Helsinki Climate Forum: Arctic Urgency 28.9.2013, panelistin kokemuksia

1. ALUEKEHITYS, 2. TULEVAISUUDEN ENNAKOINTI, 3. STRATEGIAPROSESSIT, 4. Osaamis- ja koulutustarpeiden ennakointi, 5. Koillisväylä, Arktinen meriteknologia, 6. Kaivostoiminta, 7. Logistiikka ja yhteydet, 8. Energia ja ympäristö, METODI, O. YHDYSKUNTASUUNNITTELU JA MAANKÄYTTÖ

IPCC:tä 12 vuotta pääjohtajan palvellut Rajandra K. Pachauri jättää tehtävänsä.

Linkissä kuvakooste Helsinki Climate Forum: Arctic Urgency 28.9.2013 tapahtumasta.

Nobel-palkittu IPCC:n pääjohtaja Rajendra K. Pachauri ja Pohjoisen ja arktisen ulottuvuuden viitekehyksessä tutkimussovelluksia yli 20 vuotta tehnyt yhteiskuntamaantieteilijä ja tulevaisuuksientutkija Yrjö Myllylä
RD Aluekehitys Oy:stä (www.rdaluekehitys.net). Kuva illallisen päätteeksi, johon illalliselle osallistui myös presidentti Tarja Halonen, Ilmatieteen laitoksen pääjohtaja, ym. alan vaikuttajia Suomesta. Pachaurille Myllylä luovutti tämän UM 2008 julkaisun.

”The North-East Passage is already a fact”

Myllylä, Yrjö (2011). The North-East Passage is already a fact. Baltic Rim Economies 2/2011.

The increasing interest of the great powers in the northern areas shows that the North is moving from the periphery to focal point. U.S.A., Russia, Canada, and Norway have updated their strategies in the Arctic region since 2008. Finland’s strategy for the Arctic was ready in the summer of 2010, and the preparation of EU’s strategy for Arctic is a topical issue. The increased importance of the North has wide ranging impacts. There is a need to understand the real factors affecting the development, and pay attention to what we can control.

The great powers updating their strategies, climate change is only one reason for the increasing interest in the Arctic Region and the North-East Passage, other factors are more important. First of all, the collapse of the Soviet Union can be mentioned, which has moved the interest of Russia being the world’s by surface largest state and by far the largest arctic state more and more north as the southern oil-producing countries became independent. Russia needs the North and the North-East Passage.

Secondly, the growth of the global economic should be mentioned and its impact on the prices on the limited raw materials, such as oil and other mineral. The third important factor is technology, especially transportation technology development – the new cost-saving transport system and other solutions create key conditions for exploitation of Arctic´s natural resources – items that we are able to control. With these changes for example Murmansk, being North-West Russia´s only ocean port and central nodal point of the North-East Passage is becoming increasingly important in the long term as a centre of the energy industry and logistics, with a radiation also to Finland.

The price of crude oil cleaned from cyclic variations has risen since the 1950s in today’s money terms. In addition to the increase of raw material, price innovations of transport technology are needed to mobilize oil and other natural resources. The Finnish planning companies, such as Aker Arctic, a subsidiary of STX Finland, have been in a key position:
For example, the world’s first oil transportation system operating in icy waters was introduced in the summer of 2008 in Varandei, situated in Pechora Sea in the north-eastern part of Europe. Without the assistance of ice-breakers, vessels transport oil along the North-East Passage to the mouth of the Murmansk fjord being ice-free all year round, where oil further is reloaded into ocean going vessels. The oil is transported to China along traditional trade routes. In the vicinity of Varandei an oil rig will also be completed in the Prirazlomnoye oil field in the summer of 2011, when oil drilling the Arctic Ocean begins. The oil of the field will be transported from Murmansk along the North-East Passage using Finnish-designed and already manufactured vessels.

