Recently, The International Panel On Climate Change made the announcement that everyone should be concerned about the increase in temperatures throughout the World.
The Northern ice is melting faster than expected, and the recent data suggests that the Arctic may be ice-free within the next 20 years. There are new sea routes developing. In the midst of this discussion, Russia stands out as a country that may benefit from this situation. Russia is one of the few Arctic countries that seems prepared to deal with everything. The pressure is on other countries to develop a strategy or risk falling behind in the race.
The Arctic ice melting has a geopolitical impact as well. Large oil and gas reserves may pop up over the next few years. The Northern Sea Route is being used to shorten the route from Asia to Europe. Some investors are also looking for new resources, while some energy companies are evaluating their options. Russia believes that opening the seas will allow them to export its LNG and unlock supplies from some fields in Siberia. The Russian company Novatek recently shipped Cargo to China in a shorter time span compared to taking the Suez route. Also, The Venta Maersk successfully completed a trip to St. Petersburg along the Northern Sea Route. The navigation period is increasing.
How Other Countries Are Dealing With The Situation
Denmark, Finland, Canada, and The United States are some of the countries that are in The Arctic Circle. There are countries outside of the circle that feel that The Arctic Circle belongs to no one. China recently announced a policy that points out how China will pursue opportunities in the area. China is currently developing some icebreakers.
The circle is currently regulated by treaties such as The United Nations Convention on The Law of The Sea. The Arctic Council also has some input. The Council ensures that there is environmental protection around the circle. The UNCLOS contains information about de-limiting territorial seas. There have been some border disputes involving the territory. Russia, Denmark, and Canada are all interested in The Lomonosov Ridge. To deal with the conflict, Russia is strengthening its military presence in The Arctic Circle.
Managing The Conflict
Former US President Barack Obama supports more icebreakers, however acquiring more ships is difficult, as each ship costs over a billion dollars and takes several years to build. Russia recently set up The Northern Sea Route Administration, a federal budgetary institution that helps manage the icebreakers. Russia believes that it has the necessary tools and infrastructure to deal with the difficult conditions in the North.
—Davenport Laroche, Shipping Container Investing House out of Hong Kong