The Arctic is fast becoming the latest region of great power competition as the United States and Canada, along with Russia and now China, all vying for control of an area believed to hold tens of trillions of dollars’ worth of natural resources including oil and natural gas.
For years Russia, with about half of all Arctic coastline along its northern shores, has sought to control the region and in fact, began putting more military and exploration resources into the Arctic within the past few years. Russia’s push to dominate the Arctic like China seeks to dominate the entire South China Sea has alarmed U.S. and Canadian leaders.
Now, however, Beijing is making a similar push for control over at least a portion of the Arctic in what will put all three great powers in competition, if not outright conflict, for control of a vast region of economic opportunity.
Whether you believe in “global warming” or not, the Arctic itself is receding, with ice mass disappearing in some parts while thinning in others. The retreating ice floes have made it exceedingly easier to navigate the Arctic Ocean and as such, provide new opportunities for energy exploration and extraction.
“At play is between one-fifth and a quarter of the world’s untapped fossil-fuel resources, not to mention a range of mineable minerals, including gold, silver, diamond, copper, titanium, graphite, uranium and other valuable rare earth elements. With the ice in retreat, those resources will come increasingly within reach,” notes one American media report. “As the ice pulls back, corporations and governments are moving in. Seaport facilities, mining operations, oil and gas pipelines — as well as new roads, railways, and airstrips to serve them — are arriving in the region at an accelerating pace. An inventory of planned, in-progress, completed or canceled Arctic infrastructure projects compiled by global financial firm Guggenheim Partners tallies roughly 900 projects, requiring a total of $1 trillion in investment, some of which is already on the way.”
Russia is the clear leader, having begun to build around $300 billion worth of Arctic infrastructure, much of it either completed or construction set to begin. At the same time, Russia has begun reopening and refurbishing former Soviet-era military bases while building new facilities and airfields in its northernmost regions as well as seaports along its northern coast. State oil giant Rosneft began drilling in a field last year that may yield as much as 500 million barrels of oil. The company found its first field in June; Russia hopes that Arctic resources will comprise 20 to 30 percent of its total production by 2050. Russia also has a distinct advantage in heavy and medium icebreaker ships with 40 in service and a half-dozen more to be built. Canada and Sweden have six apiece; the U.S. has five and only one of them is considered a “heavy” icebreaker (and it is old). The Coast Guard plans to build six more but the first is not expected to be delivered until 2023.
The U.S., Canada, and Finland, meanwhile, have also proposed to build significant energy extraction infrastructure in their respective Arctic regions as well. Norway’s state energy company is also searching for oil in the far reaches of the Barents Sea even as the country’s sovereign wealth fund seeks to divest itself of oil-and-gas-related investments. In January, President Trump said he would open up much of the U.S. outer continental shelf to drilling, including regions off the Alaskan coast.
But the emergence of China — a country with no territorial claims whatsoever in the region — that has begun to raise eyebrows. With its rising economic and naval power, China has begun to underwrite infrastructure projects in the region with an eye towards securing a piece of the pie. [source]
Analysis: No country is going to invest the kind of resources and infrastructure we’re talking about here without planning to get a sizeable return on said investments. That fact alone puts the great powers in more than just competition, but in direct conflict with each other. Russia is perhaps the most desperate of the three; its economy is essentially moribund and with annual GDP at about $1.2 trillion, which is not even in the top economies (U.S., China, Japan are Nos. 1, 2, and 3). So Moscow considers its Arctic investments not merely a matter of economic security but one of national security, hence its level of investment.
China is the only odd country out here, but with its growing economic (and naval) clout, Beijing obviously believes it has a right to be at the table in deciding how such global economic resources will be parsed. The oddity is that Beijing’s involvement in the Arctic is obviously hypocritical; it claims all of the South China Sea for itself, other nations be damned, and that includes great powers like the U.S., which Beijing believes has no place dictating what goes on in the region because America has no geographical skin in the game.
What’s equally obvious, though, is that the Trump administration believes the U.S. and its Western allies should also be open for business in the Arctic and, at least, they have geographical claims to certain portions of the Arctic. What will be interesting will be to see if China or Russia attempts to edge others out of their own Arctic exclusive economic zones as because they are the bigger, more powerful players. Should that occur, that’s when conflict will become far more likely because I don’t see Trump backing down from Russian or Chinese challenges to U.S. sovereign claims.
This is definitely a region to keep an eye on, and we will be. — JD