The regular use of North-East Passage without the assistance of an ice-breaker was a fact already in 2006, when the Helsinki shipyard completed the first ore carrier ship designed by Aker Arctic and which was able to traffic the North-East Passage independently.
The vessel-Norilsk Nickel-named after the purchasing company, was an innovation.
It passes through the ice in North-East Passage without any assistance of ice-breakers in regular traffic from Dudinka situated at Yenisey River arm in Siberia to Murmansk. The main ice obstacles are passed by going astern, where for example the Azipod ® drive system innovated by ABB and Wärtsilä will provide essential help. Another innovation is also ore and container transportation on the same vessel. Capital goods and consumer goods are then transported as return cargo. Four sister ships were constructed in shipyards in Germany as Finnish Shipyards at that time were giving priority to the production of cruising ships. In the summer of 2010 eight cargo ships came through the North-East Passage from one end to the other. By the end of January 2011, orders had been placed for the summer for more than 20 vessels for oil, gas and steel cargo.

The Finns can be considered are the world’s most Arctic people. According to some sources, approximately 60% of the world’s population living north of Helsinki are Finns. Our nation is enriched by northern technological know-how of ice-breakers as well as trains, tram ways and other means of transportation operating in snowy and cold conditions. This fact was also realised by the Russians, when founding the new Arctech Helsinki Shipyard together with the Russian United Ship-building Corporation and STX Finland in December 2010. However, arctic technological demand is not only confined to Russia. China is also interested in the northern natural resources. Technology applied to cold weather is needed over the whole Northern Europe and even in South Africa. At the moment, a research vessel for Antarctic representing a new generation and ordered by the South African environmental administration is under construction.

North-East Passage is not expected to melt. For example, according to the latest satellite data from 2011 the maximum extent of the ice in the Arctic Ocean has been more or less in line with the long-term average. We need to develop the technological know-how for inclement weather conditions, and keep the advanced position of the Baltic Sea countries as a co-operation between the countries also in the future. The Baltic Sea region is a key energy transport corridor. The Baltic Sea freezes in winter, at least partially. It provides a development platform for the products needed also for the upper Arctic Ocean region. The Baltic Sea Region can be used as a product development platform for example for ice- breaking and oil protecting vessels as well as for other transport, energy and environmental technology products operating in ice. There will be a growing market for these products in, for example the Arctic Ocean, where the oil transport is increasing. The coastal countries around the Baltic Sea could place innovative orders as South Africa did and order oil protecting equipment in the name of environmental protection. These products have a growing market in for example in the Arctic Ocean, with its increasing oil transports. The Baltic Sea countries should be active trying also to incorporate the themes of arctic transport, energy and environmental technology in the EU´s research Framework Programmes. For example the so called Aurora Borealis-research vessel project for the arctic region planned with the aid of EU and Russia and Framework Programme should be continued.

Finland could also in the future play an important role in the development of the arctic transport, energy and environmental technology. In Finland, the Parliamentary Committee for the Future has produced during the year 2010 a report entitled ”Russia 2030 based on Contracts” (editors Osmo Kuusi & Hanna Smith & Paula Tiihonen). In the context the Committee for the future has formed a statement: ”Finland must draft a Research and Development Programme for the Development in Finland of Arctic Transport, Energy and Environmental Technology

Yrjö Myllylä
Doctor of Social Sciences
Senior Researcher
Finland Futures Research Centre
University of Turku

(Artikkelin sisältö suomeksi/See also Finnish article Koillisväylän käyttö on jo tosiasia: TS 260411, Alakerta)

Russia’s geopolitical focus has moved to the North – The Development of Murmansk Region in the light of three scenarios

Myllylä, Yrjö (2010). Russia’s geopolitical focus has moved to the North – the development of the Murmansk region in the light of three scenarios. Baltic Rim Economies Bimonthly Review 4/2010, 31.8.2010. Pan Eurooppa -instituutti. Turun yliopisto/Turun kauppakorkeakoulu. <BRE_4_2010_YMy >

Yrjö Myllylä wrote above mentioned publication:

”The starting point of the article is the idea that the dissolution of the Soviet Union resulted in a shift of the geopolitical and geoeconomic focus in Russia to the north. As the main oil-producing regions of the Soviet Union, such as Kazakhstan and Turkmenistan, became independent, the relative importance of north-western Russia and Siberia increased in Russia’s oil and gas production. The high prices of crude oil and natural gas products in the global market have led to the emergence of wealthy, rapidly developing pockets in remote regional economies. Oil and natural gas are Russia’s main exports, brought to Europe primarily by oil and gas pipelines, an infrastructure built several decades ago. Now, however, the situation is changing.

