ARCUS Arctic Research Seminar in D.C. this Friday

A gravel pit along the Inuvik-Tuk Highway. Photo: Mia Bennett/March 2017.

A gravel pit along the Inuvik-Tuk Highway. Photo: Mia Bennett, March 2017.

This Friday, April 14, I’ll be giving an Arctic research seminar at ARCUS (the Arctic Research Consortium of the U.S.) in Washington, D.C. It’ll be a lunchtime talk from 12:00 pm – 1:00 pm. The title is, “Development on Ice: Social and Economic Impacts of Arctic Transportation Infrastructure.” In my seminar, I’ll discuss the mechanisms connecting northern communities to regional and global transportation networks. I’ll share insights from my research and fieldwork throughout the Arctic, including in northeast Russia and Canada’s Northwest Territories. I’ll also include some updates based on my trip at the end of March to Inuvik and Tuktoyaktuk, where construction has nearly wrapped up on the first public highway in North America to the Arctic Ocean. This highway will replace the ice road that connects the two communities together every winter. So if you want to drive on the ice to the frozen Arctic Ocean, this month is your last chance.

More information about the ARCUS seminar, including a link to registration, is available here. For those who can’t attend in person, the webinar will also be streamed online.

Seminar location
ARCUS D.C. Office
1201 New York Avenue
NW Washington D.C.

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The last ice road from Inuvik to Tuktoyaktuk. Photo: Mia Bennett, March 2017.

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China’s One Belt, One Road project comes to the Arctic

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The frozen Amur river separating Russia and China between the cities of Blagoveshchensk and Heihe. The yellow sign in the frozen river warns onlookers not to cross. Photo: Mia Bennett, 2016.

I’ve just published a new article in the peer-reviewed journal Area Development and Policy called “The Silk Road goes north: Russia’s role within China’s Belt and Road Initiative.” The article is available to read online here (paid firewall; but a copy is also available on academia.edu).

The Belt and Road Initiative (BRI) is the name that the Chinese government is using to describe what the media has referred to as the “One Belt, One Road” strategy. The policy envisions the construction and rolling out of land and maritime transportation networks to connect China to the markets and resources of the Eurasian continent while also providing an outlet for China’s excess capacity in steel.

Although counties in Central Asia like Kazakhstan receive the bulk of the attention in terms of how they fit into BRI, Russia also forms an important transportation nexus within the project. The Russian Arctic in particular has attracted BRI planners’ interest, for the region is rich in oil and gas. The seasonally ice-covered Northern Sea Route could also potentially offer a shorter shipping lane between China and Europe than the Suez Canal, enabling the creation of a so-called “ice road” within the larger network of maritime and land routes that constitute the new Silk Road.

Trade and transportation connections between Russia and China are nothing new. In the article, I briefly explore the history of commerce and transport links between the two counties. These were formalized in 1689 by the Treaty of Nerchinsk, which delineated China and Russia’s shared border along the Amur River. In the three centuries that have followed, the two countries have waffled between awkward friendship and all-out enmity nearly exploding into war.

1891: Russia builds the Chinese Eastern Railway

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Chinese workers constructing the Russian-financed Chinese Eastern Railway in China in the 1890s. Photo: Wikipedia Commons/Creative Commons 2.0 License

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An early 20th-century map of the Chinese Eastern railway.

In 1891, the Russo-Asiatic Bank was established in St. Petersburg partly in order for the Russians to build railways in China such as the Chinese Eastern Railway. This railway allowed Russia to cut across Manchuria (northeast China) to the city of Vladivostok on the Pacific Coast, shortening an all-Russia route by approximately 500 miles. As I explain in the article, “the Russian state ultimately held supervisory power over the railway and had the unusual right to transport Russian military forces along it, while the Russo-Asiatic Bank could build subsidiary railways, telegraph lines and mining explorations.”

In the 1950s under Joseph Stalin, the Soviet Union continue to provide material and technical assistance to the Chinese, who were yearning to industrialize quickly under Chairman Mao Zedong. This program came to a halt with the Sino-Soviet Split in 1960, which endured until 1989. The two communist countries of China and Russia had fallen out over differences in ideology, and Soviet engineers were sent home.

Today: China lends know-how and capital to Russia

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The city of Yakutsk, where Chinese state-owned company Sinohydro may one day build a bridge to connect what is one of the world’s most isolated cities to Russian road and rail networks.

In the 21st century, China and Russia have had reversals of fortune. China’s economy is booming while Russia’s is faltering as the bottom continues to fall out from under the price of oil. The Chinese Politburo is now looking to construct railroads across Russia in order to gain access to its resources and markets in Europe. As a result, Chinese companies are providing capital and expertise to projects like the Moscow-Kazan high-speed railway and, importantly for the Arctic, the Yamal Liquefied Natural Gas (LNG) project. In one of the northernmost reaches of Russia on the Yamal Peninsula, the Silk Road Fund, a state-run investment vehicle associated with BRI, has lent US$12.1 billion to the Yamal LNG project in exchange for a 9.9% stake. If and when Yamal LNG comes onstream as planned in 2017, LNG will be shipped to Asia in summer and Europe in winter via South Korean-built ice-class tankers.

