Passkey Providers and Enabling Portability: FIDO Paris Seminar.pptx
Shipping Across The Arctic Ocean Position Paper
1. Shipping across the Arctic Ocean
A feasible option in 2030-2050 as a result of global warming?
Research and Innovation, Position Paper 04 - 2010
2. This is
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Contact details:
Lars Ingolf Eide: lars.ingolf.eide@dnv.com
Magnus Eide: magnus.strandmyr.eide@dnv.com
Øyvind Endresen: Oyvind.Endresen@dnv.com
3. Summary
Arctic sea ice is in rapid decline, and this may open up new opportunities
for economic activity. This paper describes a scenario for future shipping
activity and emissions in the Arctic, specifically related to transpolar
container shipping and petroleum extraction. The future Arctic transit
shipping activity level and the resulting emissions have been modelled by
jointly assessing the volume of global seaborne trade and the attractiveness
of selecting the Arctic transit route rather than traditional sea routes (e.g.
via Suez). Future shipping activity and emissions related to petroleum
extraction have been estimated based on projected production data.
The results show that part-year arctic transit may be economically attractive
for container traffic from North Asia between 2030 and 2050. With a
projected Arctic trade potential of 1.4 million TEU in 2030, this amounts
to a total of about 480 transit voyages across the Arctic in the summer of
2030. For 2050, the Arctic trade potential rises to 2.5 million TEU and the
total number of Arctic transit passages (one-way) in the summer of 2050
is about 850.
Due to shorter travel time and the need for a smaller fleet to carry the
same amount of cargo between Asia and Europe by going across the Arctic
compared with the route via the Suez Canal, CO2 emissions are reduced
by 1.2 Mt annually in 2030 and by 2.9 Mt annually in 2050.
4. Introduction
During the last decades of the 20th century and the first how the changing climate of the Arctic may affect shipping
decade of the 21st century, the Arctic has experienced and petroleum-related activities. Recently, DNVR&I has
some of the most rapid temperature increases on Earth. contributed to several papers and reports related to these
On average, the mean annual air temperature has topics (Bitner-Gregersen & Eide 2010; Dalsøren et al.,
increased at approximately twice the rate of the rest 2007; Mejlænder-Larsen, 2009; Peters et al., in preparation.
of the world. Reductions in sea ice extent, particularly Nilssen et al., 2010; Eide et al., 2010a).
in summer, decreased ice thickness, melting glaciers,
thawing permafrost, and rising sea levels are all indications This paper gives a short overview of past and present
of warming in the region over the last three decades. development of shipping activities in the Arctic, and
Acceleration in these climate trends is projected for develops future scenarios for shipping activity and CO2
the next decades of the 21st century (ACIA, 2005; IPCC, emissions towards 2050. The paper separately addresses
2007a). the future transit traffic and the ship traffic connected to
future oil and gas activities. Other types of ship activities,
Seaborne cargo transport in Arctic waters has previously such as tourism, fisheries, and national shipping, are not
been limited (PAME, 2000; Corbett et al., 1999; Endresen considered. Projections for ice conditions towards 2050 are
et al., 2003). Increased melting of Arctic sea ice may lead also given, as these will significantly influence the future
to a longer navigation season, improved accessibility for development of ship activity and petroleum activities in
shipping, and extended use of the shipping routes along Arctic.
the margins of the Arctic basin (the Northern Sea Route,
NSR, and the Northwest Passage, NWP). Travel distance The future Asia-Europe Arctic transit shipping activity and
between Europe and the North Pacific Region can be the resulting emissions in 2030 and 2050 are estimated
reduced by more than 40% compared with current sea using a new model developed by DNVR&I (Nilssen
routes by using the NSR, and by even more if sailing et al. 2010; Nilssen et al., in preparation) as part of the
directly across the North Pole becomes possible. Norwegian Research Council project, ArcAct (Unlocking
the Arctic Ocean: The Climate Impact of Increased
Furthermore, with the expected increase in demand for Shipping and Petroleum Activities) 1. The model is used
energy, combined with a decrease in production in mature to compare costs for a selected Arctic sea route with the
petroleum provinces, in the period 2010-2020, there may traditional Suez Canal route, by applying projected ice
be an increasing pressure to develop oil and gas resources data, modelled speed and fuel consumption of ships in
in the Arctic region. Continued melting of Arctic sea ice ice, and by adding costs of building and operating ships
will result in easier access to these resources and may open capable of Arctic operation (e.g. ice class). The cost
up for more exploration and production activity, as well as
increased ship transport of hydrocarbons. 1 The principal objective of ArcAct is to quantify the climate impacts,
in terms of radiative forcing, from potentially increased oil/gas and
shipping activities in the Arctic regions due to diminishing ice cover. The
DNVR&I has been involved in several research projects consortium consists of CICERO (responsible), the University of Oslo, the
that aim to establish knowledge and understanding on Norwegian Institute for Air Research, and DNV.
