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Globalizing the Arctic Economy

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World Policy Journal

on 21 November 2016

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Transcript of Globalizing the Arctic Economy

Fur Trade
From Siberia to Alaska and Northern Canada, the fur trade developed in
response to the demands of
European markets.

Supply & Demand
Arctic indigenous peoples harvested a variety of furs in exchange for European goods such as tea, alcohol, tobacco, sugar, and guns.
Great rivalry ensued.
The Hudson’s Bay Company, Revillon Frères, Northwest Company, and the
Russian-American Company were among the trading companies competing for profits and control of the fur trade.
Furs from Siberia, particularly sable,
were essential to Russia as a source of foreign exchange from the 15th century onward.
In North America, French explorers in the 16th century, followed by the British in the 17th century, developed elaborate trading systems that ensured a steady supply of furs to meet growing European demand.

Whaling was also a draw for international markets. Lamp oil, lubricants, and a pre-rubber product used for items such as corsets were produced from whale.
Pre-Industrial Era
Industrial Era
Industrialization introduced new demands as nations looked north to supply minerals and oil & gas to support industrial activity and the production of wealth.
Among resources sought for industrialization:

Gold and copper from Alaska; iron ore from Sweden; gold, silver, and lead from the Canadian Yukon and radium in the Northwest Territories; gold from Siberia; and though not a mineral, timber was sought for the pulp and paper industry
Alaska Oil & Gas
The discovery of the Prudhoe Bay Oil Field in 1968 triggered the arrival of international oil companies as well as wealth for the state of Alaska and for North Slope Inuit.

Russia (then-USSR)
Oil & Gas
The first Arctic oil field, Chibyusko, was discovered in 1930 in Komi Republic, followed by the Yareag oil field in 1932.

Minerals and Oil & Gas
Global Era
Together with the founding of the Arctic Council in 1996, which signaled political cooperation, dramatic indicators of change have boosted globalization of the Arctic economy.
IcelandAir expands transatlantic flight network from 21 routes in 2009
to 41 in 2016.
IcelandAir Promotes Free Stopover
Shipping Potential Overstated
Despite the retreat of sea ice, hazardous weather and ice conditions render mass trans-Arctic shipping unlikely, dashing near-term hopes of shorter alternatives to the Panama or Suez canals.

Arctic Climate Impact Assessment (ACIA)
2004 - The ACIA reported that the Arctic is warming at twice the rate as the rest of the world, a trend projected to continue resulting from GHG emissions. The report also stated that Greenland Ice Sheet melt broke all records in 2002, only to be outdone in future years, the highest melt years listed as 2012, 2010, and 2007.
Russia Plants Flag on North Pole
2007- Russia submerges two mini-submarines to the floor of the Arctic Ocean. By planting the nation’s flag on the North Pole, Russia symbolically lays claim to an abundance of oil and gas reserves thought to exist on the Lomonosov ridge.

USGS Circum-Arctic Resource Appraisal

2008 - According to the U.S. Geological Survey, the Arctic holds
an estimated 13 percent (90 billion barrels) of the world's
undiscovered conventional oil resources and 30 percent (44 billion barrels) of its undiscovered conventional natural gas resources.
Eighty-four percent is expected to occur in offshore areas.

story starts
long, long ago

Since the 16th century, natural resources
- both renewable and non-renewable -
motivated European explorers and traders to navigate the Arctic in search of commercial expansion, as did the desire for a northern route to the ‘Orient.’

The past informs the present and future.
"This isn't the 15th century.
You can't go around the world
and just plant flags and say: 'We're claiming this territory'," bemoaned Canadian Foreign Minister Peter MacKay.

In 2016, led by French
pension investors and asset managers, a group of 19 investment firms called for
“an unlimited moratorium” on offshore drilling in the Arctic
Tourism overtakes fisheries to contribute 1/3 of foreign currency earnings.
1.8 million visitors predicted for 2016 to the island with only 333,000 inhabitants.
Tourism - Iceland

4,600 (approx.) cruise passengers visited between July & September 2016 - an increase of more than 1,000 from 2015, reported Monica Ell-Kanayuk, Nunavut’s minister of Economic Development and Transportation.