The Silk Road Fund’s loan to Yamal LNG represents China’s first investment in Russia’s oil and gas sector and may signal a shift away from previous energy agreements between the two countries. These were made more with a view towards Russia serving as an energy supplier rather than as a place in which China was willing to actually make investments in energy. If Yamal goes well, then it is possible that the Chinese government, possibly under the auspices of the Silk Road Fund or the Asia Infrastructure Investment Bank, may make future loans to projects in the Russian Arctic. In Yakutsk, Chinese-state owned company SinoHydro, a hydropower engineering company, may build a long-awaited bridge across the Lena River that would grant the city of 300,000 people year-round access to Russia’s rail and road networks. China also has the knowledge to build railways on permafrost, as it did when it built the Qinghai-Tibet Railway, completed in 2006.

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The Tibet-Qinghai Railway as it crosses over permafrost-laden ground. Photo: Wikipedia Commons/Creative Commons 2.0 License

As U.S. and E.U. sanctions on the Russian energy sector continue with no end in sight, China may have an opportunity to rewrite the rules of Russia’s Arctic development. Already in Africa, Chinese state-owned firms have exercised a significant effect on development in countries like Zambia and Tanzania. Beijing’s goals in Africa have been described by UCLA sociologist Ching Kwan Lee as oriented towards the creation of long-term access to resources and political influence rather than a sole focus on short-term financial gain, as is characteristic of global private investment. Given the tumultuous nature of the Sino-Russian relationship, Yamal could end up becoming something that the Silk Road Fund comes to regret. But if China’s involvement in African development is any sign, in the Arctic, the dragon is here to stay.

Read “The Silk Road goes north: Russia’s role within China’s Belt and Road Initiative” here.

What does the sudden closure of Canada’s only Arctic deepwater port mean for Arctic shipping?

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The Port of Churchill has seen better days. Photo: Flickr/Creative Commons License, Martin Lopatka.

Arctic shipping is not off to a good start this season.

On July 25, the privately owned management company, Omnitrax, announced that it was shutting down the Port of Churchill, giving some 40 workers the dreaded two-week notice. Shipping usually runs from late July to early November, meaning that this year’s shipping season will barely even get started before being drawn to an abrupt close.

Churchill exports grain, minerals, and timber from Manitoba and Saskatchewan while importing ore, minerals, steel, and petroleum products for markets in Central and Western Canada and the U.S., according to Omnitrax‘s website.

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Palmer, F. Hudson Bay Route Possible Port Terminal at Churchill [map]. In: F. Palmer. Report on the Section of a Terminal Port for the Hudson Bay Railway. London: Harrison & Sons, Ltd., 1927. Image Courtesy of University of Manitoba : Archives & Special Collections, from Flickr/Creative Commons, Wyman Laliberte.

The port has a storied history, too. In the 1930s, the Canadian government built the Port of Churchill and the Hudson Bay railroad to improve import and export possibilities for Western Canada, promote northern industrial and community development, and enhance Canada’s northern sovereignty. Somewhat under the radar, it also played its part in improving relations with Warsaw Pact states during the Cold War, too. The port exported wheat and barley to Poland and the Soviet Union in the 1970s and 1980s, as this Montreal Gazette newspaper clipping from 1981 reports.

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In 1992, building on these little-known but longstanding trade ties, Canada and Russia signed the Arctic Bridge Agreement to promote shipping between Murmansk, a port city in northwest Russia, and Churchill via the Barents and Norwegian Seas and Davis Strait between Greenland and Canada. According to the plan, Murmansk would export mineral and timber products, and Churchill would continue shipping out grain.

That plan never really came to fruition. Today, concentrating on the decidedly unglamorous world of bulk and grain shipments, the Port of Churchill doesn’t rank high on many Arctic cruise itineraries. Most visitors come by rail or air rather than by sea. Located on the southwest shores of Hudson Bay, the town offers one of the closest and most accessible Arctic experiences for the many Canadians who live in central Canada and Ontario. Fluffy white polar bears, spawning, chubby beluga whales, and the colorful northern lights are the main draws for tourists.

At the bottom end of Hudson Bay, however, Churchill is far from the Northwest Passage. As such, it likely won’t benefit from any increase in cruise tourism along the Canadian shipping route. Crystal Cruises’ landmark luxury Arctic voyage this summer, for instance, will call on Uluhaktok (Northwest Territories) and Cambridge Bay and Pond Inlet (Nunavut), but not Churchill, Manitoba.

A micro and macro-level shock

The closure of the Port of Churchill comes as a blow for the local economy. It’s the largest single employer in the town of 800 people, and approximately 50 port employees have received pink slips.

And at a macro level, the port’s shuttering may deliver an even bigger shock to plans to build out Northern Canada’s transportation infrastructure and develop the regional economy. For all the talk of building deepwater ports in Canada’s Arctic from Tuktoyaktuk to Nanisivik it appears that the Port of Churchill, North America’s sole existing deepwater Arctic seaport, is not even viable. Why would companies or the Canadian government want to invest in building additional deepwater ports in the Arctic when they can’t even keep the only operating one afloat?

