Arctic cargo may fall short of Kremlin goal, reports say

Publish date: September 15, 2020

In a surprising retreat, Russia’s main Arctic infrastructure developer has urged the Kremlin to scale back sweeping goals for the Northern Sea Route, saying shipping levels along the icy corridor will likely fall short of those demanded by President Vladimir Putin, according to a Russian media report.

The announcement comes from Rosatom, the state nuclear corporation, which is overseeing Moscow’s sprawling efforts to consolidate control over Arctic fossil fuel resources. The organizing principle behind those plans has thus far been a presidential decree of 2018, when Putin demanded cargo volumes passing through the Northern Sea Route reach 80 million tons by 2024.

But a letter sent by Rosatom suggests that demand is unattainable, Russia’s RBC newswire reports, marking a major climbdown from the corporation’s previously rosy predictions.

The letter, which was confidentially provided to RBC, was signed by Vyacheslav Ruksha, head of Rosatom’s newly constituted Northern Sea Route Directorate.

In it, Ruksha writes to the transport ministry that the target cargo goal should be revised downward to 60 million tons.

According to the RBC, the letter says cargo shipping won’t reach the demanded volume until 2025.

How the Kremlin will respond to the news is as yet unclear. While RBC said a source close to the directorate’s leadership had confirmed what the letter contained. Rosatom refused to comment on it.

If the RBC reporting holds up, the downwardly revised figure could come as an embarrassment to one of Russia’s most ambitious development projects in generations.

As recently as July, Rosatom’s CEO, Alexei Likhachev, assured Putin that Arctic shipping would meet the 80-million-ton goal by 2024, the Barents Observer reported. Earlier forecasts from the company were even more ambitious. In April, coinciding with the release of a comprehensive government plan on Arctic development, Rosatom projected cargo volumes reaching as high as 92.6 million tons by Putin’s deadline.

The figures were buoyed by expectations of huge oil and coal deliveries, which have either fallen behind schedule or failed to materialize altogether. According to the Barents Observer, a major coal field on the northern central Siberian Taymyr Peninsula has stalled. Oil pipelines from eastern Siberia fields to ports along the Northern Sea Route are likewise failing to meet timetables, RBC reported..

Vice Prime Minister Yury Trutnev, who oversees the Arctic plans from the Kremlin, has been a lone voice of caution relative to meeting the president’s shipping goal. In July he noted that he had advised Putin about some of these shortcomings, but said that revising the ultimate traffic volume goal was Putin’s decision.

The massive buildout comes at a delicate time for the Arctic’s climate. This summer alone has seen the highest temperatures ever recorded above the Arctic circle, as well as an industrial oil spill brought on by melting permafrost. Polar ice levels are declining at an alarming rate – a decrease that will only be made worse by an uptick in maritime traffic. An ongoing rash of wildfires above the Arctic circle are releasing record amount of carbon dioxide.  By 2050, a recent study American Geophysical Union concluded, the Arctic could be entirely free of ice even if international efforts to reduce carbon dioxide

Putin’s government, however, has been reluctant to launch measures aimed at combatting climate change.  While Russia, the world’s fourth biggest emitter, did sign onto the Paris climate agreement last year, its commitments to cutting greenhouse gases remain modest.

Instead, the government climate plan published in January said the nation would work to “use the advantages” of the warmer temperatures the country is experiencing Chief among those, said the document, is increased access to Arctic seaways like the Northern Sea Route.

Despite the revised cargo figures, traffic along the artery has increased over the past few years – jumping from 10.7 million tons in 2017 to 31.5 last year.





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