It is the Arctic's strategic location, not the presence of any natural resources, that creates a real risk of future confrontation, or at least of the United States using force in the scenarios discussed above. The retreat of Arctic ice in the years ahead will gradually create larger areas of 'high seas' - or, in the case of the Northwest Passage, a more navigable stretch of 'internal waters' - that ships from all over the world will be able to use. The danger comes when ships from a country that the United States regards as a rival, competitor or enemy assume a stronger presence, even quite innocently, in a way that might be viewed as a potential threat to American national security. So Chinese or Russian warships can not only sail through high seas but also have 'innocent passage' through the territorial sea that lies adjacent to the coast and a right of peaceful 'transit passage' through any strait that is deemed to lie within the internal waters, territorial sea or economic zone of any coastal state.28 Yet for a country that has historically had such a keen, even exaggerated, sense of its own vulnerability, the prospect of so many foreign ships in its own backyard, or in such a strategically sensitive area, might be very alarming.
Although this danger would exist even if the Arctic has no important natural resources to boast of, the likely presence of oil, gas and minerals might make matters significantly worse. In the coming years it is possible that Chinese or Russian energy companies could establish a presence in a petroleum-rich place like Greenland, causing serious concern in Washington of a wider political alliance or even a military takeover. Just as Beijing has established close links with African countries, Pentagon analysts might reason, so too could it do the same in America's strategic backyard.
These fears would then be aggravated if the Chinese, in particular, do what they have done very effectively elsewhere in the world by using their vast foreign exchange reserves to buy majority stakes in national and international companies. In recent years, Chinese investors have been adept at doing this, particularly in the mining sector, with a view to influencing important commercial decisions. Although this does not necessarily pose any direct strategic threat to the United
States, such moves might well appear to confirm what Washington strategists think they can already see. Foreign governments have been very wary about Chinese overseas investment because they fear, rightly or wrongly, that it could be used for political ends. For example, an investment in Costa Rica in 2007 by China's State Administration of Foreign Exchange appears to have been made on the condition that the government shifted its allegiances from Taiwan to Beijing.29 And when, in the spring of 2009, the Chinese state-owned metals group invested heavily in the massive Anglo-Australian organization Rio Tinto, some analysts wondered if the Chinese government viewed the deal more as a strategic holding.30
The strength of American fears over the possibility of political manipulation by Beijing became clear in 2004, when the Chinese National Overseas Oil Company made a bid to buy the American organization, Unocal. This met with stiff opposition in Congress, where the Californian Representative Richard Pombo stated quite simply that the Chinese bid would have 'disastrous consequences for our economy and national security'.31 The same fears have been voiced by Brad Setzer of the United States Council for Foreign Relations, who claimed in November 2007 that 'the rise of sovereign wealth funds represents a shift in power from the US to a group of countries that aren't transparent, aren't democracies and aren't necessarily allies'.32 There was similar unease in Britain in the summer of 2008, when Chinese investors bought a 3 per cent stake in Barclays Bank.33
In the months or years ahead it is quite possible that, in commercial terms, the Americans will be completely indifferent to any such Chinese acquisitions and may even welcome it. If the Chinese exploit the Arctic's oil, Washington might reason, then that simply frees up other sources of supply. Oil, it has already been emphasized, is a fungible commodity, and what China or any other consumer takes from one market source simply means that they don't have to take it from another. And if the Chinese develop oil and gas fields in the Arctic, then it would bring more sources of supply onto the market, thereby alleviating rather than creating any imbalance between supply and demand. Because Western energy companies are generally more commercially cautious than their Chinese competitors, Beijing's involvement may allow these new fields to come on stream a lot more quickly than they otherwise would. This is why, during the ongoing credit crunch that began in 2008, world leaders appear to be welcoming a Chinese buying spree. Flush with foreign exchange reserves, China is investing huge sums into foreign companies, offering cash in exchange for guarantees about future supply of key commodities. In
February, the state-owned China Development Bank agreed to lend $10 billion to the Brazilian energy giant Petrobras in exchange for a long-term supply of oil. But these developments were welcomed by the outside world, or at least failed to arouse any protest, because without them future supplies of oil and other resources will be imperilled. 'It's a good thing because a lot of projects have been postponed', as one analyst said. 'Oil companies may now have the money to produce oil. There's going to be more oil produced.'34
While in commercial terms Washington might even welcome Beijing's investments in the Arctic region, it is likely to be alarmed by the prospect of a growing physical presence in the region that those commercial investments bring. Whether it is Chinese personnel on the ground, or ships moving to and from key installations, this growing presence in such an important strategic region could arouse America's strong sense of strategic vulnerability.
