Over the Top: the Emergence of Arctic Ocean Trade

The view of the world from the North Pole is not a common perspective. Most of us may only recognize it from the white-on-blue flag of the United Nations. However, this view of the world may become increasingly common as climate change opens new opportunities for Arctic trade routes. Scientists predict ice-free summers in the Arctic Ocean by the end of the decade and navigable winters by the mid-21st century. Regardless of how one may feel about environmental politics, the question of the polar caps melting is not one of “if” but “when.” The opening of these trade routes is of particular interest to certain actors and nations and has the potential to change the face of global trade.

Polar Routes

The Polar Paths for Shipping (via The Globe and Mail)

A dream of the 17th century explorer Henry Hudson, the fabled Northwest Passage over Canada was first navigated in 1906 by the Norwegian Roald Engelbregt Gravning Amundsen. The other Arctic Sea route, the Northeast Passage over Russia’s northern coast, more commonly called the Northern Sea Route (NSR), is a Russian-legislated shipping lane. The Russian Federation has already started developing infrastructure to service the NSR. Between 2009-2013 maritime traffic has improved from a handful of vessels to several hundred per year. While most are vessels conducting research, several trade voyages have been made. Thus far, Norway and Russia have been the primary navigators. However, in the past few years, Chinese shipping giant COSCO has turned its eyes northward. This past fall, COSCO’s Yong Sheng became the first container-transporting vessel to make a journey from Dailan to Rotterdam via the NSR. Huigen Yang, Director General of the Polar Research Institute of China, announced in 2013 that as much as fifteen percent of China’s maritime trade may travel via the NSR by 2020.

Most data estimates suggest that roughly 90% of mercantile trade is maritime. For China, the potential of Arctic routes could represent savings in the magnitude of hundreds of billions of dollars. According to Qi Shaobin, a professor at Dalian Maritime University: “Once the new passage is opened, it will change the market pattern of the global shipping industry because it will shorten the maritime distance significantly among the Chinese, European and North American markets.” Moreover, China’s traditional route to European ports passes through pirate-infested waters that the Arctic Route would bypass.

There is an undeniable economic advantage to Arctic Trade Routes that connect China to both Europe and the East Coast of the United States. Currently, the typical shipping time from Shanghai to Rotterdam is 25 days, Shanghai to Los Angeles is 13 days, and Los Angeles to New York is seven days by rail. Rotterdam to New York is another nine-day sail. However, a Northern Sea Route to Rotterdam from Shanghai would shorten the journey to 10 days, making a sail from Shanghai to New York via Rotterdam last only 19 days. Without any time lost with stopovers and putting cargo on rails, the current route to New York from Shanghai is twenty days, an Arctic route would be nineteen days at most.

Northern Sea Route vs Southern Sea Route

A visual comparison of the NSR (Blue) to the Suez Route (Red). The Northern Sea Route is 40%, or 12-15 days shorter than the traditional Suez route (Wikimedia Commons)

Commercial traffic over the Arctic would most profoundly affect the maritime route through the Suez Canal. Ports along the Suez route would see reduced cargo traffic from China to Europe. Singapore, one of the busiest ports along the route, has already signaled its awareness of this threat by applying for permanent observer status in the Arctic Council, a regional governance institution. Singapore isn’t the only observer nation that seems out of place in Arctic Council. China, France, Germany, India, South Korea, Italy, Japan, Netherlands, Poland, and the United Kingdom – many of the world’s largest economies – are also permanent observers.

As the Arctic’s pristine environment becomes accessible, commercial shipping is not the only encroaching human activity. Reduced sea ice is making an estimated 30% of the world’s natural gas and 15% of the world’s oil accessible. The combined potentials of Arctic shipping and resource extraction may tilt the scale in favor of developing economic infrastructure over environmental preservation in the Arctic. Professor Lassi Heininen, an expert in Arctic issues at the University of Lapland, describes this problem as a paradox by which less sea ice means better access and thus more human activities, which leads to less ice. Professor Heininen stressed the question: “Are we willing to lose the Arctic’s beauty, or do we try to keep it for our grandchildren?”

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“Are we willing to lose the Arctic’s beauty, or do we try to keep it for our grandchildren?” A baby Polar Bear at Ranua wildlife park in Finland. June 2012 (Photo by the author)

The Arctic region is governed by a combination of international agreements including the UN Convention on the Law of the Seas (UNCLOS) and multilateral governance institutions such as the International Maritime Organization (IMO), a UN agency, and The Arctic Council (AC). The AC is comprised of the eight nations that intersect the Arctic Circle: the United States, Canada, Russia, Norway, Finland, Iceland, Sweden, and the Kingdom of Denmark (by virtue of Greenland). In recent years, the AC has passed agreements on search and rescue protocols and the IMO is finalizing a shipping ‘Polar Code‘ that is expected to be codified by 2016.

