This week, our guest is Alexander Pilyasov, a professor of geography at Lomonosov Moscow State University and the Higher School of Economics in Moscow. We discuss the Russian Arctic, cooperation in the region with China, and growing competition with the United States. We recorded the conversation in Belgrade, following a “Trialogue” on American, Russian, and Chinese interests in the Arctic.
This week, our guest is Alexander Pilyasov, a professor of geography at Lomonosov Moscow State University and the Higher School of Economics in Moscow. We discuss the Russian Arctic, cooperation in the region with China, and growing competition with the United States. We recorded the conversation in Belgrade, following a “Trialogue” on American, Russian, and Chinese interests in the Arctic.
*The Trialogue Podcast is hosted by the Stimson Center and produced by University FM.
**The first twelve episodes of this podcast were published by the Middlebury Institute of International Studies at Monterey.
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
[00:00:00] Peter: Hi, I'm Peter Slezkine, Director of the Monterey Trialogue, a program hosted by the Middlebury Institute of International Studies at Monterey. Since the middle of the 20th century, relations among the United States, Russia, and China have had an enormous impact on each country separately and on the world as a whole. The purpose of the Monterey Trialogue is to better understand these extraordinarily complex and consequential relationship by directly engaging with experts from all three countries.
We are very lucky to have another fantastic guest for our Monterey Trialogue Podcast. We’ve just finished a conference in Belgrade, where we discussed American, Russian, and Chinese interests in the Arctic. And my guest today is Alexander Pilyasov, a professor of geography at Lomonosov Moscow State University and the Higher School of Economics in Moscow, Russia and a great expert on the Arctic, with long experience and he himself is from Magadan, so he knows the far North very well, both from an academic and personal perspective. So, welcome to the podcast.
[00:01:12] Alexander: Thank you, Peter.
[00:01:13] Peter: So, let's start with a view of the Russian Arctic from a domestic perspective, and then we will broaden out to the international scene to Russian relations with the United States, with China, but let's begin with the significance of the Arctic to Russia. How much of the Russian economy is directly connected to Arctic resources?
[00:01:35] Alexander: Well, it's, of course, a very important connection. And when I, several years ago, participated in the preparation of strategy, of course, it's not always a question of Arctic. It's a question of inseparable connection of the Arctic zone, of the Russian Federation, with the mainland, with the Russian Federation because of at least more than 10% of budget revenues, more than 25%, 30% of export revenues is connected with the Arctic and Northern resources. That's, historically, tradition of a resource-based economy, which the Russian economy certainly is.
And that's why it's not the question of the Arctic development, and always the question of the economic development of the whole country. If we count the productivity of each Arctic resident, stable or temporarily resident, we can see that its productivity is much more than the average Russian employee because of resource extraction. So, per capita, Arctic gives for the country, per capita, per employee, much more than the measure is for the Russian as a whole per employee.
[00:02:55] Peter: What are the main resources-
[00:02:59] Alexander: Well, it's certainly, of course, oil and...
[00:03:00] Peter: ... can be found in the Arctic?
[00:03:01] Alexander: Yes. It's oil and gas, but now, when we're thinking about a new technological mode, it's, of course, rare earth metals, which is in great demand globally. And so, we're thinking about how to deliver and extract these minerals for the world marketing in the national interest of the country in itself.
[00:03:25] Peter: Some of the most valuable resources of the present day, and potentially, the future, are located in the Arctic. You were discussing the other day the history of Russian resource extraction in the Arctic, beginning with timber, going through iron ore, and then onto oil and gas. Could you give us a quick overview of the timeline, which ports are associated with what resource, what direction these things were being exported?
[00:03:48] Alexander: Well, the industrial development of the Arctic Zone was begun in 1930s. So, it was just the starting point. Of course, with Norilsk Nickel combined, we can see that it's almost 100 years of very active industrial development of the Arctic territories, mostly in resource development.
And now, of course, since the beginning of the 21st century, we have come to the new model with corporate active participation, sometimes private or state-owned corporations. And they are dealing with new oil and gas deposits, new mineral deposits, and new deposits with rare earth metals. So, we are expecting to have at least dozens and dozens of new projects, which will be launched in the Arctic in the nearest 15, 20 years. The majority of them will be in the eastern part of the Arctic, in the Asian Arctic.
