Global warming has created not only a number of environmental concerns but also a series of potential political disputes. The mineral and hydrocarbon wealth of the Arctic, which will soon become accessible for commercial development, has triggered a series of disagreements over ownership and rights among countries surrounding the Arctic ocean: Canada, the United States, the Russian Federation, Denmark and Norway.
The dispute has been mainly focused on water rights beyond 200 nautical miles of coastline. The claims have been submitted to the United Nations to be resolved according to international law. As the second largest Arctic nation after Russia, Canada will play a crucial role in the economic development of this region.
The melting ice has created great economic opportunities, but what does all this mean?
Currently, the Canadian governmental and nongovernmental organizations are intensively engaged with partner countries in creating frameworks and workgroups to solve a number of issues surrounding Arctic cooperation and security. The Canadian Forces are increasing their activities in the North to reassert sovereignty and strengthen border defence. In 2007, Prime Minister Harper announced that the CF would build a new army training centre in Resolute Bay and refurbish an existing deepwater port at a former mining site in Nanisivik, Nunavut. These ports would be usable for both military and civilian purposes.
The opening of the Northwest Passage (NWP) will facilitate transportation and diminish the trade route distance between Asia and Europe by an estimated 7,000 kilometers, thereby saving about two weeks of travel time. In the event of greater trade between Europe and Asia due to the recent shift of world financial systems, the NWP could eventually become a major transit route. Aside from legitimate trade and transit purposes, the Passage, which lies within Canadian internal waters and provides direct access to Canada’s mainland, could also serve as a base for illegal activities, such as drug trafficking, weapons proliferation and piracy. The increase of maritime traffic over the NWP would also endanger the Canadian environment due to transit of hazardous materials such as oil and various chemicals.
The economic development of certain regions lying along the NWP is a crucial matter for Canada. Severe weather conditions and the environment as a whole have in the past prevented Canadians from settling in the northern regions, therefore hampering its development. Thus, Canadian Forces would have an important role to play in regional development as well as defence.
During simulation talks organized by the University of British Columbia, former Canadian and American officials and high profile academics concluded that drawing the shipping lines is of high priority. The Canadian side should seriously consider developing a plan for potential ports along the shipping routes and reinforce the aforementioned port projects. It is important to have at least one port at the entrance to Canadian internal waters through the NWP and another at its exit. The construction of port(s) in the north would facilitate the transit of vessels, strengthen border control and, in turn, prevent illegal activity from developing in the region.
Construction of ports in such an environment would require substantial financial capital and significant technical expertise. If necessary, Canada could invite other countries friendly to our position to invest in these projects. Since ports are of strategic importance, Canada should maintain military as well as economic control at all times. Such action would not only help Canada to launch northern projects successfully, but would also lay grounds for greater cooperation with involved states and possible diversification of its energy and other exports if the demand from the United States decreases. Launch of the Northwest Passage port project(s) would also strengthen the Canadian position when negotiating its Arctic claims, should such a need arise.
However, Canadian security is also vulnerable on a strategic level as countries such as Russia and China increase their presence in the Arctic and nearby waters, perhaps not with the intention of violating Canadian sovereignty and challenging its economic interests, but to protect their own borders and interests. Canada, for its part, must balance the security gap in the region by working with its closest allies, especially the United States. Perhaps the creation of a department along the lines of, or as a part of, NORAD to oversee Arctic waters would eliminate the security imbalance created by the presence of foreign naval elements.
Balancing the Russian stance militarily may not be sufficient to successfully keep the lines in check. On the global stage, growing dependence on Russian energy exports has provided Moscow with an important instrument of power, one that is far more constructive than its substantial military and nuclear capabilities. Given the choices of continuing privatization versus state-directed centralization, the optimal balance in the view of Moscow was the latter, given its interest in using the energy sector to gain international leverage. Moscow consequently chose a full-faceted domination of the energy sector, including control of natural resources, the companies responsible for their extraction and sale, as well as the means of transportation – pipelines, ports and other facilities in the energy sector.
Most existing pipelines built during Soviet times have started to lose their significance in the current “world order;” new ones are built with a strategic approach i.e., to seaport terminals that do not land lock its pipelines in one country, and diversity is sought through different geographical regions (Far East and Northern Europe). Diversity enables Russia to use its energy factor by manipulating its exports from one market to another. At present, there are numerous projects under development; some in Far Eastern Russia are in the final stages. Currently, exporting capacity to Asia has not achieved a level where it could replace European markets; however, Russia will have that capacity after these projects become operational, the first likely in 2010.
The agreement to supply China with over 300,000 barrels a day of crude oil could be seen as a strategic move and be explained in two ways. One, as a result of the drop in oil demand from Europe and the United States due to the economic recession, the Russian government, to secure its budgetary revenues, decided to facilitate oil exports to China by constructing a spur from the main line, without changing its initial plans of the East Siberia Pacific Ocean pipeline route. In return, Russia received loans and credits from China to soften the impact of the economic downturn. According to the data available, the Eastern Siberian oil fields currently lack the capacity to supply the aforementioned quantities of oil to China. Thus, the second possibility is that Russia may divert some of the oil destined for Europe to Asian markets. Their intentions are not yet clear.
The move also lays the foundation for possible future deliveries of Arctic oil and gas to the East Siberian pipeline system and, from there, to energy thirsty Asian markets. It is obvious that the lack of a constructive energy policy in Canada leaves it vulnerable not only to its importers, but also in matters of foreign affairs.
Are we prepared for the consequences of melting Arctic ice? It will open economic opportunities, spark confrontations over energy resources and create a security dilemma for Canada and North America. These concerns are of high importance to Canadian national security and they should be addressed simultaneously rather than by prioritizing. It should be obvious that such issues require a multifold diplomatic and military approach.
A former reservist, Emil Torosyan worked for the past two years with a Canadian oil/gas company with operations in Middle East and Africa. He holds a MA from Carleton University’s Institute of European and Russian Studies.