Economic interest in northern regions has increased as the growing world economy demands more energy and the resources in existing oil and gas fields are being depleted. The Arctic region is rich in oil and natural gas. The rising prices of raw materials are making the exploitation of Arctic natural resources more profitable than before. These regions are located northeast of Finland. What role will Murmansk’s northern location have in the new, rapidly developing transport system? What impact will the fact that the Murmansk Region is located relatively close to key market areas – the European Union and the increasingly important eastern coast of the United States – have on the development options for the region? How will other geographical factors, such as an ocean port that is ice-free the year round, affect the development options available to the Murmansk Region? What effect will the change have on the development of industry and logistics in the Murmansk Region and how will it affect social trends there?

The business structure of the Murmansk Region consists not only of activities related to national defence but economic activities typical to high-resource regions in general: extraction and pre-processing of natural resources, particularly mining and the related ore processing, apatite mining and the fishing industry. The mining and metal-processing industry, which is very important to the region, has found its way to a new global market, but tough competition is forcing production plants to reduce their workforces as well as modernize their technologies. The rationalization of industry has resulted in outmigration, particularly from communities relying on a single industrial

The major projects in energy production, for example, and their time schedules will impact on the development of the Murmansk Region. For example, the schedule for the opening of the Shtokman gas field and the Murmansk or Indiga oil pipeline project can be linked to the driving forces. The author has examined the development of the Murmansk region in the light of three scenarios until 2025. The scenarios are based on the Delphi method and the three Delphi panels which were Murmansk Panel, Moscow Panel and the International Panel. Scenarios 1 and 2 represent the extremes in or the limits of the most probable scenario for the development of the Murmansk Region not leading to an actual economic disaster. Shtokman gas field is in operation in Scenario 1. Scenario 3 represents an unlikely but still possible deep regression in the world economy and a slump in the oil price.

Scenario 1 – ‘Market forces and democracy are strengthening and values developing’

Scenario 1 is summed up in the comment of one of the international participants in the panel, which presents the following main vision and key actions: The Barents region will be as active as the Persian Gulf, exporting oil and gas. The region will become a base for offshore operations, with global importance over the next 200 years. There will be a large amount of spin-off activity. All this, however, will require changes in Russian legislation. Exclusion of foreign actors from investments, which is currently the greatest obstacle, must be eliminated to allow free movement of capital.

Scenario 2 – ‘Authoritarianism is increasing and a regulated economy prevails’

Here, the development will be slower than in the previous scenario. Taking advantage of favourable trends in the world economy, Russia will attempt to launch the Shtokman operations and other large energy projects on its own. The projects will start slowly and have less impact on the development of the region than in Scenario 1.

Scenario 3 – ‘Problems are accumulating and the oil price is sinking’

In this scenario, all or some of the wild card events considered possible but unlikely by the participants in the panel will occur. The scenario is largely built on the assumption that the price of oil will fall; this will be preceded by an increasingly authoritarian trend in society. The price of oil may plummet because of a slump in the world economy, a crisis or sudden peace in the Middle East or a pandemic disease. Other wild cards may also emerge, such as an environmental disaster or youth riots, but these will be limited and can even provide an exit from a crisis.

In the vision for the most likely future operations the Shtokman field would be started up in 2020-2025 provided that international capital and technology from international enterprises, for example, would be available for the region. It is very likely that the population will be smaller than today. Materialization of investments in Shtokman will change the course of the population trend, at least locally. In a probable scenario, communities relying on large-scale mining or metal-processing industries alone will not be able to maintain their population bases at the current level, even if the volume and value of their production is higher than today.

