WPF Historic Publication Emerging Arctic Issues: Opportunities for Canada, EU and Russia Cecilia Silundika December 31, 2010 Original copyright © 2010 by World Public Forum Dialogue of Civilizations Copyright © 2016 by Dialogue of Civilizations Research Institute The right of Cecilia Silundika to be identified as the author of this publication is hereby asserted. The views and opinions expressed in this publication are those of the original author(s) and do not necessarily represent or reflect the views and opinions of the Dialogue of Civilizations Research Institute, its co-founders, or its staff members. All rights reserved. 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For permission requests, please write to the publisher: Dialogue of Civilizations Research Institute gGmbH Französische Straße 23 10117 Berlin Germany +49 30 209677900 [email protected] Emerging Arctic Issues: Opportunities for Canada, EU and Russia Cecilia Silundika Circumpolar Analyst, Circumpolar Liaison Directorate, Department of Indian Affairs and Northern Development, Canada Originally published 2010 in World Public Forum Dialogue of Civilizations Bulletin 7, 155–74. 1 Does the Current Focus on Emerging Arctic Issues Provide Canada, EU and Russia an Opportunity to Strengthen their Economic Cooperation in Energy Security? Introduction The importance of connecting the dialogue of civilizations to economic, political and historical conditions, within which civilizations were constituted and express themselves today, cannot be over emphasized. This means not making of dialogue something in itself without rapport with the context within which the cultural and socio-economic activity is practiced. While a lot is said about the potential for commercial and economic benefits in the Arctic, the Canada-EU; EU- Russia discourse on the Arctic is often dominated by issues of peace, security and environment. Without underestimating the importance of these issues, this paper attempts to flip the coin and explore the interconnections with the view of finding how commercial cooperation can be strengthened through the Arctic dimension. The focus is on Canada and Russia as energy rich countries with potential to meet a significant part of the EU’s energy needs. 1. Overview of Changes in the Geo-Strategic Significance of the Arctic since the Cold War During the Cold War, Arctic-wide cooperation was not possible, except in limited policy areas, such as the conclusion of the 1973 Polar Bear Treaty by the five Arctic states with bear populations. Kristin Atland examines the role played by Secretary General Mikhail Gorbachev’s speech of October 1, 1987 Murmansk. The Author analyzes the de-securitization dynamics of the Russian Arctic, offered by Gorbachev speech. The concept of ‘de-securitization’ is defined in the Copenhagen School literature as ‘the shifting of issues out of the emergency mode into the normal bargaining process of the political sphere. She asserts that the Murmansk initiative was a turning point in Soviet Arctic policies, because it 2 served to launch a series of policy initiatives that tied together a wide array of security, economic and environmental issues in a unified package (Atland, 2008). Using Weaver’s security theory on ‘speech act’, aimed at taking politics ‘beyond the established rules of the game’ she analyzes the initiatives and the finding is that Gorbachev’s Murmansk speech came to mark the beginning of a new era in the Arctic and it contributed in a number of ways to the de- securitization of interstate relations in the region. By calling attention to the need for East/West dialogue and cooperation on non-military security challenges, such as environmental degradation, economic decline and indigenous peoples, the Soviet leader was instrumental in defusing tensions and overcoming military security concerns that had stood in the way of trans-Arctic cooperation. In economic terms however, Arctic waters have been important for fishing for centuries and fishery issues cut across the Cold War divide. This is evidenced by the well established Russian-Norwegian Fisheries Commission from the mid- 1970s onwards. While it was also well known during the Cold War that the seabed in the Arctic could contain hydrocarbons, it was only in Prudhoe Bay, Alaska that offshore installations were established, more towards the end of the Cold War. Still, in a geo-strategic perspective, resources played a relatively limited role in the Arctic during the Cold War. The situation is different today in the Arctic. Now resources are the main driver of the region in a geo-strategic sense, primarily oil and gas. Energy has re-emerged as a major issue in international politics. The rapid economic growth in Asia, particularly China and India, has led to a growing demand of fossil fuels. While attempts continue to develop other energy forms, hydrocarbons