4
5. comparison is made for routes originating in several Asian
ports. If the Arctic route from a given port is favourable
in economic terms, the model determines the number of
passages and resulting emissions based on the projected
cargo volume to be transported and the selected ship
concept (i.e. cargo capacity and sailing season).
Future shipping activity and emissions related to petroleum
extraction have been estimated based on projected
production data provided by ArcAct project partners.
The emissions from tanker vessels have been modelled by
constructing shipping routes and locating transhipment
ports based on the production data. For supply vessels,
a simplified statistical approach is used to correlate the
amount of fuel consumed with the amount of petroleum
extracted.
This paper is divided into nine sections. Section 2
discusses the challenges associated with operations in the
Arctic under the current ice and metocean conditions,
Section 3 reviews shipping activities in the Arctic,
and Section 4 outlines a future ice scenario. Section 5
presents the model, with assumptions and input data, and
compares the results for the most economically favourable
shipping scenario with other studies. Section 6 indicates
possible future shipping activity associated with oil and
gas activities. Challenges associated with the expected
increase of activity in the Arctic regions are summarised
in Section 7. Conclusions are provided in Section 8 and
recommendations in Section 9.
5
6. Present ice and metocean conditions
and challenges connected to operating
in the Arctic
The physical parameters that pose challenges to operations Despite the challenges listed, the dramatic changes in sea
in the Arctic are mainly related to the high latitudes and ice conditions over the last three decades, particularly in
low air and sea temperatures. These were reviewed in the summer, have spurred speculations that the Arctic Ocean
Barents 2020 project (Eide, 2008) and include: may become an alternative sea route between Asia and
• Sea ice and icebergs that represent hazards to Europe and North America.
the integrity of ship hulls and platforms.
• Icing from sea spray, precipitation, and fog, which
raise both stability problems and other safety issues.
• Polar lows (small storms that are difficult to
detect and predict).
• Wind chill, i.e. combinations of low temperatures
and strong winds, which is a safety and health issue.
• Remoteness, with implications for rescue,
emergency operations, and communications.
• Darkness in winter.
• Reduced visibility from fog and precipitation.
• Less reliable weather forecasts than in e.g.
the North Sea.
In general, information on the the meteorological and
Figure 1. Summer and winter development of sea ice extent in the Arctic
oceanographic conditions, like winds and waves, in the 1979-2010, deviations from mean values for the years 1979-2000.
parts of the Arctic with seasonal or all-year ice cover is poor. (Perovich et al. (2009) with March 2010 added)
Sea ice in the Arctic has shown dramatic changes over
the last 30 years, (see Figure 1; updated from Perovich
et. al., 2009). The extent of summer ice (September) has,
on average, declined by roughly 9 % per decade between
1979 and 2009, and the extent of winter ice (March) by 2.5
% per decade. September 2007 had the smallest ice extent
on record. Ice thickness has also decreased considerably
in the last three to four decades. Based on sonar data from
submarines for 1975 – 2000 and satellite data from 2004
– 2008, Perovich et al. (2009) estimated a reduction of
mean winter sea ice thickness from 3.4 m in 1975 to 1.9
m in 2008 (via a maximum of 3.6 m in 1980), caused by
decreasing amounts of old and thick ice.
6
7. Shipping activities
in the Arctic
The seaborne cargo transport in Arctic waters has 2000). In 2009, the Bremen-based Beluga Group became
previously been limited (PAME, 2000; Corbett et al., 1999; the first Western company since the war to transit the NSR,
Endresen et al., 2003). An extensive study of present ship cutting 4000 nautical miles (7400 km) off the journey
activity in the Arctic was undertaken by PAME (2009). between Ulsan, Korea and Rotterdam (Beluga Group,
The study used 2004 as the base year, and concluded that 2010).
shipping activity was dominated by community re-supply,
fishing, and tourism. There is also export from a few large
mining operations in Alaska (zinc) and Russia (mainly
nickel but also other minerals), according to Glomsrød
and Aslaksen (2006, 2009) and Ocean Futures (OF, 2010).