Judging by the lack of any preparation in the Pentagon, this eventuality still looks a very long way off. In the 1990s, the United States Navy did spend up to $25 million every year on polar research, and in early 2001 warned that its weapons, ships and procedures were completely ill-suited to the extreme climatic conditions of the High North. 'Safe navigation and precision weapons delivery capability', the report stated, 'may be significantly constrained unless these shortfalls are addressed.' But after the attacks on the World Trade Center in September 2001, spending priorities were completely changed and the navy's budget for polar research was suddenly and dramatically slashed.
For the next few years Washington officials appear to have given sparse attention to the issue. In January 2005, the State Department's Bureau of Intelligence and Research held a confidential meeting to consider the implications of a melting Arctic. 'There are likely to be a number of foreign-policy issues that must be addressed by the United States and other nations', the meeting concluded. 'These issues include the availability and potential for exploitation of energy, fisheries and other resources; access to new sea routes; new claims under Law of the Sea; national security; and others.' By this time there had been no executive statement on the Arctic region since 1994 and this report had not even mentioned the retreating ice.35
Since then the United States has also remained very short of large icebreakers, which are extremely expensive to build and operate. It currently has only two heavy icebreakers, one of which, the Polar Star, was out of service in 2008 and early 2009, while the Polar Sea is, like its counterpart, already more than 30 years old. Although the
Healy is used in the Arctic region, mainly on scientific missions, it is not designed to crush the thickest ice. Senior commanders want at least two more icebreakers and point out that the Russians, by contrast, have 18 and Canada, six.
By the summer of 2008, some American military chiefs had certainly started to become seriously concerned by the climatic changes in the Arctic, recognizing the strategic challenges it might pose. In April, the leaders of the Pentagon's Pacific Command, Northern Command and Transportation Command wrote directly to the Joint Chiefs of Staff in Washington and urged them to spend more money and concentrate more attention on the Arctic region. At the same time Admiral Thad W. Allen, the head of the coast guard, also advised a House of Representatives committee that the United States Navy needs more icebreakers to match the Russian capability in the region: 'I am concerned we are watching our nation's ice-breaking capabilities decline', as he told the House Transportation and Infrastructure Committee.36 Not only is Russia's fleet bigger, he pointed out, but it is also nuclear-powered and better equipped. In particular, the newly commissioned Russian vessel, 50 Let Pobedy ('50 Years of Victory'), which is the biggest icebreaker in the world, can power its way through more than 9 feet of solid ice without slowing down, whereas any ice thicker than 6.5 feet holds up its strongest American counterpart, the diesel-powered Polar Sea. 'We are losing ground in the global competition', as Allen told the committee. Rick Larsen was one of the congressmen who concurred, arguing that 'despite the Coast Guard's best efforts to prepare for future operations in the Arctic region, they do not currently have the assets and the capabilities necessary to perform the most basic of Arctic operations'.
Their pleadings appeared to have reaped some rewards when, in January 2009, President Bush issued a new directive on the Arctic region, the first since 1994.37 This emphasized that the United States should 'develop greater capabilities and capacity, as necessary, to protect United States air, land, and sea borders in the Arctic region (and) increase Arctic maritime domain awareness in order to protect maritime commerce, critical infrastructure, and key resources'. How quickly President Barack Obama will act upon these recommendations remains to be seen.
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