the 5 most important races for the Arctic
Illustration by Ninna Thorarinsdottir for POLITICO
In the 19th century, Europe’s great powers carved up the global map according to age-old rules of sovereignty: The first person to plant the flag controlled the resources — as long as they could defend them.
That era might seem long gone. But as polar ice melts at unprecedented speed in the Arctic, the world’s biggest players are eyeing the region as a new “no man’s land” that is up for grabs.
The changing landscape — and seascape — has ignited a scramble to unlock new economic opportunities and gain the strategic upper hand at the top of the world. “The region has become an arena for power and for competition,” U.S. Secretary of State Mike Pompeo said in a speech in Finland in May.
A month earlier, Russian President Vladimir Putin had told a conference in St. Petersburg that the Arctic accounts for more than 10 percent of all investment in Russia.
POLITICO maps out what’s at stake in the five most important races for the Arctic — and how each could play out.
The race for trading routes
What’s at stake: Humans have traded across the Arctic for centuries, moving goods like furs and meat across the ice and snow. Today, warmer temperatures are destroying many of those old routes, and opening up new, longer-distance, seaways in their stead.
For modern exporters moving goods in bulk from Asia to the West, this means new opportunities.
Forecasts suggest the Arctic Ocean will be ice-free during the summer as early as 2040. Two new shipping routes, the Northern Sea Route, which runs along Russia’s north coast, and the Northwest Passage, which threads through Canada’s northern islands, are already under development.
These shortcuts could reduce the distance between Europe and Asia by up to 40 percent. With 90 percent of world trade being moved by sea, even a limited uptick in their use could have a significant effect on global economics, analysts say.
How things could play out: Experts are divided on the potential for trade along these new routes. They may be shorter, but they can be choked with ice for at least nine months of the year. They also lack basic services, such as search-and-rescue support, along much of their length.
So far, fewer than 100 commercial ships transit along the Northern Sea Route in a year, compared with the nearly 20,000 vessels using Egypt’s Suez Canal, said Malte Humpert, an analyst at the Washington-based think tank the Arctic Institute.
But traffic is increasing. The Chinese shipping company COSCO is planning to increase its use of the Northern Sea Route to deliver cargo to Europe. It is likely to start with a few dozen voyages a year, and ramp up to “maybe 200-300 by the middle of the next decade,” according to Humpert.
Developing the route will create new trading hubs along the Russian coast and breathe new life into Soviet-era backwaters, which were built in a rush and then neglected for decades. Meanwhile, in Iceland, a consortium led by Germany’s Bremenports wants to develop a new hub in the northeastern bay of Finnafjord.
The new routes could also lead to new tensions between the major power players seeking to control them. The United States has slammed claims of sovereignty over the routes from Canada and Russia as “illegitimate” and “illegal.”
The race for supremacy
What’s at stake: During the Cold War, the Arctic acted as a frontier between NATO and the Soviet Union, and was peppered with military bases and expensive hardware.
When hostilities eased after the USSR broke apart, many of these assets were dismantled or allowed to decay. Russia and Norway resolved a long-running maritime border dispute in the Barents Sea in 2010.
Now, relations between the West and Russia have chilled once again, and both sides are edging back toward Cold War footing, just as the barrier of ice that divided them is melting.
How things could play out: Full-blown conflict in the Arctic is still only a remote possibility, analysts say. But the geopolitical contest between old rivals — and new competitors — in the region is unlikely to be smooth sailing.
Russia is building a string of new bases in northern coastal settlements and on several islands, including Kotelny on the East Siberian Sea. Large-scale military exercises by both NATO and Russia are becoming increasingly routine in Arctic areas, and both sides are expanding and updating their icebreaker fleets, seen as key to exerting military influence in Arctic waters.
The Cold War rivals are not the only ones gearing up their defense capabilities in the region. The U.S. Department of Defense has also flagged Chinese activity, including its use of ice-breaking vessels and its civilian research efforts, which, it says, could be used to strengthen Chinese military presence in the Arctic Ocean.
“China is attempting to gain a role in the Arctic in ways that may undermine international rules and norms, and there is a risk that its predatory economic behavior globally may be repeated in the Arctic,” according to a U.S. government report published in June.
The race for resources
What’s at stake: Melting glaciers in the Arctic are exposing more land for potential exploitation. Meanwhile, the retreat of sea ice is also making it easier to access offshore resources, from natural gas to fish, and get onshore resources to market.
The resources up for grabs include “13 percent of the world’s undiscovered oil, 30 percent of its undiscovered gas and an abundance of uranium, rare earth minerals, gold and diamonds; fisheries galore,” according to Pompeo.
A landmark U.S. Geological Survey report from 2008 estimated that the Arctic could hold 90 billion barrels of oil, 669 trillion cubic feet of natural gas and 44 billion barrels of natural gas liquids, suggesting the total value of the region’s resource wealth could run into the trillions of dollars.
These figures understandably caught the attention of national governments in the Arctic Circle. Access to these fossil fuels would help diversify energy supply and improve national security by reducing reliance on imports from potential global trouble spots.
