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In this article on the development of the energy, business and military nexus of the Arctic by Russia, the Red (Team) Analysis Society studies how the Russian Arctic is becoming a new crucial business and strategic “centre” in the world, through the creation of numerous energy and infrastructure projects and operations, which attract Chinese companies (Jean-Michel Valantin, “Russian Arctic Oil: a New Economic and Security Paradigm?”,The Red (Team) Analysis Society, October 12, 2016).
In effect, the Russian political, industrial and business authorities turn this immense extreme region into an international attractor, thanks to the combination of the consequences of climate change and of the natural resources, which become accessible because of the warming of the region and thus relative retreat of ice (see below in part 1, the 28 Oct 2016 NASA video visualising the retreat of the Arctic ice since 1984).
The Russian strategy is efficient with, among others, the Chinese and Norwegian business and strategic actors, as well as interests. The Russian Arctic attractor is deeply dominated by Russia’s understanding and strategic vision of a quickly and massively changing planet (Jean-Michel Valantin, “The Arctic, Russia and China’s Energy Transition“, The Red (Team) Analysis Society, 2 February, 2015) and “The Planetary Crisis Rules (Part 1)”, The Red (Team) Analysis Society, 27 January 2016).
China is sharing with Russia the understanding of the very practical consequences of the current planetary change upon politics and the economy. Consequently, the Chinese political and business authorities take action to turn these changes to their advantage (Valantin, “The Chinese Shaping of the North”, The Red (Team) Analysis Society, 9 June 2014). This goes with the development of commercial and strategic negotiations and partnerships with Russia, the dominant power of the Eurasian Arctic region.
This phenomenon is typical of the new convergence between the current economy, geopolitics, and the emergent “Anthropocene” geological era. (Jean-Michel Valantin, “The Anthropocene Era and economic (in)security”, The Red (Team) Analysis Society, 19 September 2016). The international geophysics community thus qualified this new era because humankind has become the main geological and biological force on the planet, and this immense force is driving a planetary change that affects the atmosphere, the lithosphere, the hydrosphere, the cryosphere and the biosphere (J. R. Mac Neill, Something New Under the Sun, 2000).
In this article, we shall more particularly focus upon the way the current energy, industrial and military development of the Russian changing Arctic is attracting public and private Chinese sectors, meanwhile becoming the new and long-term giant support of economic, business and security development for these two countries. We shall thus see the resulting interlocking of the Russian Arctic strategy with the Chinese “New Silk Road” initiative.
Creating a Russian Eurasian corridor on an extreme planet
Over the last few years, Russia has been accelerating and intensifying the energy, commercial and military development of its land and sea Arctic region. The Russian political, industrial and trade authorities are creating an energy, industry and maritime trade corridor, which connects Asia to Europe. By the same operation, they are turning their Arctic zone into a new oil and gas Eldorado (Charles Emerson, The Future History of the Arctic, 2010).
What makes this extreme endeavour possible is the fact that this immense region is profoundly affected by the warming wrought by anthropogenic climate change. In effect, during the last fifty years, the Arctic region has known the most rapidly warming on the planet, with a 3° to 4° degrees increase in average temperatures (Thomas Nilsen, “Arctic Russia Warms 2.5 Times Faster Than the Rest of the Globe”, The Independent Barents Observer, November 29, 2015).
The disappearance of the Arctic sea ice is most strikingly shown in this 28 October 2016 animation gathering latest research by NASA below, where “Dr. Walt Meier of NASA Goddard Space Flight Center also describes how the sea ice has undergone fundamental changes during the era of satellite measurements.” (NASA, “See How Arctic Sea Ice Is Losing Its Bulwark Against Warming Summers “, 28 Oct 216).
This mammoth change is profoundly altering the geophysics of the region, and goes with a decrease of the time, extent and thickness of the sea ice and of the land glacial conditions. In thirty years, between the half and two-thirds of the summer Arctic sea ice have disappeared, setting up the conditions for a thermal feed back loop that keeps the ice increasingly melting, while the Arctic ocean absorbs more and more solar radiation, and heats up. This feed back loop is now qualified as “the Arctic death spiral”(Joe Romm, “Arctic Death Spiral Update: What Happens in the Arctic Affects Every Where Else”, Think Progress, May 3, 2016; see also video above).
