Market News

 May 14, 2013
Melting Ice Opens Fight Over Sea Routes for Arctic Debate

 When 16th and 17th century European explorers sailed west in pursuit of a trade route to Asia, their search for a Northwest Passage was foiled by Arctic ice.

Five hundred years later, melting icecaps have set off a global race to control new shipping lanes over the North Pole. Just as the discoveries of Ferdinand Magellan and Vasco de Gama gave seafaring Portugal routes around Cape Horn and the Cape of Good Hope, the opening of the Arctic, with its shortcut from the Atlantic to northeast Asia and its untapped oil reserves, can redraw the geopolitical map and create new power brokers.

When the U.S., Russia and six other major stakeholders of the Arctic Council meet May 15 in the northernmost Swedish city of Kiruna, they'll be joined by nations with observer status, including China and the European Union, that are angling for an elevated status in the diplomatic club and a greater say in the region's future.

New passages linking Asia to America and Europe will be as revolutionary as was the 1869 opening of the Suez Canal, which boosted European trade with Asia by connecting the Mediterranean to the Red Sea and shortening the journey for cargo vessels, according to President Olafur R. Grimsson of Iceland, home to the world's biggest glaciers and a member of the council.

In a visit to Washington last month, Grimsson said his core mission was to "try to wake this town to the fact that the Arctic should be among the top priorities for the U.S. foreign policy in the first half of the 21st century" and no longer relegated to its "backyard."

Frigid Slush

Arctic ice is melting at an accelerating rate. Compared with the average measurements from 1980 to 2000, the area of ice covering the Arctic Ocean, a body of water roughly the size of Russia, had shrunk last summer by half, according to the Arctic Institute, a Washington policy group. The thickness of the remaining ice had dwindled by 80 percent.

The Arctic Ocean may become a frigid slush of fresh and saltwater in the summer within three to five years, according to a White House estimate. An Arctic shipping route or easier access through the Northwest Passage, now open only to heavily fortified ice-breaking ships, would mean shorter and less expensive trips between northeastern Asia and the U.S. East Coast and Europe.

Less ice also may mean easier access to oil and gas under the Arctic Ocean floor, resources the U.S. Geological Survey estimates may be 30 percent of the world's undiscovered natural gas reserves and 13 percent of its undiscovered oil.

This week's conference comes amid signs that greenhouse gases blamed for global warming are accumulating at rates mankind has never experienced. The U.S. National Oceanic and Atmospheric Administration reported on May 10 that the amount of carbon dioxide in the atmosphere exceeded 400 parts per million, a threshold not seen for 3 million years.

Oil-Spill Treaty

The countries that make up the Arctic Council -- Russia, Finland, Denmark, Sweden, Norway, Iceland, the U.S. and Canada - - will sign a treaty on oil-spill preparedness and response, discuss their agenda for the next two years and possibly vote on adding to the roster of permanent observers, which includes Spain, France, Germany, the Netherlands, the U.K. and Poland.

A vote on upgrading China's status would be tied to a larger "question about whether the issues related to the Arctic will be handled by the countries in the region, or whether the Arctic -- because of climate change, global economic potential - - is a global issue," according to Heather Conley, director of the Europe program at the Center for Strategic and International Studies, a Washington policy group.

Obama's Strategy

The ministers also will discuss efforts to deal with the increases in maritime traffic and oil exploration, and to cope with the impact of melting ice on indigenous Arctic communities.

In preparation for the meeting, on May 10 President Barack Obama signed a new "national strategy for the Arctic region" that lists as its first priority advancing U.S. interests -- including the protection of energy interests, maintaining free passage through Arctic seas and building regional infrastructure.

Without a clear budget plan or specific initiatives such as an upgrade to an outdated American fleet of icebreakers, "this strategy becomes nothing more than a lengthy wish list," said Mihaela David, a fellow at the Arctic Institute.

U.S. Disadvantage

The U.S. had been without an Arctic policy since the last year of President George W. Bush's administration, leaving the world's No. 1 economy at a disadvantage, Conley said.

"Our policy isn't keeping pace with the level of change in the Arctic," she said in an interview.

That wasn't always the case. During the Cold War, the Arctic was an arena of military competition between the U.S. and the Soviet Union, according to Ronald O'Rourke, the naval affairs specialist with the nonpartisan Congressional Research Service.

While the U.S. lost interest, Russia remained combative and in 2001 was first to file a claim at the United Nations to extend its sea territory in the Arctic shelf. It drove the point home in 2007. In a stunt reminiscent of Spanish Conquistadors, bearded polar explorer Artur Chilingarov led a submarine expedition to the North Pole and planted a Russian flag on the seabed below the ice.

Under international law, no country owns the North Pole, and the five nations with Arctic coastlines -- Russia, the U.S., Canada, Norway and Denmark -- are limited to their 200-nautical-mile economic zones.

Underwater Treasure

The U.S. is alone in not having ratified the UN Convention on the Law of the Sea, which gives states 10 years from the date of ratification to extend their claims on the continental shelf. Gaining sovereignty to more land that's underwater will give them a jump-start when it comes to exploiting mineral-rich resources below the seabed.

Secretary of State John Kerry, who as a U.S. senator backed the Obama administration's unsuccessful push for climate-change legislation, will reaffirm the U.S. commitment to the Arctic and highlight challenges to the region, particularly from global warming, according to a State Department official who asked not to be identified discussing plans for the talks.

History indicates that climate cycles have far-reaching consequences. The Age of Discovery, which led Christopher Columbus to stumble upon America, happened during the Little Ice Age, when a drop in temperature froze sea routes that had been discovered by the Vikings and wiped out millenia-old Norse settlements in Greenland.

Conflict, Strife

The melting of three ice-covered areas -- the Arctic, Antarctic and the Himalayas -- already is having fundamental consequences for extreme weather patterns, according to Grimsson, who cited the U.S. superstorm Sandy and China's latest winter, which was the coldest in almost three decades.

"When the ice sheet melts away, you are confronted with a whole series of unexpected and far-reaching scenarios that will generate conflict and strife," said Hans Joachim Schellnhuber, a climate scientist and director of the Potsdam Institute for Climate Impact Research. "The unabated rate at which the globe is warming has far-reaching foreign policy implications."