Key conclusions
By 2020, cargo transportation capacity along the Northern Sea Route will reach 40 million tonnes
“For the first time in navigation history, large-capacity transportation of oil from the shallow part of the Gulf of Ob has taken place. Achieving year-round delivery was made possible thanks to the construction of six vessels. This year, ice trials were made by the tanker Christophe de Margerie. (In total, 15 ships like this will be built). The Northern Sea Route was traversed by the ship for six and a half days without the help of an icebreaker, and this set a new world record. The record established during Soviet times for cargo transportation along the Northern Sea Route was set in 1989 at 6.2 million tons. This year, Sovcomflot alone has already transported over 12 million tons through the Arctic. By 2022, total capacity will reach 40 million tons taking into account the construction of new LNG production facilities. In 2021, the first ship operating on natural gas, built in the Far East at the Zvezda plant, will be delivered," explained Evgeniy Ambrosov, Senior Executive Vice-President of PAO "Sovcomflot".
Arctic Infrastructure is Developing
"The situation today at Arctic ports is modern; there are excellent housing conditions, the territory is developing <...> Every year there are 2 million tonnes of dry cargo used to build up infrastructure. All global technology is concentrated there. The western part of the Arctic is no worse than Norway. There are difficulties in the eastern part as there are practically no roads there. But it is no longer some "wild beach". Instead, these are modern and equipped shores with infrastructure," said Aleksandr Roslyakov, Chief Executive Officer at Onego Shipping.
Hokkaido will become a gateway to the Northern Sea Route
“The Japanese have two major interests concerning the Northern Sea Route. One is the diversification of the ocean route between Asia and Europe. And the second one is energy development <…> A 40% reduction in the travel distance is very attractive<…> The Hokkaido government now has an original policy for participation in Northern Sea Route development <…> The Hokkaido government wants to be like a gateway to the Northern Sea Route,” said Shinichi Ishii, Senior Consultant at Nomura Research University.
Challenges
Lack of Funds
“For the high investment needs which exist around this area and also in the Arctic areas, we can't use taxpayers' money because there are very, very few taxpayers in the Arctic areas. So that's why we need international public private partnerships and investment funds to come in,” explained Tero Vauraste, Chair of the Arctic Economic Council (AEC).
Bureaucratic barriers
“The main investment in the development of the Arctic is brought by supply vessels which are not that large but are capable of delivering cargo to unfinished ports. There aren't problems on the shipping end; the problems begin on the shore when it comes to getting authorization to unload, etc.," said Vladimir Korchanov, Member of the Executive Board, First Vice President of FESCO.
Solutions
Improving navigation safety
“In particular, an Arctic safety planning system is under development and will be finished by December 2018. One system like this has been tested in the Arctic Ocean. The system can supply the optimal route for the ship in harsh environments,” explained Sang-Hyun Suh, President of Korea Research Institute of Ships & Ocean Engineering (KRISO).
Optimizing communication
“We managed to reduce transportation costs by 40% <...> The main drivers in developing the Arctic are hydrocarbon projects, but the development of information products is very important for small and medium-sized businesses. If there was Internet access in the Arctic, it would be a serious factor in reducing logistics costs,” suggested Dmitry Purim, General Director and Chairman of the Management Board at Sovfracht.
“An Internet cable project connecting Europe and Asia is currently in a stage of high readiness. In 2020 it will provide high quality broadcasts of the Olympic Games in Tokyo. The project is very much dependent upon whether or not it will be possible to attract major players like Facebook, Google, and Chinese communication companies,” said Dmitry Gudimenko, Chief Executive Officer of Capital Development Group.
“We have made an initiation from Finland to build a cable which would link the European areas to the Asian areas… An important area for the work of the Arctic Economic Council is lowering the trade barriers… On the Baltic Sea area we have about 35 icebreakers if you calculate the Russian icebreakers, Finnish icebreakers, and Swedish icebreakers,” explains Tero Vauraste.
Developing Medicine
“People who work in the Arctic are under great stress from geophysical factors. This problem can be solved by large research centers which include doctors, biologists, engineers, and material scientists,” suggested Kirill Golokhvast, Vice Rector for Research of the Far Eastern Federal University (FEFU).
Improving Climate Forecasts
“The average ice thickness decline is already in the order of 13% per decade and that’s something that is very clear <…> We expect in the next 10 years to have a much more pronounced effect of greenhouse gas emission <…> and this will, of course, open up a lot of opportunities <...> I think it's important to improve our numerical prediction of ocean waves, conditions that can also be predicted at a seasonal level,” said Riccardo Valentini, Director of the Impacts Division of Euro-Mediterranean Center on Climate Change.