The Russians translate into geoeconomic and geopolitical opportunities those geophysical changes. Consequently, this extreme region becomes accessible for industrial development, and, as we have seen in “Russian Arctic Oil: a New Economic and Security Paradigm?” (The Red (Team) Analysis Society, October 12, 2016), the Russian oil and gas companies have started to implement onshore and offshore operations for extracting oil in the extreme conditions resulting from the meeting of cold and extreme weather, sea ice and the warming effects of climate change.
Among many examples, a subsidiary the National oil company Rosneft, has started drilling in the Okhotsk Sea, while Rosneft keeps on exploring the area (Atle Staalesen, “No Pause in Arctic Exploration – Igor Sechin”, The Independent Barents Observer, July 18, 2016). Meanwhile, Rosneft continues to buy exploitation licenses. The last to date, but not the least, is the Lisiansky one, which should be operated through a partnership with the Norwegian Statoil, while the drilling itself is done by the Chinese rig “Nanhai 9” (Staalesen, ibid).
If the warming of the Arctic makes the latter more accessible, the summer disaggregation of the ice cap gives birth to numerous icebergs, which are a vital danger to the oil rigs operating in the Russian economic exclusive zone. In order to prevent this risk, Rosneft is investing in systems of protection, while developing systems to “move away” the icebergs from the oil rigs. During the summer 2016, an expedition led to create a scientific basis in the Laptev Sea allowed experimenting with 18 different ways to tug icebergs ( Atle Staalesen, “Rosneft Builds Base on Laptev Sea Coast”, The Independent Barents Observer, August 10, 2016). A one million tons iceberg was moved at one occasion (Atle Staalesen, “Rosneft Moves 1 Million Ton Big Iceberg”, The Independent Barents Observer, October 11, 2016). This operational approach aims at guaranteeing the technical sustainability of the Russian Arctic strategy.
The current relative retreat of the sea ice also incites Russian shipping companies to build a whole new generation of diesel and nuclear giant icebreakers. Those are devoted to the constant opening of the Northern Sea Route (RT, “Russia Floats Out Arktika Icebreaker, set to be world’s largest”, 16 June, 2016).
However, the Arctic remains an extreme region, with a fragile environment, necessitating the capability to coordinate shipping convoys, harbours and infrastructure security in the context of extreme weather. In order to achieve maximum security and coordination in this extreme environment, the Kremlin decided to put the Russian ministry of Defence in charge of the whole Arctic shipping operations in the Russian Arctic economic exclusive zone. This decision is fully involving the military in the development of the region. To implement this decision, the Ministry of Defence notably created the Oboronlogitika Company in 2011. The company is owned by the Russian ministry of Defence and is in charge of all the civilian and military shipping operations in the area (Atle Staalesen, “Ministry of Defence Takes Charge of Arctic Shipping”, The Independent Barents Observer, July 07, 2016).
The Arctic space is also developed by the Russian military through the creation of new bases on the Wrangel Island, North of the Bering Strait at the extreme east of the Northern Sea Route as well as on the archipelago of the Franz Joseph Land – north of the Barents Sea – on the north-west coast of Siberia and thus of the Northern sea route (Atle Staalesen, “Arctic Brigade Advances on Franz Joseph Land”, The Independent Barents Observer, October 03, 2016 and (Mathew Bodner, Alexey “Russia Starts Building Military Bases in the Arctic”, The Moscow Times, 8 Sept 2014). Meanwhile, the Russian political and economic authorities are using the military in order to push for the creation of new land and sea infrastructures along the Siberian coast, on the islands and on the coasts of the Siberian Archipelago in the Barents Sea, the Kara Sea, the Laptev Sea, the terribly cold and dangerous Chukchi Sea, the Eastern Siberian Sea and the Strait of Bering (Atle Staalesen, “Rosneft Prepares Seismic Mapping of eastern Arctic Waters”, The Independent Barents Observer, April 15, 2016).
The infrastructures, especially harbours, coast guards, and environmental survey, among others, which are needed on the Siberian coast in order to develop the Northern Sea route, also necessitate to bring much more power to the cities, harbours and industries on these northern zones, which were so far quite isolated.
For example, the harbour city of Pevek, on the East Siberia Sea, the northernmost Russian city, is preparing the infrastructures that are going to host the first floating nuclear reactor (Atle Staalesen, “Russia’s Northernmost Town Prepares for Nuclear Future”, The Independent Barents Observer, October 04, 2016). This reactor is being built at the Baltic Yards in St. Petersburg, by Rosernergoatom, a subsidiary of the mammoth national company Rosatom (Nick Cunningham, “Russia to Power Arctic Drilling with Floating Nuclear reactors”, OilPrice.com, April 27, 2015). After a whole year of test, the nuclear reactor, the “Akademik Lomonossov” will be transported to Pevek, where it is expected to power the city (Staalesen, ibid).
