The Arctic continues to represent new frontiers for the North American maritime trade, yet these frontiers are also wrought with complexity. Industry in the Arctic involves an intricate web of sentiment, infrastructure, technology, climate change, politics and evolving economic practices.
With industrial demands accelerated by COVID, yet also delayed by the pandemic, the Arctic maritime industry aspires to balance current demands while also checking irresponsible growth.
Industry leaders must take into account multiple considerations into account when reviewing the potential of the emerging Arctic.
For instance, the politics of the Arctic industry are ever-changing. Discussions are as divided as our current national political landscape, with loud voices demanding everything from rampant exploitation to a complete withdrawal.
In the U.S., that interaction is driven most directly by Alaska, although Cara Condit of the U.S. Coast Guard Academy’s Center for Arctic Study & Policy notes interest from northern oceanic states such as Washington and Maine. For many people in the lower 48, however, the emerging Arctic remains more a theory than an actuality, as well as ever-changing.
“It is hard to pin down, where the line between politics and reality ends—because it could always shift, right?,” Condit said.
One of those lines was recently drawn by Shell, when it chose to abandon its multi-billion dollar Arctic exploration for oil and gas. Despite being a politically controversial practice, the decision came down to cost versus benefit. The company has no plans to pursue Arctic oil and gas,” according to a statement from President Marvin Odum.
“Shell will now cease further exploration activity in offshore Alaska for the foreseeable future,” Odum said. “This decision reflects…the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.”
Condit further explains there are three main Arctic areas: the North American Arctic, the Russian Arctic and European Arctic. Development in these areas is often most driven by those who live and work. The differences in stakeholders also explains why some areas have more advanced facilities than others (think Finland vs Northern Alaska). One of the most invested groups in the Arctic across nations is the Inuit Circumpolar Council (ICC) which represents “all Inuit from Alaska, Canada, Greenland, and Chukotka.”
Lisa Koperqualuk, ICC Canada Vice President International, recently addressed the UN Climate Change Conference (COP26) in Glasgow. She said that Arctic shipping is critical infrastructure for Inuit.
“We depend on the Arctic fleet for re-supply, and it is also an integral part of our economies in various parts of the Arctic,” she said. “The Arctic marine environment and our cultural connection with it and the food security it provides are paramount for our communities.”
Infrastructure Needed for Exploration
The International Maritime Organization identifies area challenges that include the added safety features necessary for ships to navigate the region, such as stronger hulls to withstand extreme temperatures.
Other obstacles include the additional susceptibility of the colder polar waters to the effects of pollution and the inability to regulate all area vessels due to the limitations of the Antarctic Treaty System.
In order to ensure ship operability while also protecting both the environment and human life, the organization in 2017 began adhering to the International Code of Safety for Ships in Polar Water, also referred to as the Polar Code, which applies to both polar regions. One of the provisions, called a Polar Certificate, applies to ships. The motivation behind this international certification is that ships must be correctly outfitted for ice travel, and not just any ice. Operators but must designate that their ships can handle ice flows of one-year, two-year and more.
Condit said that there’s some impressive technology such as ice cutter ships. , it’s a big coast. Currently the flagship in the northern coast is the Polar Star—a much lauded Arctic ship, but still, only a single ship. So while there’s technology and Coast Guard support in the area, it’s still a vast region should services be needed for rescue, containment , or cleanup.
”But when it comes down to it, there’s not a lot of shore support there,” Condit said. “There’s not a lot of communication support there. So we are still not progressing [Arctic wide].”
Condit added that even current exploration and use can be fraught with risk, especially from a Coast Guard perspective. “It is hard to figure out where people are and it’s hard to get communications if they get into trouble. And if the weather continues to get more unpredictable and more violent, I don’t look at the numbers, but I would expect the rescue services across the world are going to be getting more calls.”
