Polar power play: Who will prevail at the rooftop of the world?

Rune Rafaelsen is a man with a very ambitious plan.

Mr. Rafaelsen is the mayor of Kirkenes, a small port at the northern tip of Norway, 250 miles inside the Arctic Circle. Kirkenes is the end of the line for a passenger ship that trundles daily up the coast through scenic coastal fjords. Its 3,000 inhabitants live in the shadow of an iron-ore works that went bankrupt in 2015. The town is best known for its dramatic northern lights and king crabs, the massive crustaceans with legs the size of sculling oars.

And yet snowy Kirkenes is the place that Rafaelsen envisions as a “new Singapore,” the crucial pivot of a revolutionary global trade route across the rooftop of the world linking the Pacific and Atlantic Oceans.

It seems an unlikely prospect. But as melting sea ice opens up the Arctic for the first time in tens of thousands of years, the remote and inhospitable region is emerging as one of the last frontiers of a great geopolitical clash. The world’s big powers – including Russia, China, and to a lesser extent the United States, as well as several other countries – are competing fiercely to exploit the Arctic’s shipping lanes, tap its vast booty of minerals and energy, and otherwise gain an economic and military toehold in this strategically important region.

All this may turn out to make Rafaelsen’s dreams for Kirkenes less quirky than they sound. Indeed, it could put the remote town, where whale steak enlivens local restaurant menus and tourists can stay in one of the world’s few ice hotels, at the eye of a gathering storm of interest, investment, innovation, and tussles for influence in the Arctic.

“The Arctic has turned into an incredibly interesting place where climate change and geopolitics are becoming intertwined,” says Mark Serreze, director of the National Snow and Ice Data Center, a US research institute in Boulder, Colo.

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While countries have been laying plans to take advantage of the Arctic for decades, it’s only been recently that the climate and technology have changed enough to allow those ideas to move from notional to something more concrete. Earlier this year the Eduard Toll, a liquefied natural gas (LNG) tanker named after a 19th-century Russian Arctic explorer, was the first ship to make the winter voyage from one end of the Arctic to the other without assistance from an icebreaker.

“Pretty crazy things are happening,” says Dr. Serreze. Arctic temperatures are rising twice as fast as the world average. The four lowest measurements of winter ice were all taken in the past four years, and summer ice cover levels have been falling by 13 percent each decade since 1981.

By midcentury, experts predict, there will be no ice in the Arctic during the four months of summer, just a blue ocean. That probably means no polar bears either.

But in Kirkenes it means much more than that. “I’m not in favor of global warming but it’s happening, and in Kirkenes we need to exploit it,” says Kenneth Stålsett, head of the local government’s business development arm.

Mr. Stålsett, an enthusiastic young man with a doctorate in innovation and strategy (read “disruption”), is promoting the construction of a railroad south from Kirkenes toward European markets. The scheme has won tentative approval from the Norwegian and Finnish governments.

It is not hard to see where supporters of the project expect to find enough cargo to make the rail link profitable. On one wall of Rafaelsen’s office, near his ceremonial mayor’s chain, hangs a scroll decorated with a scarlet Chinese paper-cut – a souvenir from one of his visits to the Middle Kingdom.

The Chinese government is putting high hopes in a future Arctic Northern Sea Route: One trial voyage from Shanghai, China, to Rotterdam, Netherlands, took less than two-thirds of the time it would have taken to sail via the Suez Canal – the normal route going from east to west – with corresponding savings in fuel and other costs.

China’s state-owned shipping giant ­COSCO has begun building ice-rated container vessels for its own fleet and is building smaller ice-capable ships that the world’s biggest shipper, A.P. Moller-Maersk, will operate on feeder routes. “We are closely following the development of the Northern Sea Route,” says Anders Boenaes, head of network for the Danish firm.

Beijing is more enthusiastic, taking “a forward-leaning view of a long-term strategy,” says Heather Conley, an Arctic affairs specialist at the Center for Strategic and International Studies (CSIS) in Washington.

