The melting ice in the Arctic is opening a new sea route and enabling exploitation of rich resources in the region, triggering a new Cold War.
At the 11th Polar Law Symposium held in Tromso, Norway, the Norwegian Research Council stressed that the diminishing level of Arctic sea ice hit a record low. Ironically, this dire environmental reality opens up great economic prospects. As global warming leads to the melting of ice packs, parts of the Arctic Ocean are becoming accessible to navigation for the first time. Shipping companies have been investing in vessels that are able to break through thinning polar ice, as the Northern Sea Route is considerably shorter for many trade links between Europe and Asia. For centuries, explorers dreamt of such a route, but the Arctic ice stood in the way. Now that dream has become reality.
Recently, news headlines about the recent standoff between Russia and Ukraine in the Kerch Strait have been dominating public attention, while Russia’s increasing investment in the Arctic is going largely unnoticed. Whereas US President Donald Trump questions the reality of climate change, Russia takes a more pragmatic approach. Because of rising temperatures, the Russian half of the Arctic Circle is becoming accessible to ships much more quickly than the US-Canadian side.
By betting on the diminishing ice sheet, Russia has taken several steps to get ahead of the game in terms of infrastructure and partners. It has commissioned a new generation of icebreakers capable of cutting through 7-foot-thick ice sheets, upgraded its Siberian ports, built a new $27-million facility on the Yamal Peninsula, invested in the biggest Arctic liquefied natural gas (LNG) project and built a railway from the LNG plant to Sabetta Port, which expands Arctic trade to Europe, China and South Korea.
The Arctic is a promising economic region for Russia, and the melting ice has many implications. First, it increases Russia’s access to international trade, which was limited previously by the lack of seaports. Remember, the Great Game was all about Russia’s quest for warm waters, which led to conflict with the British Empire. Second, Russia ensures its national stability by maintaining oil and gas production. With more accessible Arctic seaports, Russia might emerge as a more prosperous and cohesive state.
Third, Russia is determined to look away from the West and toward the East for not only oil and gas sales, but also growing export markets. Fourth, as global warming causes the region’s ice sheets to melt, it will help Russia’s return on the global stage. Fifth, the Arctic opportunity gives Moscow a great chance to even scores with Europe, which has sided with the US in imposing sanctions on Russia. The pipeline projects underway in the Black Sea might find new sources of funding from the Arctic trade, as well as a new immediacy.
The NORTHERN SEA ROUTE
In 2017, a Russian tanker traveled along the Northern Sea Route in record speed, followed this year by a ship making a winter crossing of the Arctic — both without an icebreaker for the first time. Such achievements open up great opportunities for Russia in the East. The Northern Sea Route, which takes 19 days, is some 30% quicker than the conventional southern shipping route through the Suez Canal. The Russian government predicts that cargo along the northern passage will grow tenfold by 2020. The Guardian notes that “climate change, retreating summer ice and the prospect of shorter journey times and 40% lower fuel costs has led Russia, European governments and some industries to expect a major ice-free shipping lane to open above Russia, allowing regular, year-long trade between the Atlantic and Pacific oceans within a few years.”
Russian enthusiasm for exploring this new Arctic passage has been questioned by a report from the Copenhagen Business School (CBS), which states that the Northern Sea Route would only be commercially viable by around 2040. Some scientists push the estimate still further, to 2050. Even then, the CBS stresses, the cost per container would be about 10% higher than going via the Suez Canal.
This assessment has not dampened Vladimir Putin’s ambitions. Recently, the Russian president cited the 18th-century poet and scholar Mikhail Lomonosov’s prediction that Russia would expand through Siberia, declaring: “Now we can safely say that Russia will expand through the Arctic this and next century. This is where the largest mineral reserves are located. This is the site of a future transport artery that I am sure will be very good and efficient: the Northern Sea Route.” Yet despite Putin’s determination, the viability of the Northern Sea Route remains uncertain and its immense environmental costs unclear.
Environmentalists and scientists have expressed concerns over the opening of the Northern Sea Route. No one has any idea about what the exploitation of polar resources and increased shipping traffic in the so-far largely pristine Arctic Ocean could lead to. No environmental risk assessments have been done yet. An oil spill could be disastrous in this fragile ecosystem. Cleaning up and containment would be difficult, if not impossible, due to extreme weather conditions and short winter days, as well as a lack of search and rescue stations. Few remember that only 7% of spilled oil was recovered in the 1989 Exxon Valdez incident around Alaska’s Prince William Sound.
The EU and nine of the world’s major fishing nations announced an agreement to ban fishing in the Arctic Ocean for the next 16 years. While most welcomed this move, environmentalists and scientists raised the alarm on the fragility of polar ecosystems. According to The Independent, “the need to preserve them instead of merely exploiting resources made newly available by melting sea ice” is a higher priority than ever. Yet few point out the irony that “the rapidly warming Arctic seas are being used as a highway for fossil fuel transport.” In the words of Sarah North, senior oil strategist for Greenpeace International, “It’s like a heavy smoker using his tracheotomy to smoke two cigarettes at once.” While climate change is helping to fuel Russia’s moves in the Arctic, Russia’s development of the region will contribute to rising temperatures and accelerate global warming.