remain the dominant source of energy for the next generation. Energy Security is partly about securing stable and predictable deliveries of hydrocarbons. A key concern among net importers is that the majority of the 3 known reserves of hydrocarbons are to be found in politically unstable regions, notably the Middle East. 1a. Arctic Context and Issues One of the most significant potential conflicts over resources arises from intensified competition over access to, and control over, energy resources. The Arctic region is reported to contain about 25 % of the world’s hydrocarbon resources. The opening of the new waterways and international trade routes in the Arctic will lead to increased access and thereby change the geo-strategic dynamics of the region. One of the new strategic interests is illustrated by the recent planting of the Russian flag in 2007, under the North Pole (Borgerson, 2008; Vsevolod, 2008; Stack, 2008). The response has been an intensified effort by Canada, US, Russia, Norway and the EU to develop and articulate their Arctic policy based on the evolving geo-strategy of the Arctic region. These significant and consequential current events have also triggered a growing literature aimed at analyzing the expanding oil and gas activities in the Arctic and its impact on both world climate, the environment and its northern communities. Moreover, within the global context, the security of energy supply remains a central tenet of energy policy which is closely related to macro and micro-economic developments. Imports and exports have a significant impact on the balance of payments and are therefore important to world economies. Current trends seem to indicate widespread concerns about the security of oil and gas supply. In the face of new economic and political challenges, there is also concern 4 about the ability of the energy industry to timely and adequately invest in production, transportation and conversion of energy products required to meet the expected growth in demand (Correlje and Coby, 2008). Another important factor is that proven reserves of oil and gas are rather unevenly distributed in a few countries and regions. The Persian Gulf contains 60% of the current proven oil reserves, while Russia along with the Caspian Sea Region and the Middle East account for about two-thirds of total world gas reserves. Large consuming areas including the US, the EU and Japan will become dependent on the same oil and gas resources in the Persian Gulf, Russia and the Caspian Sea1. Over time, the demand from countries with fast economic growth like China and India will induce a growing demand, which also has to be met from these sources. These factors easily converge to make the Arctic a new front for opportunity as well as for global tensions. As seasonal ice melt increases, Arctic shipping routes become accessible for greater portions of each year. The two key routes are the Northwest Passage, which passes through channels between northern Canadian islands and Greenland, and the Northern Sea Route, which traverses waters north of continental Russia, provide paths to reduce shipping times and costs. These savings make shipping through the Arctic attractive to commercial carriers and some military surface vessels during periods of open water or ice thin enough to traverse with a reinforced hull design. As summer Arctic ice retreats, ships may travel even more 1 ref. BP Statistical Review of World Energy, 2004 5 directly across extreme northern latitudes to further reduce route distances and associated transit costs or use these routes for longer periods each year. Commercial freight shipping savings spur great interest since the vast majority of world trade travels via ocean-going vessels. It is reported that voyages between Europe and the west coast of North America using Arctic routes stand to save distance and money compared to traversing the Panama Canal. For example, by using the Northwest Passage, voyages between Long Beach and Rotterdam reduce distance by 14 percent and save a canal fee. As the Arctic ice pack retreats toward Greenland, that savings could increase to 24 percent by traveling directly through the Arctic Ocean. In fact, all voyages between the US and Canadian west coast ports and northern Europe ports realize significant savings by traversing the Arctic. 1b. Disputes and Legal Regimes Russia has filed its claim of the Lomonosov Ridge, which it asserts is a natural extension of its Eurasian landmass, almost the size of Western Europe. Canada and Denmark on the other hand are reported to be at odds over the possession of Hans Island, while Canada and the US are in dispute over the Northwest Passage. Russia and Norway continue to dispute their maritime limits in the Barents Sea and Russia's fishing rights beyond Svalbard's territorial limits within the Svalbard Treaty zone.