Publication: Russian Policies for Development of the Northern Sea Route: An Assessment of Recent Developments and Implications for International Users
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Authors: Arild Moe
CNARC member: Fridtjof Nansen Institute (FNI)
Introduction: The Russians government’s ambitions in the Arctic have changed. The successful completion of Yamal LNG and the Novy Port oil projects demonstrated that the potential for resource extraction with maritime logistics was greater than thought just ten years ago. This insight matured at the same time as it became clear that international transit shipping would not take off as anticipated in 2010-12. Very ambitious plans for development of resource projects along the Siberian coast have become a cornerstone of state policy.
The new goal is to establish year-round navigation on the NSR, including toward the east to facilitate exports to Asian markets. To do this requires a substantial increase in the number of icebreakers as well as investments in other infrastructure. The basic rationale of the Russian plans is now opposite of the view prevailing before 2012. At that point, it was thought that the opening of the NSR for international transit would generate revenue to help pay for new infrastructure, including icebreakers. Now it is clear that international shipping companies will not start to seriously consider using the NSR unless stable year-round navigation serving resource extraction projects in the Russian Arctic has been established. 2 Thus, for international shipping, key questions concern whether infrastructural development plans are realistic. A central, related question is whether Russia will really have enough icebreakers available to support a substantial increase in international transit use, and in what time frame.
Simultaneously, the increasing role of destination shipping has also meant that Russia can unilaterally set the terms for the most dynamic segment of Arctic shipping. How have international shipping companies been affected?
Increased Russian interest in Arctic development, and the NSR in particular, led to a re-evaluation of the organizational structure and an internal struggle for authority over the sea route. How should the outcome of this struggle be interpreted and what are its implications for shippers?