A Chinese white paper published in January, setting out Beijing’s Arctic policy for the first time, declares its intention to build a “Polar Silk Road” by developing Arctic shipping routes.

Russian President Vladimir Putin told the Russian parliament in March that his goal was to make the Northern Sea Route, which runs along 3,000 miles of his country’s coastline and which Moscow claims – controversially – as its internal waters, “a truly global and competitive transport route.”

He will face many hurdles. There are no ship repair or rescue facilities yet in the Arctic. Nautical charts are poor or nonexistent. Communications are difficult at high latitudes. Drift ice poses a threat to shipping lanes, and the weather is often foul.

An ocean-to-ocean transit route “may be possible, but there is a lot of work to be done,” cautions Lawson Brigham, a former US Coast Guard icebreaker captain who now teaches at the University of Alaska Fairbanks. To think that the 15,000 vessels that currently transit the Suez Canal each year are going to switch soon and join the two dozen now working the Arctic passage is “nuts,” he says. But the Northern Sea Route “could be a seasonal supplement.”

That’s all that Stålsett says he needs to make his port and railroad vision come true in Kirkenes, the first European port where a Chinese vessel traversing the Arctic could berth. Even if just 10 percent of China’s seaborne exports pass through the town by 2030, that would mean “an enormous increase in Arctic shipping,” he points out. “We need to start building tomorrow.”

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It is hard to imagine how dramatically such a project would transform Kirkenes, a snow-muffled utilitarian town tucked between barren hills and the sea. The community grew up around the now-defunct iron-ore works, but today half the residents work in government administration.

Tourism is the biggest local industry, serving the passengers from the coastal cruise ship. In winter, which is most of the time here, visitors line up to take king crab “safaris.” Guides zip them by snowmobile across frozen fjords, drill holes in the ice, set traps, and then pull up the mammoth creatures, which everyone later eats, one succulent leg at a time. Others stay in the hotel sculpted seasonally entirely out of ice and snow, an experience that local boosters – perhaps with too much marketing time on their hands during the endless winter nights – call very “snice.”

The scruffy port of Kirkenes does a steady business servicing Russian trawlers and the Chinese seismic exploration vessels that are seeking oil for Russian companies. The town of red, white, and mustard-colored homes sits just nine miles from the Russian border and includes among its inhabitants the occasional reindeer herder.

The idea of becoming a global trade hub appeals to everybody in Kirkenes, says Terje Sirma-Kristiansen, who works on a nearby military base. “It would mean growth now that the mine has closed,” he says. “We can’t live from hunting anymore.”

While the town may experience a boom, so, too, will the cobalt waters off its coast. Russia, for one, plans to ship more and more of its mineral wealth along the Northern Sea Route to international markets.

The Eduard Toll, the vessel that made a historic winter passage last January, serves Yamal LNG, a $27 billion liquefied natural gas plant on the Yamal Peninsula in Siberia that Mr. Putin opened in December. The ship is one of four such tankers; 11 more are on order, their reinforced hulls enabling them to steam east or west, to Asia or Europe, throughout the year. By 2023, they will be leaving the newly built port of Sabetta at the rate of more than one ship a day.

And it is not just a matter of hydrocarbons. The Arctic contains a wealth of resources that are “absolutely crucial to major economies in the 21st century,” according to Ólafur Ragnar Grímsson, a former president of Iceland who now chairs the Arctic Circle, a forum for debate on regional issues.

In Russia, Norilsk Nickel is the world’s largest producer of nickel and palladium and a big supplier of platinum and copper. On Canada’s Baffin Island, one of the world’s highest quality iron-ore mines began shipping in 2015. Chinese and Australian firms are preparing to mine zinc, uranium, and rare-earth metals in Greenland.

Finnish, Japanese, Norwegian, Russian, and Chinese officials are discussing laying a 6,500-mile fiber-optic cable across the Arctic Circle by as early as 2020. The region is rich in geothermal and wind energy potential.

