May 30, 2013 | 16:37 GMT

2 mins read

The Arctic's Growing Importance to Trade

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The Arctic's Growing Importance to Trade

The Arctic is expected to become more important in the coming decades as climate change makes natural resources and transport routes more accessible. Satellite data collected since 1979 shows that both the thickness of the ice in the Arctic and range of sea ice have decreased substantially, especially during the summer months. In addition to facilitating natural resource exploration — U.S. Geological Survey estimates from 2008 suggest that 13 percent of the world's undiscovered oil and 30 percent of undiscovered natural gas reserves are located in the Arctic Circle — the retreating and thinning of the ice opens up new trade routes. In 2012, 46 ships transporting a total of 1.3 million tons reportedly used the Northern Sea Route, which runs along the northern coast of Russia; this represents a considerable increase from 2011, when 34 ships transported approximately 820,000 tons. Interest in profiting from greater access to the high north is not limited to countries around the Arctic Circle. Europe has a vested interest in alternative shipping routes to Asia becoming more economically viable, since such routes would enable trade to circumvent numerous bottlenecks such as the Suez Canal and increase access to Asia's growing consumer markets. China has also shown particular interest in the Arctic; sailing along the Northern Sea Route rather than through the Mediterranean Sea and Suez Canal significantly reduces the trip between Rotterdam and Shanghai (the Northern Sea Route is around 20 percent shorter). This translates into significant savings in terms of fuel and crew costs. But despite the advantages gained by the melting ice, the difficulty of navigation, seasonal constraints on use, high insurance costs and weak infrastructure along the route will continue to limit the economic viability of the Arctic routes.

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