Figure 2, from PAME (2000), shows the main traffic routes
used by commercial ships in the Arctic. Note that some
icebreakers and submarines have also visited the North
Pole.
Community re-supply is taking place along the NSR and
NWP. Fishing mainly takes place in the ice-free waters
around Iceland and in the Bering, Barents, and Norwegian
Seas, and tourism is at its greatest intensity along the coasts
of Northern Norway, Southwest Greenland, and Svalbard
(PAME, 2009).
Presently there is limited transport of oil and gas by ships
from the Arctic, and most of it takes place on the Eurasian Figure 2. Major ports and navigation routes in the Arctic,
side. The part of the oil export from Russia that passed reported by PAME (2000)
the Norwegian coast increased from around 4 Mt (million
tonnes) in 2002 to 16.5 Mt in 2009 (The Norwegian Coastal
Administration, 2010).
Commercial transit traffic, except tourism, has taken place
only along the NSR, which was opened to foreign ships in
1991. The transit traffic peaked in 1993, when, according
to Ragner (2000) and Brigham and Ellis (2004), more
than 200 000 tonnes of cargo were carried by Russian ships
between Asia and Europe. This fell to zero in 1997, and
remained at that level for the rest of the century (Ragner,
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8. A possible future ice
scenario
All climate models show that Arctic ice cover is expected Some consequences may be:
to continue diminishing through the 21st century • Changing physical and mechanical properties
(Overland and Wang, 2007; Stroeve et al., 2007; Wang and of sea ice.
Overland, 2009). Eide et al. (2010a) extracted future ice • Changes in frequency and size of ridges
concentration and thickness for the years 2007-2100 for the and hummocks.
A2 emission scenario (IPCC, 2007b) from the Community • More calving, leading to more, but smaller, icebergs.
Climate System Model (CCSM3) developed by National • Higher waves and more sea spray icing in ocean areas
Center for Atmospheric Research (NCAR) (Collins, 2006). that will become ice free.
This model was found to be close to observations between • More polar lows where the ice disappears.
1972 and 2007 (Overland and Wang, 2007; Stroeve et al., • More summer fog.
2007; Wang and Overland, 2009). The A2 scenario is one • Changed tracks of cyclones and anticyclones
with modest reductions in CO2 emissions compared with in the Arctic.
“business as usual”.
Presently, the impacts on the factors listed above from
Figure 3 shows the estimated ice concentration and the reduced ice cover as well as from other effects of global
ice thickness for March and September 2030 (Figure 3a) warming have not been sufficiently investigated. There is
and 2050 (Figure 3b), as derived with CCSM3 for the a need to obtain better understanding of how the wind
A2 emission scenario. It indicates that ice extent can be and wave conditions experienced along an Arctic route
expected to continue decreasing into the 21st century, between Asia and Europe will change as a result of global
and that the changes in winter ice extent (March) will warming, with emphasis on the extremes.
still be less than the changes in summer (September).
The decrease in ice thickness is expected to continue in
summer as well as in winter, due to reduced amounts of
multi-year ice.
In addition to the modelled changes in ice cover and ice
thickness, it is believed that the actual ice properties, along
with iceberg occurrence rates and metocean conditions,
could change in the Arctic as consequences of global
warming.
8
9. MARCH SepteMbeR MARCH SepteMbeR
Figure 3a. Sea ice concentration (upper) and sea ice thickness (lower) Figure 3b. Sea ice concentration (upper) and sea ice thickness (lower)
for March (left) and September (right) 2030 as derived from the CCSM3 for March (left) and September (right) 2050 as derived from the CCSM3
model with IPCC emission scenario A2. model with IPCC emission scenario A2.
Data downloaded from http://www.natice.noaa.gov. Data downloaded from http://www.natice.noaa.gov.
9
10. Scenario for transit
shipping in the Arctic
Compared with the traditional sea routes, transiting the SeleCting An ARCtiC Route
Arctic will always be associated with higher hazard levels Prior to comparing the economics of Arctic transit vs. Suez
(e.g. sea ice and harsh weather), a higher risk of reduced transit, the optimal route across the Arctic Ocean should
service reliability, and higher costs per unit of distance be determined, considering transit distance and ice
travelled (ice strengthening, ice breaker support etc). For conditions. Four alternative routes have been considered,
shippers to choose the Arctic route, the benefits must be as shown in Figure 4.
substantial and clearly outweigh the disadvantages. These
benefits may be found in less travel distance, which can Route 1 is close to the traditional NSR, passing largely
substantially reduce fuel cost, and shorter travel time, within Russian territorial waters. Route 2 is a modified
which may translate into higher income due to lower version of the first but avoids some of the shallow areas,
inventory-holding costs and increased productivity. and is thus more appropriate for larger ships.