After the success of the 2016 Chrystal Serenity Arctic voyage, the cruise line plans to build three new ice-class
"expedition mega-yachts."
transits, however, have increased substantially, expanding import export markets between North American and Arctic countries including Norway, the Faroe Islands, Iceland, and Greenland.
An emphasis on oil & gas alone may cause a tendency to underplay the globalizing effects of other multinational business interests.
Hudson's Bay Company post on Lake Winnipeg, 1884
Revillon Frères Trading Post, Repulse Bay, Nunavut, Canada
A View of Whale Fishery, 1790, from Captain Cook's voyages. Archival Photograph by Mr. Sean Linehan - Treasures of the NOAA Photo Library
Alfred Edmund Brehm (1829-1884)
American Beaver: Brooklyn Museum
The Trading Store: Hudson's Bay Company Archives / PAM HBCA Photographs 1987/363-T-32/27 (N3912)
“The future of entire nations was
linked to the North’s ability to supply the resources required by
Chris Southcott
(source listed below)
Klondikers and their supplies at the US-Canada border on the Chilkoot Pass, 1898. Alaska Digital Archives
Location Prudhoe Bay Oilfield in North Slope Alaska
Location of Komi Republic
References and Suggested Reading
NSF picture of Yamal
by Eimskip’s CTG subsidiary
Image courtesy of Landsvirkjun / Askja Energy Partners
Iceland's proposed IceLink subsea power cable aims to connect renewable energy from the circumpolar north to Europe, assisting in GHG reduction goals. In addition to the routes mapped, extensions to Greenland & the Faroe Islands are under consideration.
Image courtesy of IcelandAir
Image courtesy of Eimskip
Globalizing the Arctic Economy
NOAA Office of Coast Survey Historical Map & Chart Collection
John Collier (1880) Henry Hudson with son and some crew members after a mutiny on his icebound ship. The boat was set adrift and never heard from again.
“Although networks and linkages
have always connected the Arctic
to the rest of the world, modern globalization means more connectivity through information and communication systems (including internet technologies), and expanded global trade networks."
(E. Carina H. Keskitalo et al ADHR II)
“Economic and other forms of coercion must not be used to compel Arctic communities to accept harmful and undesirable development projects.” (Inuit Arctic Policy)
ACIA. (2004). Impacts of a Warming Arctic: Arctic Climate Impact Assessment. Cambridge University Press. Available at: http://www.acia.uaf.edu

AHDR (Arctic Human Development Report). (2004). Akureyri: Stefansson Arctic Institute

ADHR II (Arctic Human Development Report: Regional Processes and Global Linkages). (2015). Copenhagen: Nordisk Ministerråd.

Heininen, L., & Southcott, C. (Eds.). (2010). Globalization and the circumpolar North. Fairbanks: University of Alaska Press.

Inuit Circumpolar Council. Inuit Arctic Policy. Available at: http://tinyurl.com/j7gb3t6

Kontorovich, A.E. (2015). Oil and Gas of the Russian Arctic: History of development in the 20th Century, Resources, and Strategy for the 21st Century. Science First Hand, Russian Arctic, Volume 41, N2.
Available at: http://tinyurl.com/hvxrtc7

Prezi created by Erica M. Dingman

Sponsoring Programs

At Trent University, the School for the Study of Canada is the key sponsor of the workshop with funding provided by a grant from the Social Science and Humanities Research Council of Canada. Sponsors at the University of Washington include the Henry M. Jackson School of International Studies; the U.S. Department of Education Title VI National Resource Centers in the Jackson School: the Canadian Studies Center, the Center for Global Studies, the Ellison Center for Russian, East European and Central Asian Studies, the Center for West European Studies, and the East Asia Center;
the Jackson School’s International Policy Institute (funded by a grant from Carnegie Corporation of New York); the University of Washington’s Future of Ice initiative; and the Global Business Center in the Michael G. Foster School of Business. At the World Policy Institute, New York City, Arctic in Context is the key sponsor. The Polar Initiative at the Woodrow Wilson International Center for Scholars is the host for the workshop. Trent University’s Frost Centre for Canadian Studies and Indigenous Studies and Western Washington University's Canadian American Studies Centre has also contributed.

The World Policy Institute would like to acknowledge the Social Sciences and Humanities Research Council's role in support of knowledge mobilization from the One Arctic Symposium.

Transportation infrastructure linked
northern resources with southern markets,
but rarely linked northern communities to each other.
Ancillary services – sea, river, and air transportation services, telecommunications, and completion of the Northern Sea Route – were developed by decree (1936) of the USSR Council of People’s Commissars.
The Trans-Alaska Pipeline connected the Prudhoe Bay oilfield with the port of Valdez for shipments south. Prudhoe Bay remains the largest oil discovery in North America.
Tourism - Nunavut Canada
In total, only 207 transits occurred through
the Northern Sea Route from 2011 to 2015 with a high of 71 in 2013.

The Northwest Passage presents even greater challenges.
Full transcript