Findings and recommended political actions – A need for innovative activities: Profitable exploitation of the natural resources in and around the Murmansk Region will require development of infrastructure and the systems for producing the resources. This highlights a need for a consensus and partnership between local and federal actors governing the infrastructure with regard to sharing the benefit from investments in the region. Finding economically lucrative solutions plays a key role in investments that will bring cost savings in transport technology, for example. Finding new, lucrative transport and production solutions for the high-cost Arctic region stresses the importance of innovation activities, particularly the creation of a network of research institutes and enterprises in the fields of transport and logistics, energy production and the mining and metal-processing clusters. Thus far, local enterprises have sought innovative solutions for transport technology and logistics in a centralized manner from abroad, e.g. from Finland.

Murmansk will form an important logistic gateway from north-western Russia to the world, enabling transport of natural resources and processed goods to the world market. The development of the logistic gateway will mostly depend on trends in the world economy as well as the prices of raw materials, such as oil and minerals.

The structure of business life in the Murmansk Region in the future can be markedly different from the present situation, even if the current structures of industries, particularly the metal-processing and mining industries, retain their central role in the region’s economy. Future business will require a workforce and an infrastructure adapted to Arctic conditions and communities.

Yrjö Myllylä

Managing Director, Doctor of Social Sciences

RD Aluekehitys Oy”

Literatures

Myllylä, Yrjö (2010). The Murmansk region’s growing importance in the energy economy and logistics creates opportunities also for Finnish companies. In the book: Kuusi, Osmo & Hanna Smith & Paula Tiihonen (eds.) (2010). Russia 2030 based on contracts. Publication of the Committee for the Future 6/2010. 170-180. <http://web.eduskunta.fi/dman/Document.phx?documentId=vy14010113558959&cmd=download>

Myllylä, Yrjö (2010). The Development of Murmansk Region in the light of three scenarios. In the book: Nysten-Haarala, Soili & Katri Pynnöniemi (eds.) (2010): Russia and Europe: from mental images to business practices. Papers from the VII International Conference of Finnish Russian and East European Studies and other writings. Kymenlaakson ammattikorkeakoulu, University os Applied Science. Research and Reports, Series B, N. 65. 61-79. <https://yrjomyllyla.wordpress.com/2012/08/03/the-development-of-murmansk-region-in-the-light-of-three-scenarios/>

Myllylä, Yrjö (2008). Industrial, Logistic and Social Future of the Murmansk Region – Summary of the Doctoral Dissertation by Yrjö Myllylä. 64 p. Publications of the Ministry for Foreign Affairs of Finland 3/2008.
Sponsored by Cargotec, Aker Arctic Technology, Finstaship, Lapland Chamber of Commerce, Municipality of Salla, Barents Group Ltd and Management & Transportation Experts Matrex Oy <https://yrjomyllyla.wordpress.com/2013/08/02/rd-publication-to-promote-exports-industrial-logistic-and-social-future-of-the-murmansk-region-until-2025/>

Myllylä, Yrjö & Oleg Andreev & Vesa Rautio (2008). Where are the hubs and gateways of development? Developments in Murmansk Oblast. 182-199. In Rautio, Vesa & Markku Tykkyläinen (eds.): Russia’s Northern Regions on the Edge. Kikimora Publications. University of Helsinki.

Myllylä, Yrjö (2007). Russia tries to control the transport routes of its own products itself. Baltic Rim Economies, expert article 158. 21.12.2007. <expert_article158_62007>

Myllylä, Yrjö (2006). The future of the Murmansk Oblast assessed by three Delphi panels. Fennia 184:1. 53-73. <http://ojs.tsv.fi/index.php/fennia/article/view/3732/3523>

Myllylä, Yrjö & Oleg Andreev (2005). The Development of the North-West Russia and Delphi method – evaluation of the industrial, social and logistical developments in the Murmansk Oblast. Nordia Yearbook 2005. Nordia Geographical Publications Vol 34:4. p. 37-48. Publications of the Department of Geography, University of Oulu and Geographical Society of Northern Finland.