Infrastructure is still the key obstacle to the expansion of trans-Arctic trade. There are few ports in the Arctic and they are critically underdeveloped. Missing too are extensive maritime charts as well as search and rescue capabilities. While the AC has passed a search and rescue agreement for cooperation between Arctic States, investment in these capabilities remains minimal. Icebreakers are expensive and the largest fleets number in the tens. Additionally, maritime laws and insurance standards in the draft of the IMO’s Polar Code need to be finalized before any substantial shipping would occur.

Thus far, Russia has been the only player to make significant commitments to development by reopening dormant research stations and Arctic ports. Canada has done little aside from accepting a legal framework for multilateral cooperation on paper. Notwithstanding, there has been an increase in maritime activity through Canada’s Arctic waters:

trans

Recorded Northwest Passage Transits 1903-2013 (via Globe and Mail)

Gustaf Lind, the Swedish ambassador to the AC, accepted the possibility of Arctic Ocean trade. But, he noted: “I don’t think we will see much shipping for quite some time.” Mike Keenan, an economist at the Port of Los Angeles, explained: “You need long stretches that are regularly free of sea-ice and right now you don’t have that.” With regard to how a port can respond to the dramatic effects of climate change, Keenan continued: “there’s a limit to what [the port] can do if you have a serious time advantage…the priority should be to focus on climate change and sea level rise.”

Perhaps it is too early to quantify the effect of Arctic Sea Routes on global shipping trade. Polar Codes and Arctic governance institutions can provide limited solutions to the challenges facing the Arctic, a region on the front line of climate change. What is clear is that climate change will affect more than global weather patterns. It will have an impact on all human activities. Understanding these changes and ensuring that governments address the fundamental problem of a changing environment is ultimately the best way forward.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff and editorial board.

A Response to the Pentagon’s Arctic Strategy

Last month, the Department of Defense (DOD) issued an “Arctic Strategy” white paper along with a positioning statement by Secretary of Defense Chuck Hagel. Major newspapers such as the Wall Street Journal and the New York Times ran stories summarizing the strategy, but the authors of this response feel that those analyses lacked context and stake. The Pentagon release on an Arctic strategy is not a hot news item, and the terms “Arctic security” do not figure much in public discourse. Arctic security encompasses the international agreements for search and rescue, environmental and ecological security, international agreements on border delimitation, Arctic military capability, as well as the economics resource extraction and the potential for trans-Arctic maritime trade. While a good start, the policy paper produced by the Pentagon is lacking substance. The authors of this piece seek to apply our diversity of knowledge studying Arctic politics – in the field – to provide context and recommendations in response to the Department of Defense. While we will discuss the politics of political and military security, the other issues of ecological security and Arctic governance will be addressed in kind.

International Security Cooperation Forum Proposal:

Although the Pentagon emphasizes the need for greater international cooperation as a way to prevent the Arctic from becoming a militarized zone, it falls short in identifying effective means of multilateral security cooperation. The Pentagon’s Arctic strategy document supports cooperative efforts via the Arctic Council as well as regional military training exercises as ways to maintain peace. However, there still does not exist a multilateral forum for the five Arctic littoral states to discuss hard security issues. The Arctic Council is prohibited from engaging in security discussions, and Arctic nations seem reticent to mention these sensitive issues. Given the fact that each littoral Arctic state is gradually increasing its military presence in the region, it is crucial for the U.S. to engage Arctic nations on hard security issues to prevent a conflagration that could result in an arms race – one the public would likely not notice. Although conversations on hard security issues have occurred bilaterally, it is time to discuss these issues multilaterally. A potential forum could be a recurring Arctic security summit where both civilian and military representatives from each Arctic state meet to discuss the role of each nations’ military in the Arctic. This summit would be a step toward preserving the Arctic as a peaceful zone through meaningful dialogue and addressing the sensitive issues head-on. Without an honest and recurring dialogue on both hard and soft security issues, the possibility of the Arctic becoming further militarized would increase dramatically.

The Arctic, a region that has only recently seen a spike in interest and development, requires fresh governing structures. The proposed security summit and other potential means of hard security cooperation could serve as models for existing international security governance structures that do not function as effectively. In this regard, the Arctic represents an opportunity for the international community to explore more effective and transparent ways to conduct international security cooperation.

UNCLOS and Arctic Governance

The decision by the US Congress to postpone, delay, and ignore the UN Convention on the Law of the Seas (UNCLOS) is beyond counterproductive. UNCLOS is de facto law in the Arctic Ocean since the US is the only state in the region that has yet to ratify the law. Ratifying UNCLOS will allow the US to make larger maritime claims in the Arctic. It will also allow the US to contest and petition Article 76, which allows nations to extend their maritime borders on the basis of how far their continental shelf extends. The Russian Federation currently has an outlying claim that would extend their claims as far as the North Pole. Considering an estimated 15% of the world’s oil and 30% of the world’s natural gas is in the Arctic region, it would be wise for the US to join other states in signing on to this international law. Furthermore, the potential opening of the Northern sea route to shipping means that the designation of Exclusive Economic Zones (EEZs) now has expanded political-economic significance.

