The demand for oil has risen rapidly over the last century, so much so that it has become the most valued strategic resource in the world today. It has been the chief driver of a nation’s economic growth, both as a source of income through exports and as a source of fuel. Today, the majority of sea trade (especially oil) transits the narrow Suez and Panama canals as both offer shorter routes, cutting short what would otherwise be a long journey around the southern tips of South America and Africa. But as oil tanker traffic in these waters increases, the possibility of terror strikes, maritime piracy and shipping accidents occurring also looms large. Such incidents may even result in an oil spill that would seriously endanger the environment around it.
It is precisely because of these reasons that the Northern Sea Route (NSR), or as Europe would like to call it, the Northeast Passage, warrants attention. Extending from the Bering Strait to the Barents Sea, the route runs parallel to the Russian coast, and helps in a significant shortening of transportation time, drastically reducing fuel consumption for shipping by almost 50 percent as compared to the traditional sea route between Asia and Europe through the Suez Canal. While the NSR was used by the Soviet Union to transport minerals, oil and gas during the Cold War era, it remained relatively unused even after Soviet disintegration and the subsequent opening to international shipping. If the Northern Sea Route can be utilized for regular trade, it would undoubtedly ease traffic along the congested traditional maritime routes.
The necessity of developing this route is obvious. Energy hungry nations like China, Japan, India and the East Asian Tigers have to maintain steady energy supply to sustain their high growth rates. Territorial disputes in the Western Pacific, as in the case of the South China Sea are primarily a result of these countries’ attempts to secure their stakes over the region’s rich natural resources. Opening the NSR could help douse some of these tensions in the Asia-Pacific region, where many analysts have suggested the possibility of conflict escalation, which could lead up to a Third World War. These considerations, along with the lucrative time and fuel savings for shipping offered by the NSR in the future have prompted the Chinese to bid for offshore oil exploration in as far as Iceland and Norway.
Oil rich countries like those of the OPEC (Organization of the Petroleum Exporting Countries) have traditionally enjoyed enormous geopolitical leverage over oil dependent economies, which the former have put to good use in the past (as in the Oil Embargoes of the 1970s when world oil prices quadrupled). The likelihood of increased instability in the Middle East can also further drive oil prices skywards. Under these circumstances, it is essential that diversification of energy imports take place for these dependent nations. Russia holds some of the world’s largest reserves of oil and natural gas in the world outside the OPEC. Improved transit conditions in the NSR can unlock access to both the Arctic and Russia’s vast energy potential, which the latter would also prefer. It would, therefore, be beneficial for Russia to allow international participation in the sustainable exploitation of the region’s resources. The route can also be advantageous to growing maritime commerce between the EU and countries like China, South Korea and Japan.
Needless to mention, the benefits to India are many. One of the major issues that presently worry Indian policymakers is its energy insecurity. While it possesses significant reserves of coal, India struggles to meet its fossil fuel demand through domestic production and is therefore extremely dependent on imports. Approximately 80% of India’s total fossil fuel demand is met by imports, of which a significant chunk comes from the Persian Gulf, a region that is not alien to geopolitical instability and insecurity. While concerns regarding environmental damage caused be unsustainable exploitation of polar oil cannot be shrugged away, India just cannot afford to stand by and watch its neighbor China (which already has a long term Arctic strategy in place and is investing heavily in exploration and research) run away with the oil. A perennially ice-free ocean route (an alternative to the Suez Canal) to Europe is also a blessing in many ways to India, though its primary focus at present will definitely be on securing the region’s vast energy assets.
The prime challenge to maritime traffic in the NSR had always been the perennial presence of polar ice sheets, icebergs and poor visibility due to frequent snowstorms. But the route has generated renewed interest among the maritime community due to the phenomenal thinning and retreat of these ice sheets caused by global warming. Also, developing improved icebreaker shipping technologies can help vessels to traverse these seas. Germany is one country that is already involved in investing heavily in developing vessels that could negotiate the Arctic. While Russia has put in place stringent environmental safety measures in place, it also charges a very high “ice-breaker” fee even during relatively ice-free summers which can discourage users from opting for the lane. Ultimately, much depends on Russia developing ports, infrastructure, maintaining strict environmental security mechanisms in place, inviting international participants to investing in the region and providing expertise on oil and natural gas extraction in such harsh conditions.
Developing an alternative sea route is always a great insurance policy, especially when the environment is unstable or when increasing traffic congestion along the traditional routes result in frequent, costly delays. But, as tanker traffic increases in the NSR, military vessels would certainly be deployed to provide protection for the same. It remains to be seen whether Russia would allow this to happen so close to its territory. Appropriate mechanisms should be put in place to prevent or mitigate oil spills that can threaten the fragile environment of the Arctic. Efficient search and rescue infrastructure should also be developed to attract shipping companies to use the NSR. Notwithstanding these challenges, it is fairly certain that the NSR would have great strategic and economic importance in the days to come.
Ajay Anil Cherian is a Master’s student at the Jindal School of International Affairs, Sonepat
Disclaimer: The views expressed in this article are those of the author.