Arctic Economics

Russian oil tankers bump into each other on the Northeast Passage

Two Russian oil tankers transiting the Northeast Passage evidently collided on the night of July 16 near the New Siberian Islands.  No one was hurt, and none of the diesel fuel they carried was spilled: Collision was ’just a situation’.

For more background, see (a) Arctic oil tankers collided and (b) Oil tankers through Northeast Passage.

China's Interest in the Arctic

Linda Jakobson of the Stockholm International Peace Research Institute reports that potential Arctic sea routes to New York and Europe have attracted the attention of the Chinese: China prepares for an ice-free Arctic:

Because China’s economy is reliant on foreign trade, there are substantial commercial implications if shipping routes are shortened during the summer months each year. Nearly half of China’s gross domestic product (GDP) is thought to be dependent on shipping. The trip from Shanghai to Hamburg via the Northern Sea Route—which runs along the north coast of Russia from the Bering Strait in the east to Novaya Zemlya in the west—is 6400 kilometres shorter than the route via the Strait of Malacca and the Suez Canal... Moreover, due to piracy, the cost of insurance for ships travelling via the Gulf of Aden towards the Suez Canal increased more than tenfold between September 2008 and March 2009.

New law to govern Russia's Northern Sea Route

Russia is preparing a new law to regulate activity along its Northern Sea Route.  Here's the report from the Barents Observer: Russia prepares law on Northern Sea Route:

The New U.S. Arctic Policy Directive

On Monday the Bush administration released a 3,800 word document serving as both a Homeland Security and a National Security Presidential Directive on U.S. Arctic Policy: Arctic Region Policy.  This is a statement of executive intent, relevant to the extent that the executive has discretion to take action.  One part is simply a recommendation to the Senate: ratify the Law of the Sea Treaty.

Much of the directive is pretty innocuous: the U.S. is an Arctic nation, the U.S. has security interests in the Arctic, it needs to increase infrastructure and security assets in the region, development should take account of environmental concerns, more scientific research is needed, international cooperation is important.  A few points stand out, although none should be surprising:

Scientific American Polar Coverage

Scientific American has posted several short articles on polar topics on its web site: The Future of the Poles.  A couple have economic content and Arctic implications:

A sober look at the Northern Sea Route

Claes Lykke Ragner of Norway's Fridtjof Nansen Institute has written an excellent, short (8 pages) up to date (2008) status report on Russia's Northern Sea Route:The Northern Sea Route.

The Russian's opened the Northern Sea Route to transits by foreign ships in 1991.  It has not been used much (I'm only pulling his discussion of cargo carrying transits here, not his discussion of local traffic or non-commercial and cruise ship transits):

Russia's Shallow Arctic Seas and Straits

The Northern Sea Route cuts 39% off the shipping distance between Hamburg and Yokohama, but that doesn't help much if you have to make four separate trips to move the same amount of stuff. 

According to researchers at the U.S. Army Corp of Engineers Cold Regions Research & Engineering Laboratory (CRREL, in 1996), depth limitations in important straits and ports limit the size of ships that can use the route to vessels with a cargo capacity 25% of the vessels using more southerly routes.  It would take one of these ships four trips to move the cargo that a larger vessel can move in one trip.

Northern Sea Route prospects

When you look at a globe it's clear that trans-Arctic shipping routes between Europe and Northeast Asia are short compared to alternatives through the Panama and Suez Canals.  But trans-Arctic shipping may not spring into existence as the ice cap shrinks as quickly as some expect. Once you begin looking more carefully at the routes various challenges become clear (Old ice and the Northwest Passage).

The Northern Sea Route runs from the Barents Sea, across Arctic Russia, to the Bering Straits and the Pacific.  But some of the Route's infrastructure has decayed, and trans-Arctic shipping may not be economical on it anyway.

Source: Maritime Market.  The Northern Sea Route expects active maritime traffic

The aging U.S. icebreaker fleet

 

USCGC Healy.  Source: Henry Dick Woods Hole Oceanographic Institution / NSF

The U.S. Coast Guard only has one modern icebreaker - the Healy.  It has two older icebreakers, the Polar Sea and Polar Star, but these have passed their original design lives.  Ronald O'Rourke explores the U.S. options for the Congressional Research Service: Coast Guard Polar Icebreaker Modernization: Background, Issues, and Options for Congress.  A fourth, smaller, icebreaker, the Nathaniel B. Palmer, is leased by the National Science Foundation from a private company. 

How many icebreakers do we need?  Should we fix up the Polar Star and Polar Sea?  Should we replace them?

From the abstract:

Fastest recorded August rate of Arctic ice loss

There's a couple of weeks to go in the melt season, but as a practical matter we're ending up where we were last year: Record ice loss in August.

The Parry Channel, the northern route of the Northwest Passage that really matters for larger vessels, is open for "the second time in recorded history -- and the second year": Northwest Passage northern route opens.

"The shallow-water route is the one that has traditionally seen some activity," Doug Bancroft, director of the federal ice agency, said yesterday. "In 2007, we saw the deeper-water, northern, more direct route [the Parry Channel - Ben] open for navigation by non-icebreaking vessels -- that was for the first time in modern history. We've got no record of it being like that before. And it's opened up again in the same manner … in the summer of 2008."

He said ships in the northern channel will encounter more ice this year than last, but not enough to prevent a safe ["safe" is an important qualifier, its not just open, its safe - Ben] transit through the channel that runs north of Baffin, Somerset, Prince of Wales, Victoria and Banks islands.

Hat tip to Mark Collins (The Torch). 

Edit: fixed title (Fasted to Fastest) September 12.