Receding ice may uncover Arctic riches

By Juha Mäkinen
     
      Mother Nature arranged an usual show on the coast of Northwest Greenland in early August. An island of ice nearly 200 metres thick, and covering 250 square metres broke off, and is now moving slowly toward the North Atlantic.
      The chunk is the biggest iceberg seen in the Northern Hemisphere in nearly 50 years. It is larger than the city of Vantaa (240 square kilometres). Researchers warn against blaming it exclusively on climate change, as icebergs form quite naturally in places where ice flows into the sea.
      In any case, the climate in polar regions is warming more quickly than the global average, and Arctic nature is facing changes. The northern ice cover is becoming smaller and thinner. It is estimated that the Arctic Ocean will lose its icecap completely during summertime by the end of the century at the latest, and possibly as early as the 2030s.
      Therefore, it may be that 20 years from now it will be possible to travel to the North Pole by ship. This is certainly a dazzling thought. Already now Russia has organised luxury cruises to the North Pole in its nuclear-powered icebreakers, but the next generation will be able to reach the top of the world in their pleasure boats.
     
However, Arctic tourism is small change compared to what the opening of the sea channels could mean for world trade. The Northeast Passage, which runs along Russia’s north coast, and the Northwest Passage, that runs through Canada’s Arctic archipelago, would shorten the sea journey from Asia to Europe and to the East coast of to the east coast of North America by as much as a third.
      Even if the ice were to recede, politics could limit the traffic. Russia keeps its eye on transport on the Northeast Passage, and charges for passage, and for icebreaker services. Canada has declared that the Northwest Passage is its internal territorial waters, over which states have greater jurisdiction than external territorial waters.
     
The north is also tantalising because of its rich natural resources. More than a quarter of the world’s catches of fish come from Arctic waters. An estimated 20-30 per cent of the world’s untapped natural gas resources and 5-13 per cent of its oil resources are in the Arctic region.
      What a treasure trove for energy companies - and what a nightmare scenario for the environment!
      Experts have warned that fighting oil spills in Arctic conditions is many times more difficult than in warm areas. There was a potentially dangerous situation in July when two Russian oil tankers collided in the Northeast Passage. Fortunately the collision was so small that no oil was spilled into the sea.
     
What about Finland? Prime Minister Mari Kiviniemi (Centre) recently raised the development of the Arctic as a key phenomenon of world politics from Finland’s point of view.
      In the Arctic Strategy published by the government in June, Finland is characterised as having top expertise in matters related to the Arctic. Finland would need to be able to sell this know-how in order to get a piece of the pie when activities in the area increase.
      Already before taking up the post of Prime Minister, Kiviniemi spoke of the opportunities of the region in the Barents Forum. She criticised Finnish business for not grabbing on to the economic opportunities offered by Murmansk as vigorously as they could.
     
Murmansk is the only harbour in the northwest of Russia that is free of ice throughout the year. Traffic there is expected to grow, if the exploitation of the massive Shtokman gas field begins. Russia has repeatedly postponed decisions on starting the project, and many take a sceptical view of whether or not Finnish companies have any possibilities of benefiting from Shtokman.
      “Finnish politicians have a completely unrealistic view of the opportunities brought by gas and oil fields. The rigs needed by the fields are ordered directly from Asia, and Finns have nothing to send there”, says Erkki Hanhirova, CEO of the crane manufacturer Havator in Tornio.
     
Some nevertheless believe in the possibilities offered by Murmansk. For instance, Wärtsilä opened a service centre for ships last autumn, and the Oulu-based Ecofoster sells environmental technology to industrial plants in the region.
      Cities, regional councils, and institutions of higher education in the north of Finland set up a consulting firm, Barentskeskus Finland in the early part of the summer, which is to have two employees, one of whom is to be stationed in Rovaniemi, and the other in Murmansk.
     