[00:04:59] Peter: But originally, the western Arctic was a source of timber for Europe, and then iron ore became the principal resource, also shipped to the West, finally followed by oil and gas.
[00:05:12] Alexander: Correct, correct. It was always mentioned under the 1990s and the beginning of 21st century that our western part of the Northern Sea Route and western navigation is much more active because of these European markets. And as for eastern part of the Northern Sea Route and the Asian part, it was less developed because of less activity, less navigation, et cetera, but now, we can see how this is gradually changing because of the whole reorientation of the country to the Asian markets. And, of course, Arctic is in this line with a, sort of, reorientation to the growing and demanding Asian markets of resource production.
[00:06:01] Peter: Where are the main sources of... especially gas, in the Arctic that had been flowing toward Europe through the North Sea Route?
[00:06:10] Alexander: Of course, it's Yamal. With Yamal and Gydan Peninsula, and if we compare the situation for the last 50 years, we can see how the center of oil and gas activity in the Yamal was moving from the South to the North. Firstly, it was the south of Yamal with pipeline to the South logistics. And now, after 40 years of the beginning of gas exportation, it's northbound scheme with marine logistics and with LNG and oil production for the world markets.
[00:06:50] Peter: And the extraction has been progressing North because the extractive technology has been improving because there are greater deposits further North, because logistically, it has become easier to ship them out from higher latitudes?
[00:07:05] Alexander: Yes. Now, we have new technology, and we can go using sea routes to deliver resources extracted in the Yamal Peninsula, LNG and, and oil to the European and Asian markets, et cetera, but I would prefer to answer in the more different manner, etc.
It was a breakthrough in, in psychology. For decades, Arctic seas were dangerous. 1930's Papanin and Chelyuskin expeditions did give a result. And this result was not fear, but a sort of cautious dealing with the marine scheme of transportation. That was the result of these 1930s expeditions, which was not very lucky, as you know. And one of the psychological results was that it was, for decades, only one scheme of delivery utilizing marine vessels.
It was from Norilsk Nickel, from the Taymyr Peninsula to the western markets of Europe. That's all, and nothing more. No, no active navigation. But as soon as the global warming did play its role, and new technology helps, Arctic seas were not counted as very dangerous as before. So, it was, like, psychological breakthrough in the mentality of corporations, in the mentality of policy people which is in charge of the Arctic policy.
And so, this change has appeared or has happened in the beginning of 21st century. And 10 years after, it did give some products or some results in the launching of new projects, which were based on the marine logistics. First, Lukoil, then, other, like Gazprom Neft, and finally, Novatek.
[00:09:07] Peter: In the 1930s, the Arctic was dangerous. The individuals who explored it, mapped it out, charted new paths, were heroes followed by the whole country. Now that this psychological shift has taken place, the Arctic is somewhat warmed, companies have replaced single individuals in mastering the territory. Has that romanticism disappeared in the Russian psyche? Is the Arctic still a frontier of excitement, adventure, and fascination, or is it, an area of big company resource extraction that is no longer as much purchase in the Russian imagination?
[00:09:45] Alexander: Thank you for your question. Yes. Arctic is still the territory of discovery and territory of risk in spite of global warming and in spite of all these changes connected with brave and courage behavior of our corporations, which are on the edge, which were lucky, are lucky to exploit resources on the edge, on the margin of possible. And I, I do remember my personal experience in Chukotka when I was in charge of mutual joint Russian-American expedition in Provideniya.
And my American colleagues from the state of Alaska, they were very irritated, but my incessant answer in their questions, "When did we start travel from Provideniya to, to settlements, to Anadyr, et cetera, to Lavrentiya, from Provideniya to Lavrentiya?" It's eastern Chukotka, unpredictable in weather. And I usually answered, "Maybe tomorrow. Maybe."
They were very irritated because they were, like, accustomed to precise days, precise time. And this guy, this Russian guy, who is in charge of the whole expedition, answers the questions, "Maybe." And again, I can tell you that it's, again, and even now, it's often maybe in the case of Arctic.
[00:11:12] Peter: So, how do these huge companies operate in a world of maybe?
