Melting Arctic ice brings hope to Russian city

Thaw in temperatures brought by climate change could bring benefits for Siberian city of Nadym as global trade patterns shift

by John Vidal

The Observer

The city of Nadym, in the extreme north of Siberia, is one of the Earth’s least hospitable places, shrouded in darkness for half of the year, with temperatures plunging below minus 30 Celsius and the nearby Kara Sea semipermanently frozen.

But things are looking up for this Arctic conurbation halfway between Europe and China. Over the next 30 years climate change is likely to open up a major polar shipping route between the Pacific and Atlantic oceans, cutting travel time to and from Asia by 40 percent and allowing Russia’s vast oil and gas resources to be exported to China, Japan and south Asia much faster.

Nadym stands to benefit from a warmer climate more than any other Arctic city — the Russian government plans to connect it by road and rail to other oil and gas centers; Gazprom, the world’s largest gas company, is building a port nearby with French oil major Total; and if the new northern sea route is open for even six months of the year, Nadym could find itself along the 21st-century equivalent of the legendary silk route.

“The entire center of gravity of the world economy is shifting to Nadym,” Mayor Stanislav Shegurov, a former gas worker, said at a recent meeting of Arctic leaders in Norway.

Expectations are high that the route will complement the Suez Canal as a key waterway for trade to and from Asia.

“The Arctic is our home and our future. We will make full use of the northern sea route. We are building infrastructure, we are making history. We have ambitious plans,” said Anton Vasiliev, Russian ambassador for the Arctic.

Only 71 large ships, working mostly with Russian icebreakers, navigated the route in 2013, but Russia expects a thirtyfold increase in shipping by 2020 and ice-free water over most of its length by 2050.

The summer ice has declined by nearly 50 percent in 40 years and by 2050, say Laurence Smith and Scott Stephenson of the University of California, ordinary vessels should be able to travel easily along the northern sea route and ice-strengthened ships should be able to pass directly over the pole itself.

Confidence that the Arctic will become economically important is seen in the rush of countries and companies to claim a stake. Eleven countries, including Poland and Singapore, have appointed Arctic ambassadors to promote their national interests.

Gazprom last week launched in South Korea the first of four giant “ice-class” natural-gas carriers for the sea route. The Russian government plans to spend more than $3 billion reopening a military base on the Novosibirsk Islands and is building new icebreakers and navigational centers. Oil giants Rosneft and ExxonMobile are planning to start drilling for oil in the Kara Sea this year.

Norway and the other Nordic countries have all made Arctic development a priority.

“The Arctic is changing rapidly. It will be our most important foreign policy area. Climate change is putting Norway under pressure,” Norwegian Prime Minister Erna Solberg said.

Finland, which has no access to the northern sea route, has proposed a railway linking its mines to the Russian coast.

“Finland needs a new Nokia. The Arctic could be it,” said its Arctic affairs ambassador, Hannu Halinen.

American, Canadian, Japanese, South Korean and British companies all intend to use the sea route to mine across the region, but possibly no country hopes to gain more than China, according to Wang Chuanxing, polar researcher at Tongji University, Shanghai.

“China’s economy is 50 percent dependent on trade. The development of the northern sea route would have a major impact on its economy. One-third of China’s trade is with the EU and the U.S. The opening of the northern sea route is vital for China,” he said.

Japan also hopes to benefit.

“Ten percent of the world’s unexploited crude oil and 20 percent of its natural gas is said to be in the Arctic. Recent changes because of climate change are attracting people in Japan. We want to actively participate. We are researching the Arctic sea route,” said Toshio Kunikata, the Japanese ambassador in charge of Arctic affairs.

“A great chess game is being played with countries staking claims to the Arctic to make sure they are not left out. Climate change is taking place at twice the global average speed in the Arctic. Some countries, like China, are looking 50 years ahead,” said Malte Humpert, director of the Washington-based Arctic Institute think tank.

“The polar research institute of China said that Arctic shipping would play a major role in the country’s future trade, and suggested that, by the year 2020, 5 percent to 15 percent of China’s trade value — about $500 billion — could pass through the Arctic. But that may be too hasty. We think the route will mostly benefit China’s trade with Europe, but this is not likely to be because its priority is to build closer ties with Latin America and Africa.

“We think future shipping in the polar region will mostly consist of seasonal activity and transporting the region’s natural resources to markets in East Asia. Climate change will transform the frozen north into a seasonally navigable ocean, but Arctic shipping routes will not become a new silk road for China.”

Norwegian shippers are cautious, too.

“Sailing trans-Arctic from Yokohama to Hamburg would shave 40 percent off the distance compared to the Suez Canal. Yet our own predictions have been modest. In 2013 there were 71 commercial transits through the polar sea, compared with 18,000 and 14,000 through the Suez Canal and the Panama Canal,” said Sturla Henriksen, head of the Norwegian Shipowners’ Association.

“In 30 years, more than two-thirds of the volume of Arctic summer ice has disappeared. Our children will be the first generation in modern history to experience an entirely new ocean opening up. The Arctic has now become a true strategic hot spot at the center of global interest. The high north embodies high stakes. A paradigm shift in international politics is taking place.”