In more traditional terms, the US Geological Survey has estimated that about 30 percent of the world’s undiscovered gas and 13 percent of the world’s undiscovered oil may be found within the Arctic Circle. Most of those reserves lie on land or inside one country or another’s maritime exclusive economic zone. But that hasn’t stopped Denmark, Canada, and Russia from filing rival competing claims to parts of the Arctic seabed that each argues is an extension of its continental shelf.

The Kremlin claims almost half of the Arctic Ocean floor, and a patriotic Russian adventurer once descended in a mini-submarine to plant a titanium Russian flag on the seabed directly beneath the North Pole.

The US, though a polar nation because of Alaska, can press no such territorial claims, since any petitions will be decided by a commission under the United Nations Convention on the Law of the Sea, which Washington has not ratified.

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These varied resources and their newfound accessibility have invested the Arctic with unprecedented geostrategic importance. Russia, whose territory makes up more than half of the Arctic Ocean’s coastline, is best placed to benefit. After two decades of neglect in the wake of the Soviet Union’s collapse in 1991, Moscow has been making some decisive moves in the region.

“The wealth of Russia will grow with the expansion into the Arctic,” Putin said at last December’s annual Kremlin press conference.

Already, the Arctic accounts for 20 percent of Russia’s exports and 10 percent of its gross domestic product. The LNG plant at Sabetta, and a sister plant due to come on line within five years, will make Russia “the new Qatar,” according to Novatek, the private Russian company leading the project.

Putin is reestablishing the military control over the Arctic that had lapsed for two decades. In recent years, the Russian Army has rebuilt or expanded six forward bases on Arctic islands and is equipping them to host tactical combat aircraft, according to a Danish Defence Intelligence Service report.

The Arctic is also home to most of Russia’s strategic submarine fleet and to its fleet of icebreakers – the largest in the world. The Kremlin has ordered two ice-breaking warships, armed with cruise missiles, for delivery in 2020.

“To what end is opaque,” Adm. Paul Zukunft, the US Coast Guard chief, told Defense & Aerospace Report last December. “Is it to make this an area that the United States would be denied access? We have to assume that the answer to that question ... is yes.”

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China is no less ambitious with its Arctic plans. When five Chinese Navy vessels sailed into US territorial waters off Alaska in September 2015, they were not threatening force but sent a very clear message: that Beijing wants to become a polar great power. President Xi Jinping has been working assiduously ever since to advance that goal, which he first declared in 2014.

China has branded itself a “near Arctic state” (although Beijing is closer to the Equator than to the North Pole) and has stepped up its Arctic activities dramatically over the past decade. Beijing’s strategy fits a grander vision than that of most Western governments: Along with the deep seabed and outer space, the North and South Poles are defined as China’s “new strategic frontiers” in a 2015 national security law.

“China now has more money to spend on new polar infrastructure, such as bases, planes, satellite installations, and icebreakers, than any other state,” says Anne-Marie Brady in her new book, “China as a Polar Great Power.”

The time and money that China has devoted to Arctic scientific research has earned it observer status on the Arctic Council, the intergovernmental forum for cooperation among Arctic states.

Beijing has won recognition as a legitimate business partner with its heavy investment in the region: Chinese companies own 30 percent of Yamal LNG, and Chinese firms are making billion-dollar investments in biofuel projects in northern Finland and mining ventures in Iceland and Greenland. Chinese shippers are testing Arctic routes for their commercial viability.

“We are seeing an incredible uptick in Chinese economic and commercial activity,” says Ms. Conley.

In its white paper setting out policy for the region, Beijing focused on shipping and energy and mineral exploration, as well as fisheries and tourism. Behind those priorities, however, lie deeper geopolitical ambitions – notably becoming a great maritime power. “China’s thinking on the polar regions demonstrates a level of ambition and forward planning that few, if any, modern industrial states can achieve,” writes Dr. Brady in The Polar Journal, of which she is the executive editor.

China’s white paper was released in January, just three days after Stålsett, Kirkenes’s development director, came out with his study on a rail line to the Norwegian town. He couldn’t believe his good fortune. Here was a major Chinese policy statement whose sections on Arctic shipping suddenly gave him a whole new level of credibility. Geologists from the Norwegian Ministry of Transport and Communications are already running tests on the proposed site of a new shipping port in Kirkenes.