Emission reductions may also result in reduced costs,
assuming that future external damage costs caused by
ship emissions are internalized (e.g. by introduction of tax
regime or quota market).
In the following section, the developed model (Nilssen
et al., in preparation) is outlined, along with the input
data applied, and the assumptions made to estimate the
future Asia-Europe Arctic transit shipping activity and the
resulting emissions in 2030 and 2050.
The model calculates the costs of a selected Arctic sea
route versus the Suez Canal route, enabling a comparison
of the alternatives. Costs are calculated by utilizing
detailed projected ice data, by modelling speed and fuel
consumption of ships in ice, and by adding additional
costs from building and operating ships suitable for Arctic
operation (e.g. ice class). The comparison is made for
routes originating in different Asian ports. If the Arctic
route from a given port is favourable in economic terms,
the model estimates the number of passages and emissions
based on the projected amount of cargo to be transported Figure 4. Arctic transit routes used in the Arctic transit shipping analysis.
The Exclusive Economic Zone of the Russian Federation is shown with
and the selected ship concept (i.e. cargo capacity and
diagonal hatching. The orange line marks the Arctic according to the
sailing season). definition of the Arctic Council (http://arctic-council.org/filearchive/
AHDRmap_gen.ai
10
11. Route 3 is designed to lead vessels mostly outside the study has settled on Route 3 for comparison of costs. Note
Russian Exclusive Economic Zone (EEZ), whereas Route that the difference in summer ice thickness between route
4 goes directly across the North Pole. 2 and route 3 is not very large (Figure 3), and that route 3
is shorter than route 2. Due to the currently untenable and
Figure 5 gives an example of vessel speed due to ice future uncertain fee level associated with route 2, route
resistance for a 6500 Twenty-foot Equivalent Unit (TEU) 3 has been selected for both 2030 and 2050 in this study.
container ship with bulbous bow in summer 2030, using Route 4 is not much shorter than Route 3 and has worse ice
the ice conditions in Figure 3a. These speeds are used to conditions (Figure 3)., and is, therefore, not considered a
calculate transit times. After evaluating the combined effect viable option.
of fuel consumption, transit time, future ice conditions,
and uncertainties in fee and tax regimes, this Furthermore, it is noted that despite the successful transit of
the Manhattan through the NWP in 1969 (e.g. Gedney and
Helfferich, 1983), traffic through NWP is not considered
plausible. This is because the navigation channels suitable
for large ships are likely to continue to have difficult ice
conditions for many years ahead (Transport Canada, 2005;
Wilson et al., 2004), making the route unreliable with
respect to transit time, and therefore less attractive to the
shipping industry than the eastern alternatives.
ASSeSSing CoMpetitiVeneSS oF ARCtiC RouteS
The dominant seaborne trade volume between Asia and
Europe is containerised cargo (UNCTAD, 2009). Thus,
the analysis is concentrated on this segment.
Future Asia-Europe cargo volumes are estimated by
translating the IPCC A2 scenario projections for global
economic development into global seaborne trade volumes
using the strong historical correlation between Gross
Domestic Product (GDP) and seaborne trade, as reported by
the EU project Quantify (Endresen et al. 2008). In the ArcAct
project, these global projections were modified for use on the
Figure 5. Vessel speed of a 6500 TEU container ship as functions of ice Asia-Europe trade. Considering that the Asian economies are
conditions in summer 2030 as projected in Figure 3a.
likely to increase more than the European economies, and
that both Asian and European trade with current 3rd world
countries may be expected to grow disproportionately, the
11
12. SCenARio DeSCRiption oF SCenARio ASSuMptionS
Baseline scenario Regular Suez trade, 6500 TEU • All year operation Suez trade
conventional container vessels.
S1, Arctic All-year Arctic operation of 5000 • All-year Arctic operation along route 3
Scenario 1 TEU double-acting container • The double-acting vessels are assumed to have 120% higher building cost and 50%
vessels (bulbous bow and ice- higher operational cost than their conventional counterparts.
breaking aft, a new concept • Ice data based on IPCC scenario A2
described in Arpiainen and Kiili • The speed of the double-acting vessels decreases almost linearly with ice thickness, from
(2006)) operating a liner service. 19 knots in open water to zero knots in 2.5 m ice.
