Agenda cuts Europe Off From All Russian Arctic Resources And Concentrates On Asian Customers
The Russian government has approved a new development plan for the Arctic Northern Sea Route (NSR) to be effective from now until 2035. And with about 1.8 trillion rubles (US$29 billion) allocated for the development of the NSR, according to the press service of the Russian Cabinet of Ministers.
The main goals of the plan are to ensure reliable and safe transportation of goods and goods for people living in the Russian Far North. As well as to create conditions for the implementation of investment projects in the Russian Arctic.
The plan includes more than 150 events: the construction of the Utrenny terminal for liquefied natural gas and gas condensate, the Bay Sever oil loading terminal, and the Yenisei coal terminal. In addition, it is also planned to build onshore and hydraulic structures to supply the Baimskoye field, create marine transshipment complexes for liquefied natural gas in the Kamchatka Territory and the Murmansk Region, and a hub port for organizing transit traffic in Vladivostok.
It is also planned to build a transport and logistics hub in the seaport of Korsakov on Sakhalin. Develop the Murmansk and Arkhangelsk transport hubs. And to build bunkering and maintenance bases in the Far Eastern ports of Tiksi and Dikson.
The Cabinet of Ministers also allocated part of the funds for the creation of ships of the icebreaker fleet (including the lead icebreaker of the Leader project), as well as the development of Arctic shipbuilding and ship repair production facilities. plans to improve the infrastructure of the Northern Sea Route in accordance with the Russian Maritime Doctrine, which was also approved last week.
The NSR is viewed as a main artery of the Russian Arctic. It has three main tasks, to:
- Become an energy superhighway for export of hydrocarbons and other natural resources of the Russian Arctic;
- Supply everything needed to the ports and new “points of economic growth” of the Arctic Zone of the Russian Federation (AZRF);
- Assure smooth international transit.
The plan of practical measures to develop the NSR infrastructure up to 2035, also provides for:
- Renovation of ports;
- Building of SAR (search & rescue) and auxiliary fleet;
- Expansion of navigational and hydrographic surveys;
- Building new icebreakers;
- Stimulating cargo shipments and international transit;
- Boosting local energy supply, staff education, encouraging domestic shipbuilding and assuring environmental safety.
The development of the shortest sea route between the European, Western part of Russia and the Russian Far East will be able to reorient traffic flows to Asia. This will allow not only to intensify the transportation of energy carriers and cargoes, but also to develop the Arctic cruise tourism that is gaining momentum among Asian tourists. None of the new plans intend to provide Russian routes through to Europe, Canada, or the United States, effectively leaving the resources in the Russian Arctic for Asian customers. We provide Russian expert commentary on the plans as follows:
Association of Partners for Coordinating the Use of the Northern Sea Route
Vladimir Kharlov, vice president of the Association of Partners for Coordinating the Use of the Northern Sea Route, has stated “I outline the main directions that will remove obstacles to the effective development of the NSR, primarily its eastern part, which experts call an ‘infrastructural desert.’ This is where the main investments are needed. The cargo fleet operating on the NSR and nearby rivers is old, the development of the port infrastructure of the NSR requires serious reconstruction and modernization at the ports of Dikson and Tiksi. Among other areas that should reduce the risks of using the NSR to a minimum are the creation of a stable communication system, improving the safety of navigation and the emergency rescue system in the Arctic. There is a lot of work to be done: there is not much time left until 2035 to solve the main problems of the NSR”
Project Office for the Development of the Arctic
Nikolai Doronin, Chairman of the Board of the Project Office for the Development of the Arctic, has commented “Now the NSR operates only in an unbalanced mode, being mainly the export of products of large businesses and the northern delivery. For small and medium-sized businesses, the NSR is inconvenient due to the lack of a ’flat tariff’, meaning the cost of transportation for group cargo varies very much depending on the season. With the adoption of the NSR development plan, these problems will remain in the past. The main thing is that the government’s plan confirms the previously chosen course for the development of the Arctic zone, described in the development strategy of the Arctic Zone of the Russian Federation until 2035. A return to Arctic oblivion, as it was in the 1990’s, is not expected.”
Center for Arctic Studies at the Institute of Europe of the Russian Academy of Sciences
Diana Timoshenko, senior fellow at the Center for Arctic Studies at the Institute of Europe of the Russian Academy of Sciences, adds that, despite the fact that the transport industry has been actively developing over the past decade, there is no need to talk about the accelerated pace of operation of the NSR.
According to her estimates, a moderate, cautious, but directed development is expected in the near future. This is due to the lack of the necessary basic trading system for the transportation of goods, logistics and cargo turnover along the NSR, which could be relied upon to significantly increase these turnovers; there is also no single operator.
Timoshenko said “At the same time, the competitiveness of the system will also be determined by both effective planning and uninterrupted delivery, the introduction of control and support systems (including those based on Industry 4.0 technologies), ensuring the safety of cargo, and ease of use of the electronic trading platform for customers from Russia and abroad (foreign languages, ease of site navigation, security of electronic payments, and on. The new Maritime Doctrine, adopted on July 31, 2022, refers to the introduction of a Russian-only satellite communication and broadcasting system (named ‘Express-RV’) to create a single information space for supporting maritime activities. This will give a good incentive to operate the NSR and mark a new stage of development in the Arctic.”