Arctic Claims

This map shows current borders in the Arctic as well as claims made by Russia. Recently, Canada made claims that extend as far as the North Pole. Map by Ahnode (Own work) [Public domain], via Wikimedia Commons

Ecological Security and why it should matter to the Pentagon:

In the twentieth century, global air temperatures rose an average 1-2°C. This is nothing compared to the Arctic where temperatures rose 5°C. This comparison illustrates the importance of the Arctic environment as a climate change barometer. In 2012, scientists measured a 97% surface melt of Greenland’s ice sheet. This exceeded most accepted models and scientists are re-evaluating at what point in this century we may expect no summer Arctic ice. The questions of whether we will witness the disappearance of the polar caps is not one of ‘if,’ but ‘when.’ Since Arctic ecosystems are impacted more rapidly by climate change, understanding these changes is crucial to managing the effects on the world’s interdependent ecosystems. While climate change might not affect the DoDs daily operations, a dialogue between scientific research and political-military objectives should inform the overall strategy. The Arctic Council is an institution that already seeks to bring dialogue to the vast array of information, scientific or otherwise, relevant to the Arctic region and climate change discussions in general. Heightened dialogue between the Department of State and the Arctic Council would be a good place to start.

Need for Investment in Arctic Capabilities:

Although the Pentagon states its intention of increasing its presence in the Arctic, it also makes clear that the current fiscal environment may stunt further investment. Not asserting American interests would be a mistake insofar as an image of disinterest will be perceived as American weakness in the Arctic. Indeed, other Arctic nations already perceive a strong US disinterest in the region. The lack of an American presence in the region would also prevent US military and law enforcement entities such as the Navy and Coast Guard from protecting the integrity of territorial claims, carrying out search and rescue missions, executing law enforcement functions, and responding to environmental disasters. As of now, the US lacks sufficient dedicated Arctic resources for security and humanitarian purposes. While other US military equipment, such as nuclear submarines and aircraft carriers, have the capability of traversing the Arctic, the US does not have Arctic-specific resources to effectively respond to a disaster or other threats.For example, the US possesses only 5 icebreakers in its fleet and has had to lease icebreakers from Russia and Sweden in the past.This small number of icebreakers stands in stark contrast to Russia’s 37 vessels. Even small Sweden outdoes the US with 7 icebreakers. Due to climate change, the region will likely see increases in resource extraction, shipping, fishing, and tourism. This increase in activity in the Arctic would likely be accompanied by an increase in emergency situations. The US currently lacks effective Arctic capabilities severely limiting the ability to respond to emergency situations or security threats.

In order to mitigate these threats and to enhance US military and rescue personnel in the region, the US needs to invest more in developing Arctic-specific technology and infrastructure. For starters, the US should build a dedicated Arctic icebreaker fleet to better navigate the frigid terrain. Additionally, the US should explore the option of pursuing joint search and rescue exercises with all of the littoral Arctic states, especially Russia. These search and rescue and/or environmental disaster relief exercises would not be as controversial as conventional military exercises and would allow each nation’s military/law enforcement services to become more familiar with one another. Actively working to break the divisions of yesterday by building collaborative relationships today could ameliorate the potential for conflict in the Arctic.

Concluding Remarks:

The US is faced with the enormous challenge of increasing its Arctic presence while convincing other Arctic states that its intentions are peaceful. The US cannot afford to see the Arctic escalate into a zone of conflict and thus must handle this situation very delicately. The DoD’s Arctic strategy is a welcome policy document to a country that has historically lacked a significant interest in the region when compared to the other littoral Arctic states. However, the Pentagon’s strategy needs to incorporate more pragmatic and effective means of international cooperation to accomplish its objectives. In addition, the current fiscal environment should not influence the US’ ability to help secure and develop a region that will likely see a heavy increase in activity due to climate change. Both US military and civilian units need to invest more resources into developing superior Arctic capabilities to better respond to disasters while protecting American interests in a region that is growing in significance and accessibility.

In the 19th century, the established nations of Europe met in Berlin to carve up Africa with the intent of extracting from it resources and riches upon which empires were built. The social, political, and human costs of this are still being felt today. In the 21st century, the established nations of the Europe, Asia, and North America are prepared to, and in certain instances already have, descended upon the Arctic for similar motivations: resource wealth, trade, and power. It would be foolish to think that because Arctic states are politically stable or economically developed that somehow this translates into regional stability. If history is any indication of what is to come, we should actually be all the more alarmed that “established” states are scrambling for the Arctic. Granted, the “Scramble for Africa” involved a large landmass and the intent of colonizing large populations, thus the forthcoming “Scramble for the Arctic” will not be a carbon copy of the past. In sum, there is an opportunity for the Arctic to be used to and for the benefit of all nations, and this begins with a sustainable governance regime.