[00:11:19] Alexander: Well, you can see that it's... naturally, they feel comfortable with flexibility in schedule, in schedule. I mean, that even when they fix some year, 2000, for instance, '24, sometimes, later, they advance or they inform us that it's... will be a bit later, six months later or eight months later. And it is recognized that the unpredictability of natural and social conditions in the Arctic projects do give us such tolerance in rescheduling of the initial schedule for the project.
[00:12:04] Peter: And this adaptability, in some sense, is even a positive for these companies. It's not just that it's an endless series of delays and nothing ever gets done.
[00:12:12] Alexander: I mean, that what is in mainland Russia would be received with irritation because, well, you have promised us to start at 2024. Now, you are thinking that it will be six months or maybe even more later. But for the Arctic conditions, it's, like, a, sort of, general accept of such, such delay that's connected with the general recognition of the Arctic ambivalent weather, and maybe psychology in the projects, in the nature, et cetera.
[00:12:48] Peter: What are the major companies that operate in the Russian Arctic?
[00:12:52] Alexander: Well, we can differentiate. So, on one hand, we have this old resident, like Norilsk Nickel, with almost 100 of history in the Arctic. And on the other hand, we can see newcomer, like Novatek, who is in the Arctic for 30 years only, total newcomer, created from the roots as a greenfield company, absolutely, which is interesting.
[00:13:19] Peter: Created by whom?
[00:13:20] Alexander: By, by three persons, building constructor Mikhelson, geologist Natalenko, and financial specialist with British expertise. Yes. But of course, the, the major initiator was Mikhelson, who started with the repairing works and provision works for the oil and gas companies.
And further, later, one step and another step, he launched an independent gas company, but the start was repairing and services like provision materials for the other companies. It was in '90s. And then from the beginning of the 21st century, Novatek launched its own projects, resource extraction projects, approximately maybe five, seven years after the creation of the company.
[00:14:24] Peter: And what do they extract primarily?
[00:14:26] Alexander: Well, it was LNG. It was gas and condensate. And the reason why it, it was very easy for Novatek to get licenses and deposits, and it's, as you understand, it's not an easy thing, was that they were complicated deposit with oil, gas, and condensate, which Gazprom prefer did not extract. Methane or ethane, entirely pure, like Bovanenkovo, like Nadym, were much easier for extract.
And Gazprom, being initially a typical Soviet corporation, which utilized the effect of economy of scale. Not variety, but scale. So, the more, the better, less expenses per ton or per cubic meter. He preferred to deals for decades with such monotonous deposits. And Novatek initially took complicated deposits with gas and oil and condensate and was lucky to manage these deposits abandoned previously by Gazprom.
[00:15:44] Peter: And they are efficient enough in their extraction, that it pays off, it's not too expensive, because we've also heard that there was talk in the 1990s that any kind of extraction in the Arctic is... basically costs more than the value it creates.
[00:16:00] Alexander: Oh, it's not true because... especially gas deposits. Even oil is not so. They are so huge, and Yamal is so rich with these gas deposits. You mean it's even on the world, on the global scale, it is essential amounts, even on the global scale. And for the country, it's like monopoly. Yamal is a monopoly in gas production. So, this capacity of Yamal to produce gas, either in pipeline or in LNG form certainly helps our companies to be profitable in spite of all Northern extra costs of production.
[00:16:44] Peter: And most of these companies are concentrated on the Yamal Peninsula because the Russian Arctic coastline is vast, but most of the resources that are currently being extracted and exploited are on one peninsula in Gazprom, Novatek, and so forth are all operating together in the same region.
[00:17:04] Alexander: Correct. If we're thinking about oil and gas deposits, yes, they're very concentrated, very concentrated. And it's mostly Yamal and Nenets Autonomous Okrug, which is also another Arctic territory to the west of Yamal. They both produce the majority of oil and gas resources of the Russian Arctic. And as for Taymyr, Chukotka, Murmansk, they mostly deal with metals and with metals and minerals.
[00:17:38] Peter: So, on the Yamal Peninsula and other areas where big companies operate, how do people live? Who lives there? Are these company towns where the company is building the residences and providing the food and the basic goods, or are the urban environments and the company-operating areas separate?
[00:17:57] Alexander: We can differentiate two situations. It's brownfield projects of oil and gas extraction. And these Brownfield projects, they, of course, are connected with a stable system settlement patterns, I mean, cities, settlements, and mono-profile towns close to the place of this resource extraction, to the deposits.