This floating nuclear reactor, the first of a series, is meant to have the capability to power a 200.000 people city, when Pevek hosts less than 5000 inhabitants. This discrepancy shows the strategic importance given to this city close to the Bering Strait. In effect, Pevek is destined to grow with the increasing number of the international shipping convoys, which will be using the Route (Atle Staalesen, “Aiming for Year Round Sailing on Northern Sea Route”, The Independent Barents Observer, December 14, 2015). Other floating nuclear reactors are meant to be built and used in order to power the numerous onshore and offshore new Russian infrastructures, which are rapidly structuring the Russian Arctic space (Staalesen, ibid).
In other terms, with the development of the Arctic, Russia installs itself into a long game of business and strategy (Emerson, ibid). This goes with the rapidly developing Russo-Chinese cooperation in the Arctic.
The Russo-Chinese energy, industrial and business partnerships in the Arctic
In effect, over the last few years, China has started becoming an important Arctic actor, through its membership as permanent observer at the Arctic Council as a “near-Arctic nation”. China is signing bilateral agreements with all the members of the Arctic council and is particularly interested by the energy and trade potential of the Russian Arctic (Valantin, “Arctic China (2) – The Chinese shaping of the North“, 9 June 2014”, The Red (Team) Analysis Society, 9 June 2014). China is projecting its gigantic influence in the Arctic, through scientific expedition, cargo convoys, trade and science partnerships, as well as financial investments, and has built its first own nuclear icebreaker, the Snow Dragon.
An illustration of this strong dynamic is the fact that, during the summer 2016, the Chinese streamer seismic vessel Hysy 720 has completed an undersea seismic mapping operation, after having been chosen for this task by the Russian giant oil company Rosneft. This operation maps in 3-D images the underground formations through the use of sound waves, in order to identify their geological content, and thus their oil and gas potential. The marine underground is divided into blocks, which are then bought by the energy companies that wish to explore and exploit them. The Chinese ship Hysy 720 is the first grand deepwater seismic vessel not only built in China, but also owned by Chinese oilfield Services Ltd. Rosneft decided to hire this company in April 2016 in order to accomplish the mapping operation of two blocks during the summer 2016, before the return of the winter night and cold. (Atle Staalesen, “Russians Choose Chinese Explorers for Arctic Oil”, The Independent Observer, April 27, 2016). In order to prepare its campaign, the Chinese ship docked in Kirkenes, i.e. the northernmost Norwegian harbour city, and signed a docking agreement with the local Henriksen shipping company.
We should note that the mapping of the second block was done in partnership and close cooperation with the Norwegian Statoil Company for the Norwegian side of the Barents Sea (Atle Staalesen, “First Arctic Summer for Chinese Oil men“, The Independent Observer, September 05, 2016). This shows, as other binational partnerships, the good Arctic relations between Norway, Russia and their companies, regarding the combination of energy development with changes in the Arctic environment.
The Arctic Russian-Chinese partnership of the summer 2016 is just one among many others energy partnerships between Russia and China, as, shows the example of the Yamal LNG plant where the Chinese invested a massive 12 billion dollars along Russian banks which input another 12 billion dollars (Valantin, “Russian Arctic Oil”, ibid). These partnerships reveal how the energy, shipping, industrial, business and strategic interests of Russia and China are converging in the Arctic.
These operations are only one example of the way Russia, in the current Anthropocene Era, is developing its Arctic region, changed by anthropogenic global warming, while developing partnerships with China as well as Norway and many other countries. As we observed previously, China’s business operators are gearing towards the Arctic, (See “Jean-Michel Valantin, “Arctic China (1)- The Dragon and the Vikings and Arctic China (2) ibid ”), while Russia is becoming a critical actor in a time when climate change is deeply altering the trade, energy and strategic status balance of the whole Arctic region (Marc Lanteigne, “Policy Brief-One of the Three Roads: The Role of the Northern Sea Road in the Evolving Sino-Russian Strategic Relations”, Norwegian Institute of International Affairs, 2/ 2015).
