positive effect on those interests and
on the broader transatlantic relationship. Our radar at
Thule is now being upgraded for use in missile defense,
while the base there also carries out important satellite
command and control functions for the United States.
U.S. trade and investment in Greenland is growing, with a
multi-billion-dollar aluminum smelter and hydroelectric
project planned by Alcoa and new oil and gas exploration
underway by major U.S. firms.

18. (SBU) The Joint Committee process has expanded
cooperation among the U.S., Greenland and Denmark,
transforming U.S. relations with Greenland with an
impressive list of achievements. The Joint Committee has
promoted scientific collaboration, educational and
cultural exchanges, tourism (including a new direct U.S.-
Greenland air link) and direct investment (Alcoa
officials attribute much of their success to the Joint
Committee). Greenlandic officials praise the Joint
Committee process for its concrete results and for
helping to put Greenland "on the map" in Washington.

The Next Step: An American Presence Post

19. (SBU) Despite our success to date, the demands and
stakes of our relationship with Greenland will continue
to grow. With Greenland moving closer toward
independence, the Joint Committee process and our current
level of contact with Greenland officials may simply not

COPENHAGEN 00001010 004 OF 004

be enough. Sustaining and building on our achievements
in Greenland require engagement and outreach that can
only be accomplished in-country, on the ground. We would
like to create a small and seasonal American Presence
Post (APP) in Nuuk, Greenland's capital, as soon as

20. (SBU) Greenlandic officials frequently raise with us
the possibility of an American diplomatic presence and
would enthusiastically welcome such a move, perhaps with
material and logistical support. Foreign representation
remains scant in Greenland, making the impact of a U.S.
office all the greater. We believe that the Danish
government would approve our opening an APP in Greenland,
following appropriate consultations and diplomatic

21. (SBU) An American Presence Post in Greenland would
provide us with the needed diplomatic platform to seek
out new opportunities and advance growing USG interests
in Greenland. Nuuk is Greenland's largest city and the
seat of the government. Nuuk also provides relatively
easy access to Greenland's major air hub in Kangerlussuaq
and from there to Thule Air Base and the town of
Ilulissat, a favorite for the growing number of
Congressional delegations now visiting Greenland. (Summer
2007 saw three separate, large delegations, including one
led by House Speaker Nancy Pelosi).

22. (SBU) We propose to staff an APP office from post's
current complement of American direct-hire officers. We
currently have four Foreign Service officers with some
aspect of relations with Greenland as part of their
portfolio. We would staff an APP office in Nuuk for five
months of the year, beginning in June (for the beginning
of the scientific research and Congressional travel
seasons) and extending through October (which would allow
time for interaction with the Greenlandic parliament,
which usually begins its activities in mid-September).
We would send one Embassy Copenhagen officer to Nuuk for
one-month rotations. Post already maintains an American
Corner in Nuuk, which we could use as an anchor for
representational and cultural programming events. Post
is prepared to submit APP cost estimates for the
Department's review. Costs to be funded by the
Department would include five months of TDY support plus
set-up costs. We would explore with the Greenlandic
government whether they could also contribute office
space or other cost offsets for an APP. Post can also
work with our colleagues in the Embassy's USAF Detachment
1 office (which handles contracting for Thule Air Base),
to leverage their existing resources and infrastructure
in Greenland and minimize costs.

23. (SBU) The time is now to begin investing in a
flexible, low-cost, official U.S. presence in Greenland.
Establishment of an APP in Nuuk would allow us to advance
our strategic and commercial agenda directly and to shape
the image of the U.S. in Greenland as never before. For
now, we can offer Greenland an American perspective.
Down the road, we must be prepared for the day when we
welcome a new and independent neighbor, one that will be
a true partner within the transatlantic community of the
21st century.