Market News

 May 08, 2019
U.S. cold-shoulders Canada as superpowers square off over Arctic riches

 The Trump administration seems to be blowing hot and cold when it comes to the future of the Arctic, uncertain whether the rapidly melting sea ice is an opportunity or a threat --- or if global warming is even behind it.

Mike Pompeo, the U.S. secretary of state, delivered a bunch of mixed messages at a meeting of the eight-nation Arctic Council that wrapped up in Northern Finland this morning.

His 20-minute speech outlining American policy on the Far North touted the region's "opportunity and abundance" for all, going on to make the somewhat confusing claim that the Arctic houses 13 per cent of the world's "undiscovered" oil, and 30 per cent of its yet-to-be found natural gas.

And Pompeo predicted that new lanes across the formerly frozen seas will "become the 21st century Suez and Panama Canals," cutting as many as 20 days off of shipping times between Asia and the West.

But at the same time, he painted a picture of Russian aggression and Chinese opportunism in the Arctic. He then threw Canada under the tundra bus for good measure, lumping Ottawa in with Beijing and Moscow while discussing "illegitimate claims" of national sovereignty in the region.

Trump's own attempts to overturn Obama-era restrictions on oil and gas drilling in the Arctic have been stalled by the courts. And now it seems the White House has begun to worry about what others might have planned for the region.

Vladimir Putin has made the development of Russia's Arctic one of his goals, announcing plans for a major railway expansion and aiming to increase Northern Sea route shipping by 73 million tonnes a year by 2024. Close to 120 "priority" infrastructure and industrial projects have already been identified, and Moscow will soon announce a series of major tax breaks for both domestic and foreign investors.

And last month, Putin travelled to Beijing to try and tap into China's global Belt and Road initiative, proposing that the Arctic sea lane become part of the planned "Maritime Silk Road."

The prospect of the other two superpowers teaming up in the Far North has clearly spooked Washington.

There was already longstanding unease over Russia's military build-up in the region that has seen the construction of 14 new airfields, 16 deepwater ports, and the addition of four Arctic combat teams and more than 40 icebreakers in recent years.

While Russian jamming of GPS satellites during a major NATO exercise in Norway last fall raised concerns that the Kremlin has already achieved a level of strategic control in the region.

Last week, a Pentagon report warned that China might use its own growing fleet of icebreakers and polar research stations as a pretext for Arctic military adventures, potentially deploying nuclear-armed submarines.

At a military forum in Washington yesterday, U.S. Air Force Gen. Terrence O'Shaughnessy, who heads up NORAD, warned that the security of the Far North can no longer be taken for granted. "The Arctic is the first line of defence," he told reporters.

O'Shaughnessy recently delivered that message of a "systematic and methodical increase in threats" to both U.S. and Canadian policy makers. Although there doesn't seem to be much urgency about it in Ottawa, with Liberal MP John McKay, the Canadian co-chair of the Permanent Joint Board on Defence, telling CBC radio last month that the country is "not very well prepared," to deal with the military build-up.

"It's not just simply the presence of significant numbers of troops, but it's also missiles, and ships, and ballistic missiles, and low-altitude cruise missiles," he said.

Canada ranks 14th in the world in military spending, according to a newly published report, at $21.6 billion US a year. It clearly isn't in the same league as the table-topping Americans ($649 billion), second-place Chinese ($250 billion) or even the Russians, who officially spent $61.4 billion on defence, but probably deserve to rank higher than sixth.

But at least Ottawa is willing to openly talk about the "terrifying" underlying reason for the new strategic and economic competition in the Arctic --- global warming.

This morning, the Arctic Council ended without an official joint declaration because Mike Pompeo refused to sign off on any document that contained the words "climate change."

In that, the U.S. secretary of state seems to be out of sync with America's military, which now categorizes the changing weather and mounting temperatures as a threat to national security.

Just yesterday, the U.S. Navy's chief meteorologist, Rear Adm. John Okon, complained that rapidly warming Arctic waters pose a real danger to ships, subs and aircraft in the Far North, because they feed volatile weather.

"We're a hundred years behind understanding the conditions of where we'll have to defend the homeland and our partners," Okon told the same Washington forum, lamenting the lack of Arctic weather stations and sensors. "We're operating in the blind."