As for greenfield development, which is the first decades of the 21st century, it's absolutely other scheme. It's temporary camps, shift camps, fly-in-fly-out philosophy, no towns, no mono-profile settlements, only shift camps and helicopter and scheme of delivery workers from the nearest base like Tyumen or Yekaterinburg or Ufa, et cetera.
[00:18:56] Peter: And that is more sustainable in current conditions than trying to build and maintain a functioning urban environment in such far Northern difficult conditions.
[00:19:07] Alexander: As soon as our development of the Arctic became corporate and not state, of course, it was the question of corporations, how to create profitable scheme of extraction? And for them, of course, to build constant towns forever and to maintain all these utilities, all schools, kindergartens, and other things, which Soviet State system could maintain and could provide, was, of course, unbearable. And they initially preferred not to create these new settlements, but to deal only with shift camps and fly-in-fly-out mode of delivery of workers, initially, from the very beginning of launching of the projects.
[00:19:59] Peter: So, who are the permanent residents of the Russian far north? You said maybe 10% of the economy is generated in the Arctic regions. How much of the population lives there year round?
[00:20:11] Alexander: Well, it's several millions. 90% of them are living in cities like Arkhangelsk, Murmansk, Norilsk, Tiksi, Anadyr. If you can tell, this is the most urbanized territory in Russia Arctic Zone because of the majority of constant population is living in the cities.
[00:20:34] Peter: In the sense that there's just no possibility of living outside of the city in the tundra. If you live up there, you live in a city.
[00:20:43] Alexander: Or you can live in native settlements and some settlements which do survive after the Soviet administrative system of colonization of the Arctic and the North. There are some, but not too many of them. So, we can see this polarization settlement pattern scheme. Cities, centers, district, and regional centers, and then native settlements.
[00:21:08] Peter: How fast are those native settlements shrinking?
[00:21:11] Alexander: Just the opposite because of birth rate. Birth rate, some of them, especially in Yamal Peninsula, are just in the same size as in the beginning of economic reforms. In Chukotka, of course, situation is worse. They are diminishing. Correct. They are diminishing. So, the situation is different along the Arctic territories.
The best, of course, is Yamal, not good, not bad. In Nenets Autonomous Okrug, as for Chukotka or Arctic of Krasnoyarsk Krai, the situation is worse. And they are the diminishing of the native settlements. Correct.
[00:21:54] Peter: So, those who live in native settlements, those who live in the big Soviet cities, what do they do? How do they make their money? You said that the new companies that are generating the most wealth fly in their workers. So, those who live in the big cities or in the native settlements, what does their local economy look like?
[00:22:11] Alexander: Well, let's differentiate. Big cities like Arkhangelsk, Murmansk, three sectors in the economy, at least in this city economy, it's budget sector. I mean, it's federal and regional and municipal employee, which get budget money. And it's some person's private small and medium businesses. And it's their own money. And then we can see resource corporations or their headquarters in these big cities. And it's corporate money.
Novatek in Murmansk Oblast, for instance. So, three sources of money from corporate, private, like, small and medium businesses, and state money in the budget sector, federal, regional, and municipal. As for native settlements, it's another story. We can see traditional sector. It's reindeer herders and traditional fishing and marine mammals hunting. So, it's like subsistence, they call it in the state of Alaska, which is...
[00:23:19] Peter: And that lifestyle is still being passed on from generation to generation.
[00:23:23] Alexander: Yes.
[00:23:24] Peter: Inhabitants still know how to herd reindeer and hunt marine mammals.
[00:23:28] Alexander: Yes. And it's so-called in-kind contribution to their income, not in cash, but in kind. And then, of course, it's budget money, again, if you're a municipal employee, or teacher at school, or person at the kindergarten. As for businesses, of course, in the native settlements, not a lot. It's not serious sector. So, traditional and budget, or transfer.
[00:23:56] Peter: Where do all these Arctic resources go and how? So, a lot of the gas was going through big pipelines to Europe. Those are now empty or full of holes at the bottom of the Baltic Sea. So, how important is the Northern Sea route? Are there overland transportation networks? What are the prospects of new pipelines, that might go to China, Power of Siberia 2, and so forth?