Port in the Ice Storm
Alaska recognizes the need for Arctic infrastructure, both for existing use and potential future expansion. Jim Jager, who oversees business continuity, external affairs , and facility security for the Port of Alaska, described recent upgrades. Support for the Arctic, he said, starts at a port.
“The Port of Alaska is the main inbound cargo port for the state of Alaska, you know, half of everything that gets shipped into the state crosses here.”
The Port of Alaska in 2020 handled 4.7 million tons of fuel and freight. This fuel and freight is managed through more than “ 25 acres of cargo-handling yard, 3.1 million barrels of liquid fuel storage, 60,000 tons of cement storage and gantry cranes, according to the port.
And while the numbers are impressive, what is perhaps more vital to the emerging Arctic is the upgrades currently happening at the port.
If new infrastructure is built in the U.S. Arctic, it will likely funnel through Anchorage. Jager estimates the port manages about “80% of the cement used in the state,” given how vital it is for the projects needed for both research and industry in the area.
“So, if say Port of Gnome develops a dock, it will probably end up having construction support through Anchorage,” Jager explained. “And some of the materials that will be used will come across our dock and then be barged up.”
Faced with reports that many Alaskan docks could potentially fail within as little as eight years or the next big earthquake, the Port of Alaska Modernization Program seeks to resolve these issues beginning with the new Petroleum and Cement Terminal opening in late 2021. The new docks are designed not simply to withstand a six-foot rise in sea level, but also a difference of 30 feet between high tide and low tide and liquefaction in future earthquakes.
Changing Climate Driving New Innovation
Climate change is absolutely a concern as to what and how the Arctic will emerge. When it comes to driving shipping traffic through Arctic channels, the changing climate presents new risks.
Condit explained that even with melting, “…there is still ice, it’s still moving and it’s become more variable.” She noted that this makes mapping safe shipping routes more difficult because “it’s difficult to know where it’s going to be, because the weather patterns are inconsistent. That makes things riskier for shipping.”
Jager agreed, noting that the climate in the area is not following expected patterns.
“Traditionally everybody has thought of the Arctic as being this extreme weather,” he said. “Well, if you look at what climate change is doing climate change is actually probably flattening variations in the Arctic at the same time. It’s making the variations in … the developed world a lot more extreme.”
The general consensus of Arctic researchers, as shared by NOAA’s National Centers for Environmental Information, currently predict the Arctic will begin to have ice-free summers, in the next 30 years, and possibly as early as 2042.
Addressing this change in ice, oceanic currents and weather systems—largely thought to be driven by greenhouse gas emissions—is still a subject of significant debate, as is the ability and desire of industry to confront the issue.
Experts agree that the shipping industry will not be attracted to the Arctic until officials can be confident that weather patterns allow for cargo to arrive intact and on time.
Post-Pandemic Shipping Practices
In the post-pandemic world, shipping delays come up in news feeds, and even casual conversation, more and more. Faced with empty shelves, armchair experts around the world are ready to talk about how to improve practices in maritime shipping.
The reality, however, is more difficult, due to increased consumer demand, COVID-safety protocols and worker shortages. Could it be easier to find qualified workers to build, mine, and process in the northern climates?
The shipping industry, however, may also be a victim of its own efficiency.
“We have been developing this problem for 35 years at least, and what it’s basically coming from is we have so refined our supply chain and we’ve gotten costs down,” Jager said. “And we’ve got this just-in-time delivery system that has low manufacturing costs, because remember manufacturing is part of the supply chain.”
Post-pandemic shipping issues are affected by the general practices that also make shipping cost-effective. Jager added that industry is so streamlined that if anything goes wrong, it doesn’t have the flexibility to adapt.
Will this practice of streamlining promote Arctic shipping in the future?
Condit posits that the choice to pursue Arctic shipping routes will be “very much an economic-driven enterprise.”
All this suggests that if there’s a way to reliably ship cargo faster and cheaper than previous routes, industry will come, but without building in flexibility to these more extreme routes, the return in investment is questionable.