Legal Issues
Russian Senator Olga Epifanova has stated that it will be necessary to adopt a law on northern delivery using icebreaker ships along the Northern Sea Route. On the part of the population of the Arctic regions, there are many problems in this direction. The legal status of the NSR and the specifics of navigation along it are regulated not by a single, but by a whole range of regulatory legal acts.
Epifanova said that “Attempts to develop a single law on the NSR have been made repeatedly, but all of them were rejected for various reasons. However, in my opinion, the totality of public relations regarding the Northern Sea Route should be determined by a single document. It is necessary to legislatively emphasize the national status of the Northern Sea Route, its strategic importance. This is especially important today.”
Logistics Issues
Last year’s logistical crisis in Pevek, when several dozen ships stood in the Arctic ice, became a trigger for improving the management of the Northern Sea Route. Without a systematic approach, it will be difficult to achieve the goal of 80 million tons of cargo traffic along the Northern Sea Route in 2024.
“Today, one of the main problems in the development of the NSR is its small depth – up to 12.5 m on the route between the Arctic islands,” Elena Kudryashova, rector of the Lomonosov Northern (Arctic) Federal University (NAFU), has said. “Modern tankers and lighter carriers have a draft significantly exceeding 12 m. In this sense, the most problematic sections of the NSR are the Sannikov Strait and the area around the Bear Islands. At the same time, ships with a significant draft can use routes passing at higher latitudes north of the New Siberian Islands. However, from a navigational point of view, these routes have been little studied and require additional hydrographic studies.”
Navigational Issues
Alexander Makarov, director of the Arctic and Antarctic Institute, follows up by saying “With the increase in cargo traffic on the Northern Sea Route, the role of hydrometeorological support for safe and efficient navigation is noticeably increasing. Climate change in the Arctic is happening three times faster than anywhere else on the planet. But the feeling that warmer weather will make it easier for ships to navigate the Arctic seas is misleading. On the contrary, the situation is becoming less predictable, and the number of dangerous ice phenomena is increasing. For example, in contrast to previous years, the last two years for navigation in the Arctic seas have been quite difficult. In addition to safety, the importance of the efficiency of postings is growing – the same route can be passed by a ship with more and less energy consumption, and the final cost of cargo transportation depends on this.”
Increasing NSR Traffic Volumes
The planned volumes of cargo traffic along the NSR, previously agreed as attainable targets, also take into account the intensive development of Arctic deposits. It is expected that minerals will become the main base for the NSR. The international situation and the sanctions policy of Western countries against Russia make it necessary to increase trade with other regions, including Asian countries, meaning goods delivery will now use alternative routes. An increase in cargo traffic is inevitable, although it is still difficult to predict in specific numbers. The modern icebreaking and transport fleet under construction today only strengthens the case for increased volumes of traffic along the NSR.
Igor Pavlovsky, head of the Information and Analytical Center of the Project Office for the Development of the Arctic said that “An efficient transport corridor allows cargo to be transported without “adventures”: the danger of ice formation and ice escort. We must be aware that the Northern Sea Route will not be such a trade route in the near foreseeable future. The only thing that can allow it to compete with other major trade routes is the blocking of either the Strait of Malacca or the Suez Canal.” Neither is predicted yet, so the Northern Sea Route can be used to meet domestic Russian needs. The government’s order demonstrates this quite clearly. This is not expected to develop as an international transport corridor except maybe to the East.”
Cargo is growing at a rapid pace
Vera Smorchkova, professor of the Department of Labor and Social Policy, IGSU RANEPA, notices that the cargo turnover of the Northern Sea Route is growing at a rapid pace from year to year. If this trend continues, then some experts predict an excess of the planned volumes – 80 million tons by 2024. She said “The Northern Sea Route faces a number of difficulties, primarily seasonal, since most of the time of the year it is covered with ice. In this regard, active work is underway on the construction and use of icebreakers. Russia is actively assisted by China, which is also interested in the development of the NSR.”
Elena Egorycheva, from the Faculty of Economics of the RUDN University is more upbeat about the potential for a European strategy, saying that the NSR “Will allow Russia to transport our goods to Europe not through the Indian Ocean, but by the shortest, cheapest and safest route.”
Alternative Comparisons
Despite the huge difficulties concerning the development of the NSR, its development and efficiency remains valid, and it is becoming an important transport artery. Although during the USSR, the cargo turnover was a little more than 7 million tons, this has already been surpassed to reach 35 million tons. There will be further growth, primarily due to an increase in the transportation of energy resources. The NSR may well become the leading trade route in Russia. However, it remains relatively small in terms of comparisons – the Suez Canal cargo turnover in 2021 was about 2 billion tons. An updated plan come 2035 however may show greater potential once the existing new plan has been implemented.
This article was adapted from a piece published in Russian by the Izvestia newspaper. The original Russian version may be viewed here.