[00:24:21] Alexander: Yes. Of course, it's several routes of delivery, old logistics connected with mainland and pipelines to the west, to the east, and to the internal regions of the Russian in itself because of this huge program of gasification. We should not forget about it, very ambitious and very large scale program, and now even more than in the past because of western markets, turbulence, et cetera.
[00:24:55] Peter: So, gas is not just a major export product, but also very important for Russian domestic industry and-
[00:25:03] Alexander: Correct.
[00:25:04] Peter: ... economy.
[00:25:04] Alexander: Correct.
[00:25:04] Peter: And that process has been completed, I don't know, to what extent? How much is left to be done to fully gasify Russia?
[00:25:11] Alexander: I cannot answer in concrete percents, but I can tell you for sure that, of course, the share of domestic consumption of the total gas capacity, which produced by Gazprom, Novatek, other oil and gas companies, of course, is increasing, especially for the case of Gazprom. This share is increasing for internal consumption. And the program, officially proclaimed by our president, the program of gasification of settlements of Far East, of Siberian settlements, is entirely and inseparably connected to the new situation.
I mean, the activity. The program was proclaimed years ago, but the intensity and activity of this is, of course, much more now than in the past. So, internal consumption, then European markets in some share, Asian markets, and the marine delivery to the LNG and gas, LNG mostly, to the Asian and European markets, and condensate, of course, the question of condensate, which was not under any bans until recently.
That's interesting story, that there were some sanctions against oil, then against LNG, but as for condensate, no sanctions until recently. No sanctions. So, it was easy to deliver condensate by marine provision, marine delivery without any risks to the European market.
[00:26:52] Peter: Why were there no sanctions against condensate? And what changed recently?
[00:26:55] Alexander: Well, this, this is technical question. I am not an expert to answer properly. But this was the reality, a very interesting reality. So, Europeans were very, sort of, differentiated in their sanctions. And there are some layers in oil and gas and condensate production which were not covered under any sanctions. That was interesting. So, it was very multifaceted picture.
[00:27:20] Peter: How problematic have sanctions been for these major companies? Have they mostly found markets for their products anyway, and it's just a matter of logistics and getting the minerals, gas, and oil to their buyers, or have there been difficulties just completing these transactions because of sanctions?
[00:27:40] Alexander: Yes, of course, it will be honest to answer that it was, and it is difficulties, but under the rules of the market economy, which is very flexible in itself in nature, you have always capillary... like, I mean, small, small streams of delivery. And it's impossible to ban them all, of course. You ban this, and then next year or... so, of course, sanctions can be very powerful, correct, correct, but the necessity and the capacity to invent new ways of delivery is still possible.
[00:28:16] Peter: And by new ways, you mean both the transaction mechanism and the actual delivery scheme.
[00:28:23] Alexander: Delivery scheme and conversion with the origin of this gas and oil and Russian and Uzbekistan, et cetera, et cetera. So, it's, of course, the question of so-called maneuvering. But I am sure that it's impossible to follow all these channels, all these flows. It's the challenge, which even Gosplan, Soviet Gosplan, cannot be successful in which, I mean, with all its attempt to follow each money flow and each product flow.
And even for Gosplan, it seems to me that it would be unbearable and impossible task. And the same for the foreigners or for the sanction initiators. To follow all this complicated routes and channels of delivery, of changing in a region, et cetera, it seems to me it, it, it is the task which is impossible to solve.
[00:29:27] Peter: So, you're saying, ironically, the Western sanctions fail in the same way that the Soviet command economy did, that neither of them can control a flexible economy that is constantly adapting.
[00:29:39] Alexander: Yes. My idea is that we cannot... not we, but our partners, our Western partners, they cannot be successful because they are trying to answer on the very complicated problems with plan and command style, very monopoly, very one-sided style. In this, they cannot succeed because the situation is very complicated. The change of a region is possible. And so, to follow and to fulfill this task is not possible under plan and command ideology.
So, you should be very flexible. You should follow each route, each vessel, et cetera, et cetera. I would tell you like this. Maybe it is possible, but it's enormously cost procedure, with enormous cost, transaction costs. Well, look, if 1,000 of clerks in the EU or in the U.S. would follow these routes, this change of a region, let's say, and you should pay them, and you should produce bureaucracy, et cetera, et cetera, it's enormous transaction costs.