How things could play out: Ironically, oil and mining companies, whose activities have contributed the most to climate change over the years, are set to be among main beneficiaries of a warming world as a new wave of development hits the melting north.
A giant liquefied natural gas project on Russia’s Yamal Peninsula is a prime example of the ramp up. The company that runs it, Yamal LNG extracts, liquefies and ships gas from the South Tambey field, above the Arctic Circle. The plant cost $27 billion to build and rests on 80,000 piles set in the permafrost. Russian Prime Minister Dmitry Medvedev has called it a “significant milestone for the entire Russian gas industry.”
Other high-profile projects include a proposal to mine reserves of uranium and other rare metals at a site in Kvanefjeld in southern Greenland by a Chinese and an Australian company. China wants to be “at the forefront of what could be a revolution in extractive industries on the island,” according to Marc Lanteigne of Norway’s University of Tromso.
Melting ice is also creating new opportunities for the fishing industry, as vessels can move further north in the region for larger amounts of time and follow the changing migratory patterns of some fish species, which are moving north in search of cooler waters.
For a territory like Greenland, which generates around 90 percent of export revenue from fishing, these changes are a potential boon. Alongside traditional cold-water shrimp stocks, fishermen are now also catching bluefin tuna and mackerel.
The race to attract tourists
What’s at stake: As the Arctic ice recedes, the cruise industry is eyeing new, wilder routes. Last year, the MSC Meraviglia, carrying around 6,000 passengers, sailed to the tiny Norwegian Arctic port of Longyearbyen, where it towered over the ferry terminal as visitors streamed into the tiny village.
Offering sightings of the northern lights and authentic interactions with local communities, these megaships are selling an experience made more valuable by the precariousness of the Arctic’s survival and its disappearing glaciers.
But as demand grows, some fear that the industry is unsustainable, warning that it risks destroying small local communities and contributes to the pollution that is accelerating climate change.
How things could play out: An unchecked expansion of cruise liners in traditionally frozen waters could lead to the use of ships ill-equipped for the region’s harsh conditions. “It’s a whole different ball game operating in the Arctic compared with other, let’s say, more pleasant destinations,” said Thomas Ege, a spokesman for Norwegian expedition cruise operator Hurtigruten, which has operated in the area for 125 years.
Hurtigruten is backing a campaign to ban heavy fuel oil — a cheap, dirty fuel widely used in the shipping industry that is much harder to collect in the event of a leak than more expensive lighter fuels — from Arctic waters.
“The sheer scale of what could happen if a megaship with thousands of guests full of heavy fuel oil were to run aground, that’s a picture you don’t even want to consider,” Ege said.
Passenger safety is another major concern. The risk came into sharp focus last year, when the cruise ship Viking Sky lost all power as it sailed south from the Norwegian Arctic town of Tromso.
High seas prevented the use of lifeboats, and disaster was narrowly averted thanks to six helicopters that eventually carried out evacuations. It could have all ended very differently, said Peter Holst-Andersen, the chairman of an Arctic Council working group. If the ship had been further north, “the result would likely have been catastrophic.”
The race to save the Arctic
What’s at stake: The new flurry of activity in the Arctic carries plenty of dangers for the region’s already vulnerable environment. In addition to the risk of oil spills, which are notoriously hard to clean up in cold environments, ships also emit what is known as black carbon, which settles on ice and accelerates its disappearance.
Climate change is also happening faster in the Arctic. The region’s melting ice sheets and glaciers are not just threatening to raise sea levels across the world; they’re destroying the livelihood of local communities and the natural habitats of countless wild species.
The massive cost involved in staving off the worst of climate change, including in the Arctic itself, is also a major barrier to any effort to save it — as are climate-skeptic politicians. When a U.S. government report found that climate change will cost the U.S. hundreds of billions of dollars annually and lead to a host of expensive health issues, President Donald Trump said he didn’t believe it.
How things could play out: In a word, badly. Environmentalist groups say they feel their warnings are not being heeded. “States are not implementing measures to regulate shipping, despite a clear need for better governance and coordination as the effects of climate change make Arctic shipping lanes more accessible,” the World Wildlife Fund said in its review of Arctic states’ environmental protection measures for 2019.
Climate activists are also concerned about the effects of overfishing on the Arctic, with an agreement prohibiting fishing in the high seas of the central Arctic Ocean signed by nine countries — including the U.S., Russia and China — and the EU set to expire in 2034.
The point at which the Arctic as we know it could have been saved may already have passed, say the curators of the Nordic Museum in Stockholm, who set up an exhibit on life in the Arctic inside a giant mock-up of a cracking iceberg. Efforts should focus instead on how to make the best of what comes next.
The roughly 4 million people who live in the region are keenly aware of the need to adapt and have found ways to thrive during times of extreme disruption in the past. “History shows that the people of the Arctic are not afraid of taking on change, they have always been in a changing environment,” said Matti S. Sandin, one of the exhibit’s producers. “A lot of innovation has come from the Arctic.”
What form that change will take is still unclear. But as the ice continues to melt, and global actors race against the clock and against each other to exploit the Arctic, the strategic importance of the region will only intensify. And the outcome will have profound effects far beyond the Arctic Circle.