But the other thing that’s happening now is the Arctic is warming up. And, as that’s happening, the things that were previously inaccessible—like natural resources, sea routes—are now becoming much more accessible to all these countries. And they’re seeing the economic benefits, or, at least, the economic potential of exploiting the Arctic.
If we focus on natural resources, there are minerals, there’s a lot of natural gas. It’s all over the place. The most cited [estimate] I’ve seen is about 30% of the world’s [undiscovered] gas reserves are somewhere within the Arctic, and it’s essentially untapped. That’s, if not hundreds of billions, trillions of dollars’ worth. And that’s not counting a lot of the critical minerals we need [for the green transition], like lithium, uranium, things like that.
As for trade routes, if a ship travels Russia’s Northern Sea Route instead of taking the traditional route, which would be down south by India through the Suez Canal, you are cutting about 14,000 kilometers out of the trip. That’s, I think, a 50%, 60% reduction in travel time, but also, importantly, fuel. You’ll be delivering the same goods at like half the price.
And, if Russia controls the Northern Sea Route, it gets to charge shipping fees. All ports along the way are being used by these ships to refuel, to restock for their crew. That’s a huge economic incentive. And, we’re having issues in the Suez Canal with the Houthi rebels attacking ships. So Russia is positioning itself—with China’s help—to try to shift [global trade routes]. It would be a pretty huge shift in the global economy to have all this traffic redirected, all of a sudden shifting away from a more or less Western-controlled Suez Canal.
So is Russia, given its scale and geography, necessarily best positioned to benefit from the Arctic in future?
They’re definitely trying. They have named the Arctic the second most important focus for the government, aside from the war in Ukraine. The rhetoric is there. How much they’re succeeding is a little different, but they’re definitely talking about it. They’re putting money in to develop ports. Their Arctic LNG—liquefied natural gas—industry is really big. It’s been hit pretty hard by sanctions, but had it not been sanctioned as heavily, it was supposed to account for, I think, 43 percent of the world’s LNG production by 2040, which would have been, again, billions, if not trillions of dollars. Right now, they just can’t get the gas out because ships are being sanctioned. But, let’s say it’s a perfect scenario, and in 20 years they develop it, it would be a massive source of income.
And that’s not counting all the natural resources up there. China is making a lot of partnerships with mining companies in Russia to mine lithium and any kind of natural resource they can get their hands on. Right now, [capacity is] not there, but there’s a huge potential. Especially as it gets warmer, it becomes easier to build things up, gets easier to move people there, which, historically Russia had the least issue with. The Soviet Union was into creating Arctic towns to exploit these resources. They would have towns that specifically are built around a mine or a specific resource. Russia has these towns left over. They also have some of the most northern ports in the Arctic. They also have military bases there. It’s important to Russia.
They really value the Arctic economically, but also in terms of national pride. They still have a strong connection to Alaska. They think it was a mistake, essentially, that Alaska was sold to America. That’s still a big part of the cultural discussion. They have flybys with fighter jets near Alaska, and, typically, when that happens, they’ll go on TV and be like, oh, we’re showing the Americans. We’re showing our strength. So it’s definitely important, not just economically, but also as a cultural image. They see it as something they lost and something they want to get back. Some fringe politicians will often talk about the need to take it back. It’s definitely more talk right now, but it’s something that’s always in the background.
How has China managed to get involved in the Arctic?
China’s policy is essentially attaching themselves to some of the Arctic states. In the 2010s, 2000s, the way to do this was to establish economic partnerships. They had a project in Greenland, for example. They come in and they’re like, hey, you have these natural resources. We’ll come in, give you a good deal. We’ll set up our company, but we’re going to pay a good amount of taxes. Maybe we’ll pay some kind of incentive. That worked for a bit, but then some things started to not work out. For example, in Greenland, they decided they don’t want to have this massive mine, and they essentially lost that prospect. But they’ve tried in different countries. In Canada, they did succeed. They basically got rights to a mining company in the north and they were trying to get into the Arctic through that. But, as Russia became more separated from the West, especially after the invasion of Ukraine, China saw this as an opportunity to swoop in and be like, hey, we’ll help you out, but in return we get access to all these things.