Still, it will be surprising if the Canadian government lets the port be closed for good. Given its high symbolic status, it’s possible that Prime Minister Justin Trudeau’s government may move to nationalize the port and buy the port back from Omnitrax,  one of the largest private railroad and transportation companies in North America. Omnitrax will be able to keep chugging along even with the Port of Churchill’s closure given its continental-wide operations (a map of its ports and railroads is available here), and it has actually only operated the port for fewer than 20 years. Previously, a crown corporation owned by the Canadian government called Ports Canada operated the port. The government also sold the Hudson Bay Rail Line that extends to the Port of Churchill to Omnitrax in 1997.

Re-nationalizing the port may reveal that a great deal of northern infrastructure, and perhaps even Arctic shipping, simply isn’t economically viable in this day and age – even with climate change and longer shipping seasons. On land, thawing permafrost poses problems for the railroad leading up to Churchill. The issue of shifting ground is common throughout much of the Arctic, making intermodal transportation (smoothly integrating shipping, roads, and rail) more complicated than in the South. And at sea, even though there is less ice in places like the Northwest Passage, there isn’t much more demand in northern markets for goods, while growth is better in the more southern reaches of Asia, Europe, and the Americas.

Arctic deepwater ports: a house of cards?

The dismal economic viability of a lot of Arctic infrastructure means that it is important to carefully scrutinize plans such as the recently announced memorandum of understanding signed between the Government of Nunavut and the Kitikmeot Inuit Association (KIA). They wish to construct a 227-kilometer road to a proposed port at Grays Bay in the Northwest Passage. The road could potentially open up a number of mining regions and provide all-weather access to the Northwest Territories’ diamond mines.

Together, the Government of Nunavut and KIA hope to lobby for federal funding to cover three-quarters of the port’s $487 million price tag – over $365 million, in other words. This would be even more money than the $300 million spent on the 140-kilometer highway from Inuvik to Tuktoyaktuk, in the Western Arctic. Construction on that road is nearly finished, and locals and government officials alike there are anticipating a deepwater port to follow. Some have even taken to calling the road “the world’s longest boat launch,” suggesting that even if Tuktoyaktuk erodes away into the ocean as is already happening, there may still be a port up there.

But when Arctic shipping appears to be drying up in Canada – first with the bankruptcy of Northern Transportation Limited Company, which provides resupply by barge to communities in Northern Canada, and second with the closure of the Port of Churchill – spending hundreds of millions of dollars on roads to the ocean with no real hope for viable ports in the near future seems foolhardy. Even though the climate is changing, the philosophy, “Build it and they will come,” still doesn’t necessarily apply in the Arctic.

Decades-long concerns

Today, the Port of Churchill only ships two percent of Canada’s grain exports. Todd MacKay, Prairie Director for the Canadian Taxpayers Federation, said it well: “If customers are choosing other ports to ship grain, the reality is that more taxpayer dollars won’t solve the problem.” Throwing more public funds to construct big-ticket roads and ports in the Arctic will not result in Hong Kongs, Singapores, or  even Reykjaviks sprouting up from the tundra, no matter the appeal of glossy brochures promoting Northern development.

This has been true even prior to the current blitz by members of the media, governments, and corporations who are heralding a new era in Arctic development thanks to climate change. In 1994, politicians were already worried about the Port of Churchill’s viability and shelling out of money on the Arctic Bridge project between Murmansk and Churchill. The following is a transcript from an oral question period from the Legislative Assembly of Manitoba in 1994 (full transcript available here).

Mr. Daryl Reid (MLA – Transcona, Manitoba): I would like to ask this government: In light of the fact that we have spent taxpayers’ dollars here in the order of several hundreds of thousands of dollars of taxpayers’ dollars on the consultants for this Arctic Bridge agreement, what do we have to show for those hundreds of thousands of dollars that we have spent?

Hon. Albert Driedger (Acting Minister of Highways and Transportation): Mr. Speaker, the initiative was initially taken in terms of trying to see whether we could assist CN, the Port, everybody in terms of doing more trade through the Port of Churchill. That is why the Arctic Bridge concept was developed. The reports have been coming forward. We are still hopeful that there is going to be activity taking place.

The federal minister Axworthy has said that he himself will also be working in that direction to see whether we can get new enhanced business coming through the Port of Churchill.

So it is not a matter that we are trying to keep the Port of Churchill down. We have been and will continue to do everything we can in terms of enhancing it, including the aerospace thing, the national park out there. If we can get some activity going through the Port of Churchill, I think we have a positive thing going.

Over the years, it seems like polar bears are actually the main thing that have kept Churchill’s economy afloat. The development of the local tourism industry, as Ed Struzik detailed in a story for OpenCanada recently, has helped Churchill from being a one-trick pony completely reliant on the port. Now that the port’s future is up in the air, Churchill may turn into a one-trick polar bear.

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Polar Bears in Churchill, Manitoba. Photo: Flickr/Creative Commons, Gary Ullah.