”The Development of Murmansk Region in the light of three scenarios”

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, IN ENGLISH, METODI, O. YHDYSKUNTASUUNNITTELU JA MAANKÄYTTÖ

Yrjö Myllylä

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”1. Introduction and objectives

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This article presents the development of the socio-spatial structures and the
geoeconomic position of the Murmansk Oblast (Figure 1) through the year
2025. The starting point for the analysis is that the appropriate planning of
industry, logistic infrastructure and population is inadequate without a wellgrounded
assessment of the region’s present and future economic conditions and
contingencies. Key concepts of study are Strong Prospective Trends (Toivonen
2004; Kuusi 2008; Naisbitt 1984) and Cluster (Porter 1990; 2006; Malmberg &
Maskell 2002). The study is based on the Delphi method, which is commonly
used within the discipline of futures studies (on the method, see Myllylä 2008a;
Kuusi 1999; Kuusi 2002; Turoff 1975, 2002, 2009; Sackman 1975; for more on
futures studies, see Bell 1997a; 1997b). The main question to be answered involves
what future socio-economic scenarios the Delphi method provides for the
Murmansk Oblast. Figure 1 shows the target region for this study, the population
concentrations and the administrative districts and major towns today.

This study is based on material from interviews with a panel of specialists in the
Murmansk Oblast and an analysis of on-going socio-economic development in
the region, together with material from interviews with two additional panels,
one consisting of specialists from Moscow and St. Petersburg and the other an
“international” panel mainly consisting of experts from Finland (See Table 1).

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2. The background and need for the study

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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 (Tykkyläinen
2003). 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.

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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 (Figure 2)? 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?”

Source pages 61-62:

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 Kotka, Finland 2010 Publications of Kymenlaakso University of Applied Sciences. Series B.
Research and Reports. No: 65. 61-79.

See all article:

<http://aluekehitys.internetix.fi/fi/sisalto/05_julkaisut/kyamk2010>

<https://publications.theseus.fi/bitstream/handle/10024/32599/Kyamk_B65_nettiversio.pdf?sequence=1>

Contributor

Yrjö Myllylä, Doctor of Social Sciences, has been working as a researcher in the
Department of Geography at the University of Joensuu (Current University of
Eastern Finland). In his doctoral dissertation (2007), Dr Myllylä evaluated the
industrial, social and logistic developments in the Murmansk region by using the
Delphi Method. His scientific interests also include innovative entrepreneurship,
clusters and internationalization of small and medium size enterprises. Dr Myllylä
currently works as a research consultant at Oy Aluekehitys RD.

The growth area of the Arctic and Baltic Sea in the focus of Finland’s interests

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, 9.1 Matkailu, 9.2 Kauppa, rakentaminen, ICT, hyvinvointi, palvelut, IN ENGLISH, METODI, O. YHDYSKUNTASUUNNITTELU JA MAANKÄYTTÖ

TEM 43/2010: Arktinen ja Itämeren kasvualue Suomen intressien polttopisteessä.

Myllylä, Yrjö (2010). The Growth area of the Arctic and Baltic Sea in the focus of Finland’s interests. 92 p. Ministry of Employment and the Economy, Regional Development 43/2010. Edita Publishing Ltd, Helsinki.

Abstract

The increasing interest of the great powers in the Arctic and the Baltic Sea region, world economic growth and rise of raw material prices, Russia’s geopolitical movement further to the North, climate change and the growth of the trafficability of the North- East Passage are background factors for a change which offers new possibilities for the economical life and employment in Northern Europe.

The report has made suggestions, which could promote the common interest of Finland as well as the whole area and in the implementation Finland could provide special skills, values and a good position in the heart of the region. The dissertation “Industrial, Logistic and Social Development of the Murmansk Region until 2025” by the author where he deals with the future of Murmansk and Northwest Russia would form the most important separate background research to be utilised.

The main conclusions are summarized below in 20 initiatives. In these the main idea and arguments are presented in detail in the actual text of the report. Statement of the report is presented in a total of 70 proposals of development: 1. Northern concept of trust – use of the concept, 2. The research and development program of Arctic transportation, energy and environmental technology, 3. Finland to participate in Aurora Borealis, a ship from which arctic research could be done, 4. An international cluster developing project together with operators in the Murmansk region 5. Baltic Sea Region, preparation of scenarios, 6. Future economic profiles of the Republic of Karelia, Arkhangelsk Oblast, St. Petersburg and the Leningrad region, 7. The Northern Dimension cluster strategy – clusters developed in Finland from the perspective of the Northern Dimension, a regional profiling, 8. Finland and Northwest Russia as part of the development of tourism in Northern Europe, 9. International language training in the undisturbed environment of the centers of touris , 10. The Russian capital in Finland, 11. New Finnish mining company in Helsinki and London Stock Exchange – business idea should be prospecting, mining rights acquisition in the Barents Region including Finland and the sale of licence rights, 12. Use of the ”Vyborg-option “ – utilisation of the position of the region in Finnish Arctic and offshore shipbuilding skills for the need of Vyborg and St. Petersburg shipyards, 13. Arctic research vessels – a new strategic opportunity, 14. Offshore technology for Arctic conditions, 15. Arctic oil fighting vessels – a platform for innovation in the Baltic Sea, a growing market, especially in the Arctic area, 16. Supply of energy-saving technology and creation of conditions for implementation, 17. Renewable energies, i.e. bio- and wind-energy co-operation, 18. Natural gas network and the development of distribution system in Finland, taking into account the transfer possibilities of wood- and biogas 19. Company Visits – in order to present the technological know-how and Finnish transportation service to people who decide on the logistic of the harbours and shipyards in Murmansk, northwest Russia and the North-East Passage area, 20. Processing of proposals 1-19 for regional projects.

The author is of the opinion that the most important thing to create an impact would be to implement proposal number 20. According to the expert feedback, in order to promote employment the most important proposals are 2., 17., and 7., 8., 11., 14. and 20.

”The North-East Passage is already a fact”

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, 9.1 Matkailu, 9.2 Kauppa, rakentaminen, ICT, hyvinvointi, palvelut, IN ENGLISH, O. YHDYSKUNTASUUNNITTELU JA MAANKÄYTTÖ

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)