Aside from economic activities, they also like to do a scientific kind of intrusion, I guess you could say. They’ll go into Norway or somewhere, and they’ll be like, hey, let’s do a joint expedition or a research project or something. Then they’ll say, well, we’re contributing to the research, we’re contributing to the economic development. We should also get a say [in governance]. Right now, the Arctic states are very strong about saying no. We’re the Arctic states. We have Arctic territory. We have the population living here. We’re the only ones who get a say in it. China is trying to change that. Basically, they’re like, no, like, everybody gets to share it. We should all have access to it. Obviously, it’s because they really want a slice of the pie. They call themselves a “near-Arctic state.” They want to have some say in what happens there.
Now that Russia is really on the back foot, China saw this opportunity. Russia is the entrance to the Arctic. They’re developing joint deals to develop the Arctic, whether that’s through creating ports and different infrastructure hubs for travel through the Arctic. They’re developing LNG projects together. They’re helping with a lot of the sanctioned projects that have been hit really hard, where essentially, they just stopped working because Russia just was not getting parts they needed. China has built a lot of those.
Does China’s growing position in the region underpin Trump’s bombastic rhetoric with regard to Greenland and Canada?
It’s hard to say what Trump thinks, but I think you could argue that Trump, or America, has recognized that China and Russia are working really closely in the Arctic. Their Arctic defense strategy directly points this out and says that this is the biggest threat to Arctic states and NATO. They recognize it. We’re seeing Russia and China work together. They had joint flights together, military flights. That never happened before. They flew a couple of strategic bombers by Alaska. So that was a new development. They’re definitely seeing this increase in cooperation again, partially because Russia has no choice—there’s no one else to turn to at this point. You could argue that America wants to step in and sever that connection. We’re seeing that with America meeting with Russia over the war in Ukraine. Apparently, one of the things that Russia promised to the U.S. is access to their Arctic. Maybe that’s a way to counterbalance China’s growing hold over Russia.
But, again, it’s hard to say what the strategy is. Trump definitely notices the Arctic in some way. He signed an executive order to allow Alaska’s natural resources to be exploited more, something that Biden was trying to protect for environmental reasons. The intention is there for companies to go in and start extracting oil and whatever minerals they can.
And, yeah, the strategic importance of Greenland and Canada is very high. That’s why America has a military base in Greenland. But, if they really wanted to have more bases or whatever Trump imagines to improve the security, I don’t see why NATO, Denmark and Greenland wouldn’t agree to this. I think it’s more his personal goals to acquire Greenland. If the issue really is defense, and he’s worried that Greenland is inadequately defended, that there are security vulnerabilities because of Denmark’s lack of defense spending, those are valid concerns. But to jump to the conclusion that you need to take over Greenland, potentially forcefully, I think is misguided.
The U.S. has had a military base in Greenland since World War II, when Denmark fell to the Nazis. America took over Greenland to make sure Germany didn’t get it. Since then, there has been a constant presence, through the Cold War, after the Cold War, and up to today. There’s still a military base in Greenland. It’s not like they don’t have that access. It’s probably more that Trump sees the economic potential of Greenland. But who knows?
Could you tell us about rising tensions in the region today? You have reported, for instance, about Russian ships being detained in Norway under suspicion of sabotaging communication cables in the Baltic Sea.
Russia’s always been pushing buttons, right? This is more my opinion than anything, but, understanding how Russia operated throughout the Cold War, and how it operates now, it’s pushing buttons to see how far it can push NATO. They can always deny [covert actions]. It’s not us, these are not our troops or whatever. We saw it in Crimea. These are just little green men. We don’t know who they are. They can just say it’s not us, and then see how the West reacts.
It is pushing limits and seeing what they can get away with. These cable cuttings, it [seems like] the same thing. It’s a company that cuts the cable. The Russian government just won’t respond to [questions about it]. They’ll be like, why should we answer? This has nothing to do with us. But there are a lot of precedents where they’re using commercial ships for military purposes.
