The accelerated melting of the polar icecaps and recent Russian announcement that the Northern Sea Route (NSR) is now “ice-free” beg the question of whether or not the passage is already a commercially viable option. The Heritage Foundation examined Russia’s ambitious plans for the “last frontier” in the High North in great detail. Heritage’s Ariel Cohen recently testified before the Europe and Eurasia Subcommittee on Russian energy policy, including the race to develop vast polar oil and gas reserves.
There are several logistical and regulatory problems that need to be resolved before the newly accessible NSR becomes a cost-effective transportation highway, says Joshua Ho, an adjunct senior fellow with the Maritime Security Programme at the S. Rajaratnam School of International Studies at Nanyang Technological University, in a recently published article.
The Russians control the NSR, which follows the Northern Siberian coastline of the Arctic Ocean. They assert that navigation through the NSR is now possible, allowing substantial cost savings on shipments from Northern Europe to Northeast Asia due to the reduced distance traveled. While experts still dispute when exactly the NSR will be ice-free during the entire 120 days of summer (rather than the current 20 to 30 days), most estimates range between the year 2040 and 2060. This means that returns on the investments in infrastructure necessary to make use of the NSR are far in the future.
Even if the NSR is “ice-free,” it is not entirely clear of ice—just clear enough to travel through. Any ship that aims to travel the NSR must do so with an icebreaker and receive permission from Russia Marine Operations Headquarters (MOHQ). The Russian-made global positioning system (GPS) used in the Arctic (GLONASS) is not compatible with many non-Russian ships, making navigation difficult or impossible.
Any vessel that plans to travel through the NSR must submit a request to MOHQ four months prior and obtain approval from the NSR Administration in Russia before transit. Prior to travel, the vessel must also be inspected by agents authorized to do so by the Russian authorities—at the ship owner’s expense. This is in addition to leasing icebreakers and retaining the necessary Russian translators and pilots, all shippers’ expenses out of pocket.
Finally, Ho says the unfavorable and corrupt business climate in Russia may make the entire process all the more difficult and costly. All of these factors raise questions about the potential profitability of any maritime shipping operations utilizing the Northern Sea Route and thus its commercial viability as a marine transportation highway between Northern Europe and Northeast Asia.
A dramatic reduction in costs and red tape is necessary, Ho writes, before the NSR can be used to its full potential.