Warming Aids Arctic Economies, but Short of 'Cold Rush'

Posted by Michelle Howard
Thursday, August 28, 2014
Photo: Northern Sea Route Information Office

Climate change is aiding shipping, fisheries and tourism in the Arctic but the economic gains fall short of a "cold rush" for an icy region where temperatures are rising twice as fast as the world average.


A first cruise ship will travel the icy Northwest Passage north of Canada in 2016, Iceland has unilaterally set itself mackerel quotas as stocks shift north and Greenland is experimenting with crops such as tomatoes.

Yet businesses, including oil and gas companies or mining firms looking north, face risks including that permafrost will thaw and ruin ice roads, buildings and pipelines. A melt could also cause huge damage by unlocking frozen greenhouse gases.

"There are those who think that growing strawberries in Greenland and drilling for oil in the Arctic are the new economic frontiers," said Achim Steiner, head of the U.N. Environment Programme.

"I would caution against the hypothetical bonanza that some people see," he told Reuters of Arctic regions in Russia, Nordic nations, Alaska and Canada. U.N. studies say global warming will be harmful overall with heatwaves, floods and rising seas.


Fewer Fur Coats
In 2002, however, Russian President Vladimir Putin mused that warming might benefit Russia - thereby easing pressure to curb greenhouse gas emissions. He joked that warmer temperatures could mean fewer fur coats in northern regions.

More than a decade later, researchers see the Arctic as a test case for the impacts of climate change. It is warming fast because a thaw of white ice and snow exposes darker ground and water below that soak up more of the sun's heat.

"So far, I believe the benefits (of Arctic warming) outweigh the potential problems," said Oleg Anisimov, a Russian scientist who co-authored a chapter about the impacts of climate change in polar regions for a U.N. report on global warming this year.

Others say it is hard to discern benefits. Factors such as improved drilling technology or relatively high oil prices around $100 a barrel may be bigger drivers for change than a thaw in a chill, remote region shrouded in winter darkness.

Off Alaska, for instance, oil company bids for leases in the Arctic Chukchi and Beaufort seas since 2005 have totalled about $2.7 billion. But a previous round in the 1980s - before global warming was an issue - attracted similar sums, according to data from the U.S. Bureau of Ocean Energy Management.

"There are subjective interpretations of development costs and benefits (tourism, fishing, oil and gas, shipping) but it will be some years before there are enough trends and data," said Fran Ulmer, President Barack Obama's chair of the U.S. Arctic Research Commission.

Indigenous peoples doubt there are benefits. Aqqaluk Lynge, a Greenlander and ex-head of the Inuit Circumpolar Council, said vital dogsleds were useless in some areas because of the thaw.

"People think the economy is Wall Street but it's the local economy that's feeling the pressure," he said.

Among new activities, 71 cargo ships used a short-cut shipping route between the Pacific and Atlantic oceans north of Russia in 2013. Roughly the same number is likely in 2014, said Sergei Balmasov of the Northern Sea Route Information Office.

In a sign of more tourism, Crystal Cruises will send its Crystal Serenity ship from Anchorage to New York in 2016 past icebergs and polar bears north of Canada - priced from $19,755 per passenger and with an escort vessel as an ice-breaker.


Cruises, Cargo
The route was first navigated in 1903-1906 by Norwegian explorer Roald Amundsen, but has only been ice-free in some recent years. Paul Garcia, spokesman for Crystal Cruises, said there had been a high volume of bookings so far.

Tourism has benefited in some areas. The number of nights spent by visitors to the Arctic archipelago of Svalbard north of Norway rose to 107,000 in 2013 from 24,000 in 1993.

And cod, haddock, herring and blue whiting are among fish stocks expanding north. Iceland has set new, unilateral quotas for mackerel, including almost 150,000 tonnes in 2014.

"The biomass sum of all types of species is increasing, and will continue to increase in the Arctic," said Svein Sundby, of the Institute of Marine Research in Norway.

Among oil companies, Exxon Mobil began drilling in Russia's Arctic on Aug. 9 despite Western sanctions on its Russian partner Rosneft over Ukraine crisis.

But Royal Dutch Shell dropped plans for drilling in 2014 after spending $5 billion on exploration since 2005, following protests and accidents off Alaska.

And despite any gains, a 2013 study in the journal Nature said the Arctic has a hidden economic time bomb.

A major release of methane trapped in the frozen seabed off Russia could accelerate global warming and cause $60 trillion in damage, almost the size of world GDP, it said. Costs would be from more heatwaves, floods, droughts and rising sea levels.

"The size (of drawbacks) is likely to dwarf any kind of benefits," said Chris Hope of the Judge Business School at Cambridge University, who was among the authors.

The U.N.'s panel of climate experts says that it is at least 95 percent probable that human activities are the main driver of warming since 1950. But many voters are doubtful, suspecting that natural variations are to blame.

(By Alister Doyle, Environment CorrespondentEditing by Tom Heneghan)

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Environmental

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

Ecoships Claims 15% Ship Efficiency Gain

Ecoships introduced a customized version of the Six Sigma DMAIC approach to process and performance evaluation in order to optimize the energy-efficiency of the vessels under its management.

IBIA Welcomes MEPC Bunker Compromise

The compromise solution on the issue of ensuring bunker quality agreed at the 67th meeting of the IMO’s Marine Environment Protection Committee (MEPC 67) has been

Energy

MARAD Seeks Comments on Proposed Policy for Deepwater Export Applications

The Maritime Administration (MARAD) is seeking comments on the agency’s proposed policy to accept, evaluate and process license applications for the construction

Oil Drillers Group to Fight U.S. Export Ban

More than a dozen U.S. oil producers have joined to lobby the federal government to reverse the 40-year-old ban on U.S. crude exports, a move that supporters hope

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

News

WFW Advises ING Bank on $340m Loan Facility for Euronav

Watson, Farley & Williams (WFW) has advised ING Bank N.V. (ING) as sole bookrunner and facility agent for a syndicate of banks on a $340 million loan facility made available to Euronav NV.

UN Authorizes Ship Inspections Near Somalia For Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

Arctic Operations

Rederij Groen Takes Delivery of 7-Waves

Rederij Groen’s entire SRSV fleet built by Damen Maaskant Shipyards Stellendam. Dutch offshore services company Rederij Groen has taken delivery of the 7-Waves,

New Oil Field Found in British North Sea

GDF SUEZ E&P UK Ltd and BP today announced a new exploration discovery in the UK Central North Sea. The discovery, which spans GDF SUEZ operated block 30/1f

MEPC Makes Progress on Energy Efficiency, Emissions

The Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) met for its 67th session from October 13-17, 2014, at IMO Headquarters in London.

Logistics

UN: Ship Inspections near Somalia for Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Singapore Bunker Meter Mandate Targets 'Frothy Fuel'

Singapore, the world's biggest bunkering port, plans to end the so-called "cappucino effect" in ship fuelling through new meters designed to stop suppliers from short-changing customers,

Antwerp Port Achieves Highest Throughput

The port of Antwerp handled a freight volume of 148,344,168 tonnes during the first nine months of this year. That’s 3.7% more than the same period last year. Both

 
 
Naval Architecture Navigation Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.4864 sec (2 req/sec)