And the question is, will the benefit deserve such costs? That's the question. So, nobody did, in the EU and in the U.S., did arise a question about costs of this procedure. It was like we have this sanction package numbers 10, 11, et cetera, but they're with the cost of monitoring delivery, monitoring changing of property, of ownership. And it's, it's not like free lunch procedure. I mean, fulfillment of these sanction packages. Nobody in EU and in U.S. did tell us about this. But paper, paper does mean nothing. The core is in implementation. And implementation is very cost procedure.
[00:31:55] Peter: And presumably these costs will endure. Once the bureaucracies are built, the costs become entrenched, even if the Russian companies adapt and find some new mode of transaction.
[00:32:06] Alexander: So, it will be fair to say that this is a cost procedure with cost procedure from both sides. On one hand, it's cost... it takes money and time to hide or to reverse the region and the ownership. And on the other hand, it still costs a lot in time, energy, and money to follow, to monitor, to, to implement the sanction packages.
[00:32:41] Peter: So, Russian and the West are not even engaged in zero-sum competition, but in a lose-lose scenario. So, let's switch from that to the Chinese who constantly proclaim the possibility of win-win. So, tell us a little bit about the Chinese presence in the Arctic. They've declared themselves a near Arctic state. They have a couple icebreakers. Are they really present in the Arctic in any way other than the main customer for Russian resources?
[00:33:07] Alexander: Yes. They are trying to be not only co-owners or co-investors in the Arctic projects, but to be physically in the Northern Sea Route with their vessels, with their future icebreakers, and vessels to deliver cargoes to the European markets, et cetera. That was very prolonged desire for the long-term future. And it's a, sort of, constant.
In this case, they are different from Indians, Japanese, other Asian countries with this, I mean, persistence, persistence in their presence in the Arctic. And so, this is, of course, is a fruitful procedure, but fruits can be generated in the long-term period, not, like, in, in one second or in one night.
But we can see that in 20 years, China, from a very newcomer, which only with Antarctic experience and no other experience, only Antarctic, they have, in 20 years, they did generate new generation of scholars, experts with new Arctic competences striving to be present in the Arctic projects and Arctic transportation, et cetera. We are all participants of these changes. They are going just in our eyes, in our vision.
And, for instance, I was the author of the Arctic Human Development Report. And the issue China and the Arctic, which 20 years ago, during the first Arctic Human Development Report of 2004, was a, sort of, astonishment. What? China and Arctic. What? That's nonsense, nonsense. But in 10 years after, in 2014, it was generally recognized theme, China and the Arctic, so.
[00:35:25] Peter: And they became an observer at the Arctic Council?
[00:35:28] Alexander: At the Arctic Council, yes. They became a, a participant in the several huge Arctic projects in Russia. And so, they are in, in, in monitoring of the Arctic, of the climate change, et cetera, et cetera. So, they were, in many points, they were present, they are present in the Russian Arctic.
[00:35:49] Peter: Where is their presence felt most now? And where are the prospects for future Chinese presence in the Arctic greatest? So, they are far and away the largest purchaser of Russian energy from the Arctic. How important are they as a scientific presence? How much do they generate research in the Arctic on climate change, for example? How great is their investment in the creation of Arctic infrastructure and so on?
[00:36:18] Alexander: I can tell you in general that if we look at the Chinese publication in the Arctic scientific literature, of course, the growth of Chinese presence in the Arctic literature, both physical and social, but mostly physical climate change, et cetera, physical geography, glaciology, it is enormous. For 20 years, it, it is a great growth from minuscule, from zero level. Yes.
And as for physical presence, not scientific, but physical presence, now, resource projects, interest in transportation, several so-called experimental expeditions or experimental voyages with cargos from Shanghai to Europe, at least several a year, several a year, like, experiment, like, trial and error efforts.
But of course, if the persistence is here, we can predict that in the future, it will be much more regular, much more, more volume. And the share of transit in the total delivery of cargoes in the Northern Sea Route is generated entirely by China, entirely. The international transit, I mean. It's not the...
[00:37:37] Peter: So, right now, it's Russian oil and gas, and, and to some extent, minerals being shipped along the Northern Sea Route from Russia to China.
