Arctic jostling

Arctic ice cap 2012, source

Scientist are announcing a record low level of ice coverage in the arctic during this past summer. Words like "staggering", "collapse" "record minimum" are being used to explain the extensive loss of sea ice in the arctic region. The arctic polar ice cap is important to regulate the planet's temperature, significant ice loss delivers proof that the planet is indeed much warmer than it used to be.

The impacts of the record loss are severe and far reaching. One of those is of course the reduction of challenges while traversing the waters of the Arctic Ocean. This is predicted to have a major impact on world trade due to new shipping routes opening up. The development and foraging of arctic resources, in the mining and petroleum sectors, are also high on the corporate agenda.

On the oil and gas front, Shell has just announced it is suspending it's drilling plan somewhat. They are still drilling, but not for oil at this stage, due to damage to equipment required in their agreement with the US government. However, preparatory drilling continues in the Chukchi Sea, expected to go on for another week, before moving to the Beaufort Sea, to drill for another month.

Drill rig Kulluk in Seattle, by AP

Shell is reported to have spent $4.5 billion on the project, and has had some scary moments already, proving the North might be more ice free than before, but still no picnic either. British Petroleum (BP) in it's arctic quest for oil, has shelved plans to drill in the Beaufort Sea, citing challenges in meeting requirements.

Meanwhile on the Northern Sea Route, state owned shipping fleet operator Sovcomflot is salivating at the thought of increased traffic from Asia to Europe, using the Arctic. In this article, the benefits - and there are many - of the Northern Sea Route, versus the Suez Canal, is heralded.

All has to be taken into context; Sovcomflot is about to go to an Initial Public Offering (IPO), meaning those wonderful Wall Street types are getting ready to steal yet another Russian public asset, probably for pennies on the dollar. Just what the world needs more of, tankers operating in harsh Arctic conditions, run by thieves and liars whose only priority is quarterly reports. Sounds promising.

Although there might be less ice, there still is ice, and the passage of commercial traffic, including those of future "public owned" Sovcomflot, is heavily dependent on the ability to keep the sea lanes open, which of course, will fall on the Russian public, and its fleet of icebreakers, primarily at Atomflot. However, 12 of the 15 powerful ice breaking ships in Russia's fleet need to be retired by 2020. The replacement cost will be borne by the Russian public, as announced by Lord, uh I mean, President Putin, back in June 2012, at a predicted cost of 143.5 billion Rubles (about USD4.5 Billion).

China's Snow Dragon

Meanwhile, the Chinese are celebrating their first crossing of the Arctic Ocean, using the Northern Sea Route, arriving in Iceland, in mid August of this year. They observed very low ice on the voyage and intend of doing the return trip, using a even more northern route, on their way back to China.

The Xue Long, or Snow Dragon, is a government owned research icebreaker. Typically used in their Antarctic operations, it has made several trips into the Arctic, including a "surprise" visit to Tuktoyatuk in 1999... which kinda pulled down the pants on the Canadian government.

Originally built by the Russian in 1993, as a ice breaking cargo ship, the Chinese have extensively refitted her for scientific survey in 2007, with another refit expected in 2013. The 10,225 dwt Shanghai based ship, is powered by a singled B&W diesel engine delivering 13,200 kW to a single fixed pitch propeller. She features a helicopter and an Arctic class Autonomous Underwater Vehicle, and is crewed by a crew of 34. China is expected to take delivery of its second polar icebreaker in 2014 - pictured below.

New Chinese research icebreaker being designed by Aker, expected 2014