According to Timo Rautajoki, managing director of the Chamber of Commerce of Finnish Lapland, one reason for setting up the company was disappointment at the indolence exhibited by the export promotion organisation Finpro. In late 2008 Finpro said that it was setting up an export centre in Murmansk, but this later dwindled to being a mere branch office. According to Finpro’s Matti Rasimus, the approach was changed after Russia postponed its decision on Shtokman.
      Rautajoki, for his part, believes that regardless of what happens with Shtokman there would be work on offer in the Murmansk region, especially in the building of infrastructure.
     
The projects mentioned above mainly involve work for landlubbers. But what about sailing in the Arctic Ocean?
      Great opportunities are seen at least by Mikko Niini, CEO of Aker Arctic, which operates in Vuosaari in Helsinki. The company designs ships that are both freight vessels and icebreakers. These dual purpose ships move forward in ice stern first, and some already operate in the Barents Sea.
     
Niini notes that the Arctic Ocean does not have to melt completely for the sea routes to be navigable - the most important change is already in the fact that the thick ice that is built up over many years is replaced by weaker annual ice.
      “This means that gradually it will be possible to navigate with the same kind of equipment as in the Baltic.”
      Niini criticises Finland’s Arctic strategy for its excessive focus on foreign policy. He would like the government to show some Arctic business strategy.
     
The emphasis in the Finnish strategy is on foreign relations. The emphasis is that the Arctic Council should be the primary forum when making decisions on matters related to the region. The council, which was set up in 1996, is a cooperative body of eight Arctic states.
      The problem with the Arctic Council is that it lacks a mandate to make legally binding agreements, and moves are planned to change this.
      “A small country has significantly more influence if decision-making takes place in a binding fashion within the framework of an international organisation”, observes Minister for Foreign Affairs Alexander Stubb (Nat. Coalition Party). “I do not want the Arctic Council to become an organisation comparable to the EU, but certainly it should become a stronger organisation with a permanent secretariat.”
     
To advance these goals, Stubb proposes holding an Arctic summit in Rovaniemi in 2011. This would mean that powerful figures, such as Presidents Obama and Medvedev would come to the north of Finland to hold talks.
      Finland has its reasons to emphasise the role of the Arctic Council. Canada has already invited the five countries with Arctic shoreline - Canada, Russia, the United States, Denmark, and Norway - to hold talks about their demands concerning the continental shelf. Finland, Sweden, and Iceland have been left outside these negotiations.
     
Finland was once a coastal state of the Arctic Ocean, but Petsamo was ceded to the Soviet Union in 1944. It would be wonderful if we had a port on the Arctic Ocean, but the loss of Petsamo can also be seen as a blessing: at least we do not have to be party to any territorial disputes in the ocean.
      Norway and Russia finally managed to reach agreement on their maritime border, after more than 40 years of wrangling. Canada has its own border disagreements with both the United States and Denmark.
     
Some kind of strategy would probably be needed for the protection of Arctic nature, as oil drilling and freight transport increases in the Arctic Ocean. What will happen to the polar bears when the ice melts? How will overfishing be prevented? What kinds of assurances can there be that the oil disaster in the Gulf of Mexico will not be repeated in the Arctic Ocean?
      In April WWF published a report on questions concerning the administration of the Arctic Ocean. One of the writers of the report was Professor Timo Koivurova of the Arctic Centre of the University of Lapland. In his view, sustainable development of the area will be successful if the number of members of the Arctic Council is increased from the present level.
      “Arctic states must remember that the Arctic Ocean is not their back yard. International maritime law already guarantees the commercial fleets and fishing fleets of all countries in the world access to the area. It would be sensible to get them to commit to a treaty concerning the Arctic region.”
     
Helsingin Sanomat / First published in print 22.8.2010


Previously in HS International Edition:
  Finland and Sweden miffed at being excluded from Arctic meeting (31.3.2010)
  Finland wants stronger role in Arctic region (29.4.2009)
  Oil Tanker Maestra cuts backward course through solid ice (25.3.2003)

Links:
  Arctic Council
  Barents Euro-Arctic Council