S2, Arctic Part-year Arctic operation of a • Part-year Arctic operation along route 3. The sailing season in 2030, is assumed to be
Scenario 2 fleet of identical 6500 TEU PC4 100 days, and in 2050, 120 days. Shorter and longer seasons are also consider, in order
ice-classed container vessels to investigate the sensitivity.
(bulbous bow). The container • The vessels with ice class are assumed to have 30% higher building cost and 50%
vessels with reinforced hulls and higher operational cost than their conventional counterparts.
bulbous bow operating a liner • Ice data based on IPCC scenario A2
service that transits the Arctic • The speed of the ice-classed vessels decreases from 24 knots in open water to zero
during the summer, when the knots in 1.5 m thick ice.
ice cover is at its minimum, and • The hulls are reinforced according to the requirements of ice class PC4 (International
uses the Suez Canal the rest of Maritime Organization, IMO, 2002, 2009; International Association of Classification
the year. Societies, IACS, 2007), which is deemed sufficient to handle Arctic sea ice conditions
during the summer.
Table 1: Summary of the the baseline and two Arctic scenarios used in the fleet-level economic analysis
Asia-Europe trade increase was assumed to be lower than Tokyo (T), Hong Kong (HK), and Singapore (S). Each
that of global trade. Thus, in this study the Asia – Europe port is a representation of a wider geographical area, and
trade volume was assumed to grow by 40 % from 2006 to is designated as a Hub to reflect this (e.g. Tokyo hub).
2030, and by 100 % from 2006 to 2050. This gives a total
trade potential between the Tokyo hub and Europe of 3.9 It is realised that although specific ports are selected for
million TEU in 2030, and 5.6 million TEU in 2050. practical implementation in the model, in reality the trade
volumes will be distributed more evenly between multiple
For the modelling purposes of this study, all future Asia- ports in the selected regions.
Europe traffic is represented by trade between one
European port, Rotterdam (R), and three Asian ports;
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13. YeAR SCenARio CoMpetitiVeneSS FoR Route 3
S1 • Not competitive for any of the hubs.
2030
S2 • Competitive for the Northern (Tokyo) hub.
S1 • Not competitive for any of the hubs, unless bunker price above $900/tonne
2050 S2 • The Northern (Tokyo) hub will be competitive.
• The Hong Kong hub will be competitive for optimistic estimates (i.e. large values) of
bunker price and length of summer season, but the probability of encountering these
parameter values for which this hub is competitive is deemed low
Table 2. The competitiveness for future transit traffic along route 3
The Asia – Europe cargo volumes are assumed to be split in Table 1. The voyage cost calculations for each scenario
equally between the three hubs in 2030 and 2050. For each include fuel costs, explicit modelling of the effect of
port pair (R-T, R-HK and R-S) and for each reference year transiting through ice, and additional investments for
(2030 and 2050) the future voyage costs for arctic transit is ice strengthening (e.g. reinforced hull and propulsion
compared against voyage cost for Suez transit. The baseline systems). For each port pair, future cargo volumes are then
scenario is a fleet of identical 6500 TEU container ships in assigned to the most competitive alternative, which gives
a liner service via the Suez Canal. This baseline scenario is the number of transits in 2030 and 2050.
compared with two different scenarios for shipping via the
Arctic: S1) All-year Arctic operation of 5000 TEU double- Table 2 summarizes some results from the analysis. For
acting2 container vessels; and S2) Part-year (summer) each particular hub, for a given bunker price (and in the
operation of 6500 TEU PC4 ice-classed3 container vessels. case of scenario 2, for a given length of the summer season),
The baseline and the two Arctic scenarios are summarized the model yields a difference in cost between the Arctic
scenarios and the baseline scenario. In the scenarios, the
2 Double-acting vessels have a regular bulbous bow in front and an most likely future bunker prices are assumed to be $600/
ice-breaking stern. The vessel is propelled by pod thrusters that enable tonne in 2030 and $750/tonne in 2050.4 In scenario 2,
the vessel to move efficiently both ahead and astern. In open water, the the most likely sailing seasons are assumed to be 100 days
vessel moves as normal, but in ice the vessel turns around, using the stern
for ice-breaking (see also Table 1). Note that, to date, only smaller vessels
have been built using this concept, although designs exist for vessels of 4 According to the OECD ENV-Linkages model the oil price will be
the size used in this study. about 20 % higher in 2030 compared with the 2010 level, and about
50 % higher in 2050. With a current bunker price at about $500/tonne,
3 PC4 is a notation used for vessels that should be able to handle and assuming that the oil price development is a reliable proxy for bunker
“Year-round operation in thick first-year ice which may include old ice price development, the 2030 bunker price is estimated to $600/tonne
inclusions” (see also Table 1). and the 2050 price to $750/tonne.