A couple years ago they changed their laws so that, basically, if any kind of military or any security department or institution wants to use your civilian ship for something, you have to let them use it. There have been instances where regular fishing vessels and shipping vessels have been found with advanced spying equipment with them. Russia will say we have nothing to do with this. But it’s an open secret that Russia spies using regular commercial vessels.
Right now, it’s an inconvenience when there’s a cable cut here, there’s a cable cut there. It disables communications for a couple hours, maybe up to a week. But there’s evidence that Russia is mapping all of this infrastructure to know where everything is. A few weeks ago, there was a ship scouting the English Channel and taking photos of British-to-Europe connections—different cables and stuff. They’re mapping it out for a potential large-scale conflict. If they need to cripple the communication networks, they’ll have the maps for it. They would have access to these infrastructure maps, and they could quite heavily disable communication networks or infrastructure or energy pipelines.
Do you see any openings for de-escalation moving forward?
It’s difficult because of the war in Ukraine right now. I don’t think any Western countries, especially in Europe, can pretend at this point that Russia is friendly—as long as Putin is there. Ukraine’s not the first country they invaded. They invaded Georgia. They have a presence in Moldova. There’s a clear nefarious presence to Russia wherever it is outside of its borders. So I don’t think there’s a point for de-escalation right now, because of the war in Ukraine.
At this point, a lot of European nations are realizing, we need to do something about it. They’re not going to revert their defense spending. A lot of nations have increased their defense spending quite heavily. Nordics included. They’re removing barriers to interoperability. Finland, Sweden and Norway have created an agreement where they made it easier for military units to pass through their borders. The idea is, if a war breaks out, it will start in Finland, and NATO could use Norwegian ports to provide ammunition, soldiers, equipment, and send it directly to the front in Finland, through Norway, through Sweden, without having to be worried about any laws or restrictions slowing that down in any way.
What trends should we keep an eye on in the short- to medium-term?
Spending is going to keep going up in the Arctic. Exercises are ongoing now. A few years ago, there was, maybe, one or two [exercises] a year, where it’s almost symbolic. Now it’s, maybe not on a monthly basis, but every other month that there’s some kind of NATO training in the Arctic, whether it’s a full-scale—like, 100,000 NATO soldiers participating in a simulation of Russia attacking the Nordics—or just small units.
A month or two ago, there were Special Forces units practicing how to survive in the Arctic, how to operate in the Arctic. We’re seeing a lot of equipment being specialized for Arctic conditions. Before, a lot of things were made to survive in the Middle East. Sand and heat and things like that. Now it’s the opposite. It’s snow. It’s negative 40°, negative 50° conditions.
There’s going to be a lot of discussion about how to properly address this growing issue. Concern about Arctic security. And you’re going to start noticing a lot more investment and development in the Arctic, as it becomes more accessible—as people realize that it’s profitable. As it becomes more accessible, it becomes cheaper to [exploit] and people will start seeing it as more beneficial than costly.
The other thing is, global warming is happening, and there’s going to be water shortages most likely. There’s a lot of water in the Arctic, so there’s going to be environmental migration. As areas become too unlivable, there might be migration north.
Are new settlements being constructed in the Arctic already?
We’re a bit early for that. What I am seeing is a lot of consulting firms related to the Arctic. They’re supposed to be the experts that help you start your company there or expand your company into that area. They will help you do business in the Arctic. But they cost a lot of money. So clearly people are paying for these services. It’s something that’s not being considered to be done now, but it’s definitely something that’s being considered as an option. We are seeing more investment into the Arctic, we’re seeing more operations going on, and I think it will naturally develop.
We’re seeing that in even Canada. They’re putting up funds to develop their Arctic defense. But, at the same time, they’re improving their ports. I think it will naturally grow. They’ll build a port, that port will need people to maintain it. Those people will need housing. From there it will just grow and grow. Maybe there’ll be a quicker shift, but, at this point, it’s definitely slow and steady. But there’s a lot of money going towards Arctic defense and developing the economy. People aren’t going to do things for the heck of it. This money is going there because people are seeing the potential and are trying to bank on it paying off in the long run.
GET SPLINTER RIGHT IN YOUR INBOX
The Truth Hurts
