North to Alaska: Warming Up to New Realities
Forget the proposed AK gasline; it will be obsolete before the first length of pipe is laid. Energy and maritime sectors are seemingly poised to take advantage of new opportunities.
It has been a busy two weeks for the folks up in Alaska. And, while I’m not suggesting that you immediately jump on board the Al Gore bandwagon, he actually may be onto something when, at the U.N. climate conference, he suggested that the Arctic Ocean may be nearly ice-free in the summertime as early as 2014. Separately, others, including a U.S. government agency, are sticking to their projections of a vanishing ice cap by the year 2030. Still, this and many other recent developments are making it increasingly clear that the long-awaited natural gas pipeline in Alaska will probably never be built. That’s got nothing to do anymore with lawsuits and politics.
With the makeup of the frozen north polar sea slowly giving way to seasonal ice and the U.S. National Oceanic and Atmospheric Administration predicting that Arctic summers could be almost ice-free within 30 years, just about everyone is looking at the viability of new shipping lanes in the Arctic. The impact of the changing landscape on the North Slope of Alaska could therefore potentially impact domestic energy markets, marine transportation and a host of other related industries. From where I sit, this will happen a lot sooner than anyone can negotiate to build another pipeline to Valdez, or as some are suggesting, all the way to the lower 48 through Canada.
The pace is quickening on many fronts. Just this week, the Minerals Management Service (MMS) conditionally approved plans by Shell Oil Co. to drill three exploratory wells next year off Alaska's northwest coast. Environmentalists, of course, are harshly critical of the move, but MMS also seems to have done its homework. The 132-page environmental assessment posted on the MMS web site is ample testimony to that. In the meantime, a bill (S. 2849) has been introduced by Alaska Senator Murkowski which would require a study and report on the feasibility and potential of establishing a deep water sea port in the Arctic to protect and advance strategic United States interests within the evolving and ever more important region. Such a deep water port might be the first step to facilitating tanker traffic in and out of the region in the not-too-distant future. All of that comes on the heels of the nation’s new Arctic Policy called for by Coast Guard Commandant Thad Allen and introduced earlier this year.
On the commercial side of the ledger, the American Bureau of shipping has established what it calls its Arctic Technical Committee, which has been chartered to evaluate and review proposed changes to the ABS Rules and Guides that pertain to Arctic and cold weather operations. This isn’t the first foray into cold weather operations by ABS and follows a 2008 cooperative effort between ABS, ConocoPhillips, Sovcomflot, and Samsung Heavy Industries (SHI), who jointly participated in a pioneering study measuring the effect of ice loads on Arctic class shuttle tanker performance. In fact, an updated and expanded edition of the ABS Guide for Vessels Operating in Low Temperature Environments has reportedly been prepared, based on widespread input from industry, and is expected to be released in early January.
Commerce and trade in the Arctic regions isn’t just a concept. It’s here. Earlier this year, two German cargo ships successfully navigated across Russia's Arctic water, transiting from South Korea to Siberia without the assistance of icebreakers. As reported last September, the two ships made the cost-saving voyage – trimming almost 4,000 nautical miles off traditional routes – because of the reduction in the polar ice cap due to global warming. And, if Al Gore and his friends are right, this sort of voyage, widely hailed as a mere curiosity at the time, could become routine in a very short period of time.
On the domestic front, the changes and trends in the Arctic region could have an almost immediate and profound effect of marine transportation, energy and the nation’s economy itself. That’s good news for the maritime industry, energy producers and consumers alike. I don’t think anyone can truthfully say what 2010 will bring for the global economy and the hoped-for recovery of the maritime shipping sectors. On the other hand, it is a safe bet that things are about to heat up (no pun intended) in Alaska and other Arctic regions. Oh – and I almost forgot – we’re not going to need the new pipeline. It turns out there’s an easier and more flexible way to move energy from the North Slope. – MarEx
Joseph Keefe is the Editor in Chief of THE MARITIME EXECUTIVE. He can be reached with comments on this editorial at [email protected]. Join the Maritime Executive ‘Linked In’ group at by clicking http://www.linkedin.com/e/gis/47685>