13
14. in 2030 and 120 days 2050. These parameters are used of global ship emissions in 2050 (Buhaug et al., 2009;
to evaluate the economic attractiveness of Arctic route 3 Endresen et al., 2010).
relative to the baseline. For sensitivity considerations, a
wider range of values for bunker price and sailing season The model has been tested against variations in fuel
have also been investigated. The effect of this is also price and length of sailing season, and the conclusions
commented upon in Table 2. presented are robust with regard to these factors. Future
work with the model should be extended to include
The results show that Arctic transit will be economically variations in other input factors, such aschoice of IPCC
attractive for part-year container traffic from the Tokyo hub emission scenario, future ice scenario, ship size and ship
in 2030 and 2050. Of the projected total trade potential of concept, performance of the vessels in ice, cost of building
3.9 million TEU from the Tokyo hub in 2030, 1.4 million and operating ice class vessels, as well as possible stricter
TEU is estimated to be transported across the Arctic in the requirements on fuel quality and, therefore, higher
sailing season. This amounts to a total of about 480 transit
voyages across the Arctic in the summer of 2030. For 2050,
the total trade potential rises to 5.6 million TEU for the
Tokyo hub, with 2.5 million TEU estimated for the Arctic,
giving about 850 Arctic transit passages (one-way) in the
summer of 2050. The predicted amount of containers
that will be transported through the Arctic corresponds to
about 8 % of the total container trade between Asia and
Europe in 2030, and about 10 % in 2050. The numbers
of passages were then used to calculate fuel consumption
and ship emissions.
Figure 6 shows the estimated annual fuel consumption by
the fleet of container ships along Route 3 in 2030. The
fuel consumption is converted to emissions using emission
factors. For CO2 this gives emissions in the Arctic of 3.7 Mt
in 2030 and 5.6 Mt in 2050.
Due to shorter travel time, fewer ships are needed to carry
the same amount of cargo between Asia and Europe by
going across the Arctic compared with the route via the
Suez Canal, and the global emissions are reduced by 1.2 Mt
Figure 6. Aggregated fuel consumption for the needed fleet of container
in 2030 and by 2.9 Mt in 2050, respectively. These numbers ships crossing the Arctic Ocean in 2030. The high fuel consumption
represent reductions of roughly 0.1 % in 2030 and 0.15 % coincides with heavy ice conditions
14
15. fuel prices on the Arctic routes than for the Suez route. which is less than the estimate of 1.78 Mt presented in this
Regularity issues should also be considered, as well as study, but of the same order of magnitude. However, their
logistic issues like use of surplus vessels during the Arctic study is not limited to container ships and considers only
sailing season. It is also noted that only cost reductions fuel consumption along the NSR, whereas this study also
are considered in this study; no allowance for potentially includes the parts of the journey that lie outside NSR.
higher incomes, due to lower inventory-holding costs and
increased productivity, has been made. The estimated CO2 emissions calculated by Corbett et al.
(2010) appear to be significantly higher than presented
The two Arctic scenarios used in this study are relatively in this study. They give total emissions from all ship
straightforward, and are believed to represent viable traffic in 2030 and 2050, but they have also estimated the
alternatives. Other scenarios or concepts are conceivable. proportion that container ships represent of the total
One option is to deploy ice strengthened vessels only on traffic. Their estimates of the CO2 emissions from Arctic
the Arctic Ocean, and to transfer cargo to ordinary vessels container traffic in 2030 are 4.8 and 7.7 million tonnes for a
at purpose-built transhipment ports on the edge of the “business as usual” and high growth scenario, respectively.
North Pacific and North Atlantic oceans. For the 2050 the numbers are 12 and 26 million tonnes
CO2. These numbers are higher than presented in this
For this option, reduced investment in ice strengthened study by a factor 1.3 – 2 in 2030 and 2 – 4.6 in 2050. The
vessels would be countered by substantial investments in reason seems to be that Corbett et al. (2010) assume that
port infrastructure. All such scenarios will illustrate ways as much as 2 % and 5 % of global seaborne trade will be
to balance parameters such as infrastructure costs, ship shifted to the Arctic in 2030 and 2050, respectively.
investment, sailing season, and ice conditions.
