Fears of Arctic conflict are 'overblown'

Climate change experts can take a more precise look at a what global warming is doing to the planet, shipping trade routes once considered unthinkable are now possible, and governments and businesses are in thrall to the potential exploitation of coal, iron, rare earths and oil.

The interest is reflected in the growing list of those wanting to have a foot in the Arctic council, a forum of eight countries with territory in the polar region.

While the US, Denmark, Iceland, Finland, Norway, Sweden, Russia and Canada form the council, the EU commission, China, India, South Korea and Japan have all expressed an interest in having a permanent observer status.

"The Arctic has become a new meeting place for America, Europe and the Asia Pacific," says Damien Degeorges, founder of the Arctic Policy and Economic Forum.

During a recent conference on Arctic shipping routes in the European Parliament, Degeorges noted that "China has been the most active by far in the last years."

He points to its red-carpet treatment of politicians from Greenland, a territory that recently got full control over its wealth of natural resources. Bejing also cosied up to Iceland after the island's financial meltdown. The two undertook a joint expedition to the North Pole and the Chinese have the largest foreign embassy in Reykjavik.

Meanwhile, South Korea's president visited Greenland last year and shipping hubs like Singapore are holding Arctic conferences.

The interest is being spurred by melting icebergs.

Last year saw a record low of multi-year ice - permanent ice - in the polar sea. This means greater shipping and mineral exploitation potential. There were 37 transits of the North East Passage (NEP), running from the Atlantic to the Pacific along the top of Russia, in 2011. This rose to 47 in 2012.

For a ship travelling from the Netherlands to China, the route around 40 percent shorter than using the traditional Suez Canal. A huge saving for China, where 50 percent of its GDP is connected to shipping. Russia is also keen to exploit the route as the rise in temperatures is melting the permafrost in its northern territory, playing havoc with its roads and railways.

According to Jan Fritz Hansen, deputy director of the Danish shipowners’ association, the real breakthrough will come when there is a cross polar route. At the moment there are are two options - the North East Passge for which Russia asks high fees for transiting ships - or the much-less developed North West Passage along Canada.

His chief concern is that "trade up there is free. We don't want protectionism. Everyone should be allowed to compete up there."

And he believes the biggest story of the Arctic is not how it is traversed but what will be taken out of it. According to the US Geological Survey (2009), the Arctic holds 13 percent of undiscovered oil and 30 percent of undiscovered gas supplies.

Greenland is already at the centre of political tussle between the EU and China over future exploitation of its rare earths - used in a range of technologies such as hybrid cars or smart phones.

"The biggest adventure will be the Arctic destination. There is a lot of valuable goods that should be taken out of nature up there," he said.

This resource potential - although tempered by the fact that much of it is not economically viable to exploit - has led to fears that the Arctic region is ripe for conflict.

But this is nonsense, says Nil Wang, a former Danish admiral and Arctic expert.

Most resources have an owner

"There is a general public perception that the Arctic region holds great potential for conflict because it is an ungoverned region where all these resources are waiting to be picked up by the one who gets there first. That is completely false," he said.

He notes that it is an "extremely well-regulated region," with international rules saying that coastal states have territorial jurisdiction up to 12 nautical miles off their coast.

On top of that is a further 200 nautical miles of exclusive economic zone "where you own every value in the water and under the seabed."

"Up to 97 percent of energy resources is actually belonging to someone already," says Wang.

He suggest the actors in the region all want to create a business environment, which requires stable politics and security.

But he concedes there are "risk factors." These include "ambiguous communication" (so that there is an impression of a security conflict), and possible fishing wars as fish stocks move further north because of rising temperatures into areas with no fishing rules.

A fall-out in relations between the China and the US could also impact the Arctic region but the "Arctic itself will not create conflict."

As for the EU, it has been seeking to gain a foothold in the region. It spends millions of euros each year on research, environmental and social programmes in the Arctic area.

A European Commission strategy paper last year noted that giving the commission permanent observer status - it applied in 2008 - in the Arctic Council would allow the EU "to gain detailed understanding of the concerns of Arctic partners."

But Wang reckons it has little chance for now.

"Russia is the biggest boy in the school yard. And in this case you don't normally invite anyone from a neighbouring school yard that is bigger than you. And Canada is more or less of the same opinion," he noted.