Russian Sanctions, China, and the Arctic

Russia’s souring relations with the West have given China an Arctic opening.

Posted on 01/3/15
By Andreas Kuersten | Via The Diplomat
(Photo by U.S. Geological Survey, Creative Commons License)
(Photo by U.S. Geological Survey, Creative Commons License)

Russian Arctic offshore energy efforts are in a period of unwelcome pause, and the flight of Western companies in the face of sanctions imposed by their home countries has left the future of these efforts up in the air. But this state is unlikely to last for long. Western firms have left incredible opportunity in their wake, and China is in the perfect position to benefit.

 

Over the past 10-15 years, the People’s Republic of China (PRC) has systematically increased its activity in the high north through various avenues. Russia’s current relations with the West are likely to substantially boost this enterprise, which should concern the international community given the importance that the Arctic will play in the years to come. The region’s massive resource reserves, China’s growing presence, Chinese challenges to regional Arctic governance, and the current standoff between Russia and the West are a potentially potent combination. This situation should be recognized and efforts should be made to mitigate possible negative consequences.

 

These efforts, however, should not be directed at preventing Chinese Arctic activity. China’s wealth and capital make it an important partner for Arctic nations in developing the high north, and it holds legitimate interests in the region. Rather, China’s entry into the Arctic must be managed responsibly through international channels to mitigate or prevent any harmful effects. Doing so may also create a rare avenue through which the West can seek common ground and understanding with Russia that can be built upon.

 

China’s Interest in the Arctic

China consumes energy on an unmatched scale, and its hunger is only forecast to grow. This makes the Arctic a natural area of Chinese concern. In 2008, the U.S. Geological Survey estimated that the Arctic accounts for 13 percent of the world’s undiscovered oil, 30 percent of its undiscovered natural gas, and 20 percent of its undiscovered natural gas liquids. These percentages respectively equate to roughly 90 billion barrels of oil, 1,670 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids.

 

Beyond raw numbers, the Arctic offers China diversity, security and savings. Despite significant inroads with Russia, China is largely dependent on oil imports from the volatile Middle East that must pass through the chokepoint of the Strait of Malacca in Southeast Asia. In 2011, approximately 85 percent of China’s oil imports transited this passage. The source and travel path for these resources, and China’s current lack of alternatives, are not ideal. Arctic energy sources and shipping lanes provide attractive diversity and security.

 

Click here to read the complete article at The Diplomat.

Andreas Kuersten is a legal fellow with the National Oceanic and Atmospheric Administration within the Department of Commerce. The views expressed here are his own.

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