CoMpARiSon to otHeR StuDieS
Several studies have tried to predict future transit shipping
activities and their emissions in Arctic waters (Ragner,
2000; PAME, 2000; Brunstad et al., 2004; Dalsøren et al.,
2007; PAME, 2009; Corbett et al., 2010; Khon et al., 2010;
Liu and Kronbak, 2010; Paxian et al., 2010), considering
different climate scenarios, regional developments,
geo¬political issues, ship types, reference year, and output
parameters.
Corbett et al. (2010) and Paxian et al. (2010) are the studies
most relevant for comparison with the results presented
above. Paxian et al. (2010) give a range of 0.73 – 1.28 Mt
for fuel consumption in the North-East passage in 2050,
15
16. Shipping related to oil and
gas activities
A quarter of the world’s total undiscovered petroleum As indicated in Figure 7, oil and gas produced in the
resources may lie in the Arctic (USGS, 2008; Gautier et Arctic parts of North America is assumed to be exported
al, 2009). As part of the ArcAct Project, Peters et al. (in by pipeline. This is very likely for fields in Alaska and the
preparation) used estimates of unproven resources Canadian provinces Yukon, Northwest Territories, and
published by USGS (2008) to estimate production profiles Nunavut, but may be questionable for potential production
until 2050, distributed between the hydrocarbon provinces in the Canadian Arctic islands.
of the Arctic. They also distributed the oil and gas export
from the different Arctic regions between pipeline and If all the oil and gas developments assumed by Peters et
ship transport. The future hydrocarbon production al.(in preparation) actually take place, total CO2 emissions
was estimated using the FRISBEE model (Framework from ship transport of oil and gas production and service
of International Strategic Behaviour in Energy and vessels in the Arctic will be 40 % higher than from the
Environment, see Aune et al., 2005). Arctic transit traffic in 2030 and about twice that from
transit traffic in 2050. The results presented are sensitive to
DNVR&I used the geographically distributed oil and change in input variables such as the estimate of unproven
gas production locations and export modes established resources, oil price, transportation mode, and fluctuating
by Peters et al. (in preparation) to estimate the ship oil and gas markets. About 50 % of the projected
movements and the resulting fuel consumption and hydrocarbon production in 2030 and 2050 will be gas,
emissions to air. For supply vessels, a simplified statistical according to the results of Peters et al. (in preparation).
approach is used to correlate the amount of fuel consumed The gas production will depend on the gas price, which is
with the amount of petroleum extracted. A moderate oil influenced by many factors. The recent prospect of shale
price was assumed ($80/barrel of oil equivalent (boe)). gas development exemplifies a possible influences on gas
Increasing the oil price would increase production, while price.
lowering it would reduce production (Glomsrød and
Aslaksen, 2009). Figure 7 shows transhipment ports and
possible transhipment routes of oil and liquefied natural
gas (LNG) in 2050 as used by DNVR&I.
The results indicate that 89 Mt of oil and natural gas
will be transported along the northern coast of Norway
in 2030 and 211 Mt in 2050. Of this, 87 Mt in 2030 and
199 Mt in 2050 will originate in Russia. These numbers
concur well with those reported by the Norwegian Coastal
Administration (2008) and PAME (2009). In contrast,
Bambulyak and Frantzen (2007, 2009) cite projections of
Figure 7. Transhipment ports (green asterisks) and transhipment routes
50–150 Mt oil per year for the next decade (i.e. before (black solid lines) in 2050. The orange line marks the Arctic according to
2020). the definition of the Arctic Council (http://arctic-council.org/filearchive/
AHDRmap_gen.ai)
16
17. Challenges from increased
shipping in the Arctic regions
The study presented herein, based on one possible scenario of the blowout in the Gulf of Mexico in April 2010,
for the ice conditions between 2010 and 2050, indicates but oil spills, resulting from shipping accidents, occur
that Arctic transit traffic and increased shipping related to regularly worldwide (e.g. Prestige, Heibei Spirit, Full City).
oil and gas production may occur by 2030, and continue Considering the added challenges of Arctic operations, the
to increase towards 2050. Other studies state that reduced risk of accidents may increase in these waters. Presently,
ice cover and easier export possibilities may, in addition, there are very few ways for recovering spilled oil from ice-
elevate production of other minerals and resources in covered waters. These factors need to be addressed in order
the area (OF, 2010; ACIA, 2004, 2005), increase tourism, to avoid severe ecological and economic consequences.
