By Alexey Dolinskiy

The increased melting of the ices in the Arctic creates an opportunity for increased economic activity in the region, and the change has not gone unnoticed by regional players.

Between 2006 and 2009, the five countries that directly border the Arctic Ocean — Canada, Denmark, Norway, Russia and the United States — adopted national Arctic development strategies. The other three countries that have parts of their territories beyond the Arctic Circle — Sweden, Finland, and Iceland — soon followed suit. Today, even countries that are far from the Arctic, such as China and India, are increasingly active in that part of the world.

View the infographics: Arctic Resources and Maritime Boundary Lines

In December 2012, the Russian International Affairs Council (RIAC) presented its proposals for an international roadmap of Arctic cooperation.

According to Andrei Zagorsky, head of the Arctic project at RIAC, there are several main reasons for economic development of the region — energy first among them.

“Vast energy resources are probably the most important reason for the Arctic economic development,” Zagorsky said. “High energy prices and technological advancement made shelf oil and gas drilling there potentially profitable.”

According to some estimates, 58 percent of the hydrocarbons located under the world’s oceans are located in the Arctic, and the growing demand for energy has brought global attention to the region. Major players in the oil and gas industry including Shell, Statoil, Total, Gazprom, Rosneft and BP have ambitious plans for the Arctic.

The melting of Arctic ice has also gradually opened cargo shipping routes across the Arctic between the Atlantic and Pacific oceans.

The Northern Sea Route goes along Russia’s northern cost and remains the shortest sea route between Asia and Europe, while the Northwest Passage is a route along the northern shore of North America. Russia’s Gazprom has already started using the North East Passage for exporting lique­fied natural gas (LNG) to Japan. PricewaterhouseCoopers (PwC) reports that the route may take up to 1 percent of the $1 trillion trade between the EU and Asia.

The law of the sea

The new accessibility of Arctic resources has raised the previously frozen issue of who owns the Arctic. The 1958 Convention on the Continental Shelf and the 1982 United Nations Convention on the Law of the Sea state that nations have the right to a territorial waters zone of 12 nautical miles and an exclusive economic zone of 200 nautical miles. In an exclusive economic zone, a country has sovereign rights for the purpose of exploring natural resources.

Nations can also claim their exclusive right for seabed resources exploration in a stretch of the seabed adjacent to their shores in a zone up to 350 nautical miles, if they prove that it is a continuation of the continent. Russia and Norway have already claimed their extended continental shelf in the Arctic region while Canada and Denmark are preparing to do so.

Although most of the natural resources are located in undisputable exclusive economic zones and continental shelves, some may still be located in the open sea and available for exploration by other countries.

Another issue that has a potential for disputes is jurisdiction over shipping routes. Both Russia and Canada claim their northern sea passages are historic routes that need to remain under national rather than international control. National control would not prevent vessels from other countries from using the passages, but they would have to inform national authorities in advance to get permission.

The lack of clarity over territorial and economic rights in the Arctic is part of what stimulates countries to be active in the region. In the Arctic Ocean nations, the adoption of Arctic strategies has been followed by other legal, symbolic, economic and security activities.

In 2007, Russian submersibles put a national flag on the seabed beneath the North Pole; Canada, Norway and Russia have announced the modernization of their military forces in the Arctic; and Denmark is also creating its own Arctic Command. Yet, said Zagorsky, “There is hardly any space for security competition in the region. All countries would get more from cooperation, and the challenging Arctic conditions are very conducive to it.”

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