[00:37:45] Alexander: From Russia to China, yes, but it was another topic. It's our delivery, I mean, resources. But it was international transit means from Asia to Europe. And international transit is generated by China. And it's, in total volume, it's 10%, 15% of the total millions of tons of, of cargo.
[00:38:06] Peter: And the prospect of shipping from China all the way to Europe along the northern sea route. Right now, you said there's just a few test voyages. I think the other day, our Chinese colleague called it a-
[00:38:19] Alexander: On the regular basis. Yes.
[00:38:19] Peter: ... spare tire. So, this is a hedge against other transportation routes becoming less secure, through the Suez Canal, for example. What are the possibilities of it actually being exploited as a major transportation artery, or will it always be, sort of, a secondary-
[00:38:36] Alexander: Secondary.
[00:38:36] Peter: ... spare tire?
[00:38:37] Alexander: Secondary, absolutely. It's 5% to 10% the most from the Suez delivery, nothing more, even only if some force majeure will happen. In this case, maybe it will be changed. But the rule was the most 5% to 10% from the volume of Suez, that's the niche or that's the share of Northern Sea Route in comparison with Suez. So, it's much less, many times less.
[00:39:06] Peter: And that's true going forward, even as ice melts, because conditions will still be dangerous, the shipping will be slow.
[00:39:12] Alexander: Yes. And of course, it's a question of, of, insurance and looking for replacement of Deloitte insurance, et cetera, many things which is necessary for captain to take into consideration when he's going to there. And, of course, icebreaker price per day, which is also very high. So, when you need, of course, in its assistance, in its service.
So, many obstacles, and in spite of these many obstacles, the general line to increase cargo and to increase capacity of Northern Sea Route, it's also obvious trend for the last 15 years, and Chinese participation in international transit and its indirect participation in the resource delivery from the project which China co-invested.
[00:40:08] Peter: So, Chinese presence has grown considerably, both in research and in the economic domain in terms of infrastructure investment and shipping, but the prospects of goods going from Shanghai to Hamburg in large quantities anytime soon doesn't seem imminent.
[00:40:29] Alexander: Yes.
[00:40:29] Peter: So, let's turn from China briefly to conclude to the U.S. You know the people who were creating United States Arctic strategies. You know them personally. You read them as they were published. What do you think of the evolution of American Arctic strategies, and particularly the most recent ones?
[00:40:48] Alexander: Well, I, I would like to, to answer shortly, that, of course, it's much more... now, the last document, I mean, national strategy on the Arctic, this American document, of course, is much more aggressive and much more anti-Russia, anti-China. And I even was deeply astonished with the general words, with the sentences, with the propositions, et cetera.
And it's my mood that it is, of course, a great pity because Arctic was, for decades, for the last decades, the territory of cooperation with enormous hope of each participant that it will be for a long period. Cooperation not, confrontation. And when I was in Canada, after 2014, after all this Crimea crisis things, Canadian top officials in the Ministry of International Relations told me that the Arctic is a special case, and we, we should stop a lot of relations with Russia, but not about the Arctic issues. They told me with a very sure manner in 2014.
The reality was that Canada then abandoned or stopped all the Arctic cooperation, too, but that was very interesting example, how initial expectation of even the persons who are, sort of, inside the domestic policy, the general hope that Arctic will be, as we call it in, in our judicial institutions, will be as a special case. Unfortunately, it was not done. It was not the case. And Arctic is like the other, with sanctions, with confrontation, et cetera, et cetera.
That's my pity. And of course, when I first read this national strategy of U.S., last strategy, my initial expectation was that in the Arctic area, the tone, the words will be much more tolerant because of harsh climate conditions, necessity to cooperate, et cetera, et cetera, but unfortunately, this was not the reality. And the general statements were even more aggressive than in the other cases when U.S. condemned Russia in this or that, et cetera. I think that it was a pity, and it is a pity, because Arctic should be, as I'm an, an Arctic scholar, should be a special case in the international relations.
[00:43:49] Peter: Thanks for listening to the Monterey Trialogue Podcast. Make sure to subscribe to the show, so you don’t miss out on any episodes. I’m Peter Slezkine. The Monterey Trialogue Podcast is hosted by the Middlebury Institute of International Studies and produced by University FM.