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No such grand infrastructure projects are under way in the US Arctic. None, in fact, have been built since the trans-Alaska oil pipeline was commissioned 40 years ago. “We are an Arctic nation,” says Dr. Brigham, “but we lack infrastructure.” All the practical stuff, such as docks, ship repair facilities, and salvage operations, “is missing,” he adds.

The US certainly has plenty of military assets in the Arctic, with airbases, ballistic defense installations, and nuclear missiles at Thule in Greenland and Fort Greely in Alaska. Its nuclear submarines prowl beneath the Arctic ice. In March, US forces staged exercises testing new under-ice weapons systems.

But since the cold war ended, the US Navy has focused more on the Pacific than the Arctic, even though the region “is vitally important to our interest” for economic and national security reasons, former Secretary of State Rex Tillerson told researchers at the Wilson Center, a think tank in Washington, last November. “We’re late to the game.”

Mr. Grímsson, the former Icelandic president, jokes that during his years in office, from 1996 to 2016, he visited Alaska more often than any of his US counterparts.

The US Coast Guard has only one fully functional icebreaker. For eight months of the year, no US Navy surface vessels can function in Arctic waters.

The Russians “have got all their chess pieces on the board right now, and right now we’ve got a pawn and maybe a rook,” Zukunft lamented last year at an event hosted by the CSIS. “If you look at this Arctic game of chess, they’ve got us at checkmate right at the very beginning.”

Congress has now approved the funds to build a new icebreaker, due to launch in 2023, but the problem, says CSIS expert Conley, is that Washington “does not have a long-term strategic view of the Arctic, and a new icebreaker will not solve the policy deficit.”

Perhaps even more ominous for the US, China and Russia are cooperating closely in the region. The Arctic could become a testing ground for a challenge to Washington and the prospects for a new, more multipolar world order.

“That is a very powerful development,” says Arild Moe, an Arctic affairs analyst at the Fridtjof Nansen Institute in Oslo. “Stronger relations between Russia and China could affect the international power balance.”

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One reason for all the jockeying in the region is that no single rule book exists to oversee everyone’s ventures. Unlike Antarctica, which is governed by international treaty, the Arctic is regulated by an incomplete and ad hoc patchwork of institutions, treaties, and agreements.

“Never before have nations faced the challenge of building a rules-based system for an area the size of Africa ... that plays such a crucial role in the global climate,” says Grímsson.

Yet nations are finding ways to work together. Strikingly, nine countries and the European Union agreed last December to ban fishing in the high seas of the Central Arctic Ocean for at least 16 years. That will allow scientists to measure and track the region’s fish stocks and marine ecology before anyone has a chance to ravage them.

A similar mood of cooperation prevails in the Arctic Council, the intergovernmental forum concerned with sustainable development, where deals on scientific cooperation, oil spill management, and search and rescue protocols have been hammered out.

Several Arctic states have competing claims to the seabed, but the disputes have not turned ugly. 

Western relations with Russia and China on Arctic issues are generally cordial, too, diplomats say. Russia is interested above all in preserving the regional stability that will attract foreign investment, and China – aware of its rapacious reputation – “is very careful not to do anything that would incite suspicion or criticism from other nations,” says Grímsson.

But the stakes are high for nations whose welfare, from their weather to their wealth and security, depends on the Arctic. Sovereignty disputes are likely to break out as Arctic waters become more accessible and valuable as trade routes and resource reserves. Nations are unlikely to always agree on how far environmental safeguards should limit mining and drilling.

Such risks are not enough to dim the visionary glint in Rafaelsen’s eye. As he looks out from his office onto Kirkenes’s quiet, snowbound streets, the mayor with the white goatee and affable demeanor sees a town that will be transformed. “If this all works,” he says, “it will be a game changer for world transport. And it will mean a completely new Kirkenes. We have to be ready for this.”