The Chinese New Silk Road meets the Russian Arctic Long Game
The partnerships between Chinese and Russian businesses are encouraged at the highest level by Russian political authorities, as shown by Russian Deputy Prime minister Dmitri Rogozin 7 December 2015 statement, given in Beijing, when he invited Chinese involvement in the Northern Sea Route (“Moscow invites Beijing to take part in Arctic sea route project”, RT, 7 December, 2015). This invitation is rooted in the nexus of Russo-Chinese political, logistical and business partnerships, heightened by the Chinese “New Silk Road” strategy (Lanteigne, ibid).
The “New Silk Road” is an immense process for the development of land and maritime transportation, as well as energy, mineral and cyber infrastructures, officially launched by Chinese President Xi Jinping in 2013. It is accompanied by legions of commercial contracts and political deals between the Chinese public and private sectors and their counterparts in the different countries and continents belted by the “One Belt, One Road” initiative (Shannon Tiezzi, “China’s New Silk Road” vision revealed – a new series in Xinhua offers the clearest vision yet of China’s ambitious “New Silk Road””, The Diplomat, May 09, 2014). The New Silk Road is conceived as being a gigantic “loop” spanning from the centre of the “Middle Kingdom” to Rotterdam and from the port of Quanzhou in Fujian to Kenya, Egypt and Europe (Tiezzi, ibid). It goes with massive investments made by the Chinese-led Asian Investment and Infrastructures Bank (AIIB).
An example of the involvement of the actors of the maritime New Silk Road in the Russian Arctic is the way the China Shipping Ocean Company (COSCO) has sent more than five of its ships on several voyages along the Northern Sea Route in 2016. Mr Ding Nong, CEO of COSCO, one of the biggest shipping company in the world, announced in October 2016, at the Arctic Circle conference in Reykjavik, capital city of Iceland, that
“As the climate becomes warmer and polar ice melts faster, the Northeast Passage has appeared as a new trunk route connecting Asia and Europe” … “COSCO Shipping is optimistic about the future of the NSR and Arctic shipping” (Atle Staalesen, “COSCO Sends 5 Vessels Through Northern Sea Route”, The Independent Barents Observer, October 10, 2016, and Jean-Michel Valantin, “Arctic China (1)- The Dragon and the Vikings”, The Red (Team) Analysis Society, 24 May, 2014).
It is interesting to note that, for such an important business actor, climate change is fully recognized and turned into an opportunity, and that climate disruption is in fact turned into a massive commercial advantage.
In other terms, Chinese interests and needs meet the Russian Arctic strategy, and are turning this warming region into a continental-wide hub of commerce, energy and natural resources development, while reinforcing each other: the Russian Arctic becomes the basis for a long game energy, business and military strategy, while the Eurasian corridor it creates becomes a new and essential segment of the New Silk Road.
The strategic convergence of these two Eurasiatic giants is based on the new alliance of the oil, gas, nuclear and finance sectors, and on the will to turn the potentially catastrophic consequences of climate change into a large spectrum support. This shows that potential threats, if understood and anticipated early enough, can be transformed into strategic opportunities (Helene Lavoix, “Business and Geopolitics: Caught Up in the Whirlwinds?”, The Red (Team) Analysis Society, 19 October, 2016).
This convergence has deeply transformative consequences, because it is starting to attract other actors, for example in East Asia, such as Viet Nam, South Korea and Japan to the Arctic, besides historical Arctic actors such as European Norway. Furthermore, railroads are built, through investments and development, to link Russian Arctic harbours to Central Asia (Atle Staalesen, “Chinese money for Archangelsk rail and port”, The Independent Barents Observer, December 10, 2015 and “This Arctic Shipping makes it into the history books: From South Korea to Kazakhstan through the Northern Sea Route”, The Independent Barents Observer, July 25, 2016).
Is the warming Arctic becoming the “centre” of an emerging Eurasian market with related security shift, while the Arctic keeps on warming?
It is the issue the Red (Team) Analysis Society will study in the next part of this series, by continuing to underline how geopolitical and environmental changes are of importance to the business and security communities.
To be (soon) continued.
About the author: Jean-Michel Valantin (PhD Paris) is the Director of Environment and Security Analysis at The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.
Featured image: 50 Years of Victory at North Pole by Christopher Michel 50 Years of Victory North Pole Icebreakers, 12 July 2015, CC BY 2.0 (http://creativecommons.org/licenses/by/2.0), via Wikimedia Commons and Flickr.