Abstract
Russia’s strategy in the Arctic is dominated by two overriding discourses – and foreign policy directions – which at first glance may look like opposites. On the one hand, an IR realism/geopolitical discourse that often has a clear patriotic character, dealing with “capturing”, “winning” or “conquering” the Arctic and putting power, including military power, behind the national interests in the area – which is why we, in recent years, have seen an increasing military build-up, also in the Russian Arctic. Opposed to this is an IR liberalism, international law-inspired and modernization-focused discourse, which is characterized by words such as “negotiation”, “cooperation” and “joint ventures” and which has as an axiom that the companies and countries operating in the Arctic all benefit the most if they collaborate in peace and friendliness. So far, the IR liberalism discourse has set the trend of the Russian policy carried out in relation to the Arctic. Thus, it has primarily been the Russian Foreign Ministry and, above all, Foreign Minister Sergey Lavrov that have drawn the overall lines of the Arctic policy, well aided by the Transport Ministry and the Energy Ministry. On the other side are the Russian national Security Council led by Nikolai Patrushev and the Russian Defence Ministry headed by Sergey Shoygu, which both have embedded their visions of Russia and the Arctic in the IR realism/geopolitical discourse. Russia’s president, Vladimir Putin, does the same. Nevertheless, he has primarily chosen to let the Foreign Ministry set the line for the Arctic policy carried out, presumably out of a pragmatic acknowledgement of the means that have, so far, served the Russian interests best. Moreover, it is worth noting that both wings, even though they can disagree about the means, in fact are more or less in agreement about the goal of Russia’s Arctic policy: namely, to utilize the expected wealth of oil and natural gas resources in the underground to ensure the continuation of the restoration of Russia’s position as a Great Power when the capacity of the energy fields in Siberia slowly diminishes – which the Russian Energy Ministry expects to happen sometime between 2015 and 2030. In addition to that, Russia sees – as the polar ice slowly melts – great potential for opening an ice-free northern sea route between Europe and Asia across the Russian Arctic, with the hope that the international shipping industry can see the common sense of saving up to nearly 4,000 nautical miles on a voyage from Ulsan, Korea, to Rotterdam, Holland, so Russia can earn money by servicing the ships and issuing permissions for passage through what Russia regards as Russian territorial water.The question is whether Russia will be able to realize its ambitious goals. First, the Russian state energy companies Gazprom and Rosneft lack the technology, know-how and experience to extract oil and gas under the exceedingly difficult environment in the Arctic, where the most significant deposits are believed to be in very deep water in areas that are very difficult to access due to bad weather conditions. The Western sanctions mean that the Russian energy companies cannot, as planned, obtain this technology and know-how via the already entered-into partnerships with Western energy companies. The sanctions limit loan opportunities in Western banks, which hit the profitability of the most cost-heavy projects in the Arctic. However, what hits hardest are the low oil prices – at present 50 dollars per barrel (Brent). According to the International Energy Agency (IEA), the fields in the Arctic are not profitable as long as the oil price is under 120 dollars per barrel. Whether Russia chooses to suspend the projects until the energy prices rise again – and until it has again entered into partnerships that can deliver the desired technology and know-how – or whether the Russian state will continuously pump money into the projects is uncertain. The hard-pressed Russian economy, with the prospects of recession, increasing inflation, increasing flight of capital, rising interest rates and a continuously low oil price, provides a market economic incentive for suspending the projects until further notice. Whether the Kremlin will think in a market economic way or a long-term strategic way is uncertain – but, historically, there has been a penchant for the latter.One of the Kremlin’s hopes is that Chinese-Russian cooperation can take over where the Western-Russian cooperation has shut down. Russia has long wanted to diversify its energy markets to reduce its dependence on sales to Europe. At the same time, those in the Kremlin have had a deeply-rooted fear of ending up as a “resource appendix” to the onrushing Chinese economy, which so far has been a strong contributing reason for keeping the Russian-Chinese overtures in check. The question now is whether the Western sanctions can be the catalyst that can make Russia overcome this fear and thus, in the long term, support the efforts to enter into a real, strategic partnership with China.