U.S. regulator wants more influence over Arctic shipping

More investment in ice-breaking vessel capacity will be needed if the United States is to keep up with the increasing presence of Russia and China on Arctic trade routes, according to the U.S. Coast Guard’s (USCG) latest strategy assessment.

In its “Arctic Strategy Outlook” released on April 22, the agency asserted that since its last Arctic assessment in 2013, increased investments by and competition from Russia and China have coincided with decreasing amounts of permanent sea ice and longer seasonal windows of open trade lanes.

“The interaction of these drivers has made the Arctic a strategically competitive space for the first time since the end of the Cold War,” the USCG stated.

Polar sea routes are coveted for their ability to substantially reduce transit times – thus saving fuel and other operating costs for vessel owners – compared with transits through the Suez Canal. Shanghai to Rotterdam using the Northern Sea Route (NSR), for example, can take two weeks less time than using the Suez route, according to the report.

Cargo tonnage transported on the NSR since the USCG’s last assessment has doubled due to significant shipments of natural gas and oil products from Russia’s Yamal liquefied natural gas (LNG) terminal, using special “ice-class” LNG tankers Russia built specifically for that operation.

Russia is also expanding its icebreaker fleet, which is already the world’s largest, the USCG reported. Russia is also rebuilding or expanding other Arctic assets such as ports, air bases, commercial hubs, search and rescue operations, and weapons systems.

China has been increasingly active in the region since 2013 even though it borders don’t extend to the Arctic Ocean. Early in 2018 it announced its “Polar Silk Road” initiative – an extension of its One-Belt, One Road initiative – with a range of infrastructure activities to include ports, undersea cables and airports.

“These plans are supported by the construction of a second multi-mission ice-capable ship, the announcement that it will construct a nuclear-powered icebreaker, annual deployments of research vessels into the Arctic, and investments in vulnerable communities,” the USCG assessment pointed out. But the agency warned that these expansion plans “could impede U.S. access and freedom of navigation in the Arctic as similar attempts have been made to impede U.S. access to the South China Sea.”

An effective response to these competitive threats won’t be easy, as the USCG acknowledges in the strategy assessment that it doesn’t yet “have the capability or capacity to assure access in the high latitudes.” To close the gap there will need to be “persistent investment” in capabilities and capacity, which includes building a Polar Security Cutter (PSC), which would be the first U.S. heavy ice-breaker built in decades.

PSCs, according to the Coast Guard, would not only help keep the United States ready defensively in both the Arctic and Antarctic but would provide vessel escort services to help move freight and personnel. Later this year the agency plans to award a detailed design and construction contract to build three PSCs, with $675 million in initial funding coming from the 2019 federal budget. The FY 2020 budget proposal released earlier this year includes a request of $35 million to keep the PSC program moving.

The strategy also calls for improving how it collects data in the Arctic to help monitor marine conditions, climate, maritime activity and threats.

“Ultimately, the Coast Guard must lead in converting this information into actionable and reliable knowledge that can be distributed to all appropriate stakeholders,” the strategy asserted. “Increased availability of all-source intelligence collection and enhanced understanding of maritime trends, threats and challenges in the region will enable the Coast Guard to operate more effectively, make more informed resource allocations and enhance national security.”