March 6, 2014

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TSG IntelBrief: Geostrategic Competition in the Arctic: Routes and Resources

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The Age Old Quest

The Northwest Passage has been the dream of mariners, explorers, and merchants for hundreds of years. Until recently, the ice-choked passage had only been forged by a handful of specialized ships, with no commercial viability. Over the past decade, the vision of a shortened passage has begun to become a reality as the effects of climate change have sufficiently lifted the veil of ice and tantalized merchant shipping. In 2013, the Danish-owned MV Nordic Orion, an ice-strengthened bulk carrier, completed the Northwest Passage from Vancouver, Canada to Finland with a load of coal. This voyage was significant: the company stated the passage cut four days transit time off the traditional route through the Panama Canal, and saved an estimated $200,000 in operating costs and canal fees. Additionally, the ship carried 25% more cargo as the Northwest Passage is deeper than the Panama Canal. In January, the ship’s owner, Nordic Bulk Carriers, announced it was planning a following voyage next summer—ice conditions permitting.

The possibility for lucrative commercial transit through the Arctic has the potential to greatly impact the global shipping industry, usher in fierce resource competition, and transform the geopolitical landscape.

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North to the Future?

This voyage and the announced follow-on are only a snapshot of the larger scramble for the Arctic and its natural resources. As merchant ship owners look to both the embryonic Northwest Passage and the already busy Northeast Passage to save time and money, the governments of the Arctic nations (Russia, Canada, Denmark, Norway, Iceland, Sweden, Finland and the US) have all begun to realize the economic and political implications of this long ignored region.

Canada, in particular, has been ambitious in insisting on its sovereignty over the Northwest Passage. Canada frequently runs large-scale military operations in its northernmost corners. In 2009, the Canadian Parliament renamed the Northwest Passage the Canadian Northwest Passage in order to strengthen its claims. While many nations, the US included, view the Northwest Passage as international waters, the Canadians continue to maintain that it is an internal waterway under Canadian control. In conjunction, late in 2013, the Canadian government extended national sovereignty, under the United Nations Maritime Treaty, to hundreds of miles off the continental shelf in the Canadian Arctic archipelago, including the seabed under the North Pole. This announcement brought a quick and sharp response from Vladimir Putin who stated the Russians already had a territorial claim on the North Pole and asked the Russian military to move more assets and infrastructure into the Arctic region.

The Russians are in a better position to capitalize on Arctic claims. They have the world’s largest fleet of icebreakers, four of them nuclear powered, with a fifth under construction, and have been steadily commercializing the less ice-plagued Northeast Passage for the past several years. In 2007, Russia planted a Russian flag on the underwater Lomonosov Ridge mountain range to reinforce its claims to the Arctic continental shelf. Along the same lines, the Russians announced a planned surfacing at the North Pole this year, complete with a flag raising ceremony, by the Smolensk, an Oscar II nuclear submarine using the voyage as a trial run after a period in the yards.

The Canadians, for their part, have proposed a small but vigorous plan to maintain an increased Federal Presence in the Arctic but have been beset by subsequent budgetary problems. A group of small ice-strengthened patrol ships, the Arctic Offshore Patrol Vessels, and support bases have been proposed to maintain a Canadian presence in the Arctic. The first of these vessels has been delayed and a final design has not yet been approved after several years of planning. Only one base is currently operational. The first replacement icebreaker for Canada’s aging fleet has also been delayed and is not anticipated to become operational until 2020. 

All of the Arctic nations, through an international body called the Arctic Council, have agreed to solve problems resulting from sovereignty issues, diplomatically. The possibility of military confrontation between the Council’s members on some barren Arctic stretch is remote at this time. However, the Arctic seabed and both of the passages will very likely become bargaining chips that may be used in conjunction with greater and weightier issues on the global stage. China, which is now heavily dependent on the Indian Ocean and the Suez route for shipping to Europe, estimates that it could save between 60 and 120 billion dollars a year by using the Northeast Passage alone. The Russians require a permit to traverse the Northeast Passage and have had over 400 requests for the upcoming year already. This route could provide the Russians with a great deal of leverage on the international stage over China or any other nation dependent on sea commerce between Asia and Europe. 

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• The Arctic sovereignty issues and the maritime passages will continue to grow steadily in international importance as the drive for resources increases. The region will become a contested issue in the international arena
 
• The US has yet to stake out any major claim to the Arctic. However, in November 2013, the Department of Defense released an overhauled Arctic Strategy, designed to protect American interests as competition for the Arctic heats up
 
• Maritime strategy in the past has been largely based on nine major choke points around the world (Straits of Hormuz, Straits of Malacca, Bab al Mandeb, Panama Canal, Suez Canal, Bosporus Straits, Gibraltar, Cape Horn, and Cape of Good Hope) first articulated by Sir John Fischer in the early 1900s. The Arctic Maritime passages are new additions to that list and will, in time, lessen the importance of some of the traditional ones.

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