The Great Arctic Game
Already, tensions are increasing worldwide. Trade wars are escalating, and so are conflicts. The melting Arctic adds to the explosive cocktail. Russia, China and the US could well find themselves embroiled in another Cold War. These three superpowers have started a race to gain influence and control in the Arctic region. At stake are as much as $35 trillion worth of untapped oil and natural gas, valuable minerals, including gold, silver, diamond, copper, titanium, graphite, uranium and invaluable rare earth elements that could soon be within reach as the ice recedes.
With the largest number of icebreakers and $300 billion in 73 projects either completed, in motion or proposed, Russia is the clear leader in Arctic infrastructure development. In 2017, Rosneft — Russia’s state oil company — marked a breakthrough in the search for hydrocarbons when it found the first oilfield in the Laptev Sea in the eastern Arctic. The company aims to have offshore Arctic oil account for 20-30% of Russian production by 2050.
Research from Yale University in the @nytimes shows that more than two-thirds of Americans oppose drilling in the Arctic National Wildlife Refuge. @SecretaryZinke and the Trump administration are moving full-steam ahead anyway https://t.co/jl1VujiFw8 pic.twitter.com/sTu8rqn1mV
— Sierra Club (@SierraClub) November 2, 2018
The US has entered the Arctic Great Game in earnest. In January this year, the Trump administration opened up nearly all US offshore waters to drilling, including areas on the outer continental shelf that had been blocked by the Obama administration and, more pertinently for the subject of this article, the north shore of Alaska, a part of which is the Arctic National Wildlife Refuge.
As warming global temperatures opens up new sea lanes and economic opportunities, the new kid on the block has also jumped in. China has announced its Polar Silk Road project despite its lack of access to the Arctic. Using its position as an outsider to disputes between Russia, Europe and the US, and relying on its financial might, the Middle Kingdom is securing access to resources it cannot obtain through territorial claims.
Not only is China a stakeholder in the Arctic, it also has growing ambitions for a connected world with this ancient nation as the hub. Tellingly, the Chinese included the Arctic in its $1-trillion Belt and Road global infrastructure initiative. When US sanctions jeopardized the Russian Yamal LNG facility project, China stepped in with $12 billion in financing to finish it. And Beijing is not confining its ambitions to Russia. In November 2017, Chinese companies agreed to develop liquefied natural gas natural gas in Alaska at a whopping cost of $43 billion.
US sanctions, which have prevented Western companies from participating in offshore Arctic projects, have also played into China’s hands. Putin is on record saying that Russia has to reduce its dependence on the US dollar. He has characterized the US sanctions policy as a “colossal strategic mistake” that has served to “undermine confidence in the dollar as a universal … reserve currency today.” In Russia, investors have found creative ways to circumvent US sanctions by switching to euros from dollars in the case of the Yamal LNG project. Yet in today’s world, there is only one economic power that can stand up to the US, and it is none other than China. Russia has agreed to the alternative payment systems of the Belt and Road initiative. This strengthens China’s hand not only in the Arctic, but also globally.
ANOTHER COLD WAR
When economic interests are at stake, military developments often tend to follow. Since 2012, Russia has rapidly developed its military presence in the Arctic, with a focus on air and maritime technologies. Though the Arctic remains a difficult environment to operate in, Russian military presence is growing in the region. This has led to calls for increased Western military presence as a response. Russia has been coming to terms with the loss of its former vassal states since the collapse of the Soviet Union in 1991. Now, melting Arctic ice gives it a rare chance to have military superiority in a strategic theater with valuable sea lanes and rich resources.
Russian Defense Minister Sergey Shoigu has said that resource-rich Arctic regions have become attractive to many nations. Even as the US, Canada, Denmark and Norway try to assert jurisdiction over parts of the Arctic, Russia has warned of military confrontation. In 2014, the new Russian military doctrine added the protection of national interests in the Arctic region.
Historically, the United Nations’ Conventions on the Law of the Sea (UNCLS) has regulated territorial disputes related to the expansion or the challenge of Arctic territorial boundaries quite successfully. In 2007-14, Denmark, Russia and Norway settled disputes and, in 2010, Russia and Norway signed a maritime border agreement. The US has yet to ratify the UNCLS, increasing risk of military confrontation.
The Northern Sea Route passes through Russia’s territorial waters, giving it the authority to set the rules. Recently, Russia changed the requirements for foreign warships navigating through its Arctic regions; they now have to give prior notification to the Russian Defense Ministry. While UNCLS permits the right of innocent passage through territorial waters, the recent standoff between Russia and Ukraine in the Kerch Strait demonstrates the difficulties of applying international law in practice.
The situation in the Arctic differs greatly from the Antarctic. In the Southern Hemisphere, states have rules for cooperation and are members of an international forum. In the Northern Hemisphere, certain states have established sovereignty over parts of the Arctic region. Two of these, Russia and the US, are military giants, with China trying to muscle its way into the action through commercial, scientific and economic activities to legitimize future claims. The stage could be set for a true Cold War that may bring detrimental consequences for international security and cooperation, as well as the environment.
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
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