alter fishing patterns, and change community re-supply
options. This raises the need to discuss the adequacy of
current regulatory and governance regimes for the Arctic. SHip DeSign AnD opeRAtion FoR tHe ARCtiC
Below, some concerns are described that may arise from There are no internationally legally binding requirements
increased shipping and petroleum related activities in the for ship design or ice class specific for ships traversing
Arctic regions. the Arctic Ocean. IMO plans to issue updated voluntary
Guidelines for Ships Operating in Polar Waters (IMO,
enViRonMentAl ASpeCtS 2009) that address construction provisions, as well as
The shift in ship traffic implies that significant parts recommendations for equipment, operational guidelines
of emissions to air may be diverted to the Arctic from including crew training, and environmental protection
more southerly latitudes, with potential consequences and damage control. These guidelines are updates of an
for the climate, e.g. through deposition of black carbon earlier version (IMO, 2002), taking into account technical
(soot) on snow and ice, as well as local pollution, such developments since 2002 and including provisions for the
as increased acidification and enhanced surface ozone Antarctic region. They also take account of the Unified
formation. However, air pollution and climate impacts Requirements for Polar Ships of IACS (2007), which address
from shipping are not limited to the Arctic, and efforts aspects of construction for ships of Polar Class. The updated
to address global emissions will also benefit the Arctic. A IMO guidelines are intended to be applicable to new ships
range of emission reduction measures, such as using LNG with a keel-laying date on or after January 1, 2011.
as fuel, are available (DNV, 2009; Eide et al., 2010b). Waste
handling could be an issue in the Arctic due to inadequate SAFetY ASpeCtS
port facilities. Most discharges to sea and emissions to air Sailing across the Arctic Ocean will require improvements in
are regulated by IMO or regional conventions in the form a suite of safety issues, including charting and monitoring,
of upper limits. Noise from ships and other disturbances and control of ship movements in the Arctic (PAME, 2009).
are generally not regulated, but are appearing on the IMO Radio and satellite communications and emergency response,
agenda. including search and rescue, are currently not satisfactory.
Additionally, observational networks and forecasts for weather,
A main concern regarding increased shipping activities icing, waves, and sea ice are presently insufficient. Present
in the Arctic is the accidental spill of oil and chemicals. standards for Escape, Evacuation and Rescue (EER) will need
The level of concern has been elevated as a direct result to be changed in order to be appropriate for the Arctic.
17
18. A short overview of shortcomings of current standards conventions that are legally binding for all Arctic states
is presented by the Barents 2020 Project (2010). They on other areas. Bilateral, regional and sectoral regulations
include evacuation to the ice, safe havens, reduced survival address fishing and offshore hydrocarbon activities, as well
time, limited possibilities for using helicopters and aircraft, as impact assessments (Koivurova and Molenaar, 2010). but
need for icebreaker assistance to reach muster points in there is no competent body that administers such topics
the ice, and search being hampered by darkness during for the Arctic as a whole. The Arctic Council (http://
part of the sailing season. The safety aspects must be solved www.arctic¬council.org), is basically a consensus-based
in cooperation across national borders. and project-driven organization, and does not possess
any legally binding obligations. Participation in the Arctic
An important contribution to risk reduction in the Council is limited to the eight Arctic states5 .
Arctic may be achieved through development and use of
decision support systems. Risk-based onboard guidance Global or regional regulations that apply in the Arctic
to the master (Navigational Decision Assistant) to avoid include the United Nations Convention on the Law of the
excessive hull stress, collision and grounding has recently Sea (UNCLOS, United Nations, 1994), the legally binding
been developed (e.g. Bitner-Gregersen and Skjong, instruments SOLAS and MARPOL73/78 (IMO, 2010a), the
2008; Spanos et al., 2008). These concepts should also London Convention on the Prevention of Marine Pollution
include ice conditions. Utilization of AIS (Automatic by Dumping of Wastes and Other Matter from ships (IMO,
Identification System) for ship traffic monitoring could 2010b), and the OSPAR convention that covers only the
also be considered to be used by Coastal authorities in the Atlantic part of the Arctic (OSPAR Commission, 1998).
Arctic region to reduce risk. To enhance the effects of such
shore-based ship monitoring, systems applying methods Thus, although the legally binding regulations and a
for risk-based ship traffic prioritisation can be used (Eide competent body that administers these for the Arctic are
et al., 2006; Eide et al., 2007). missing, a framework to build on when developing the
instruments already exists. Some coastal Arctic states have
SoCietAl ASpeCtS submitted claims to the Commission on the Limits of the
Increased shipping and hydrocarbon activities in the Continental Shelf (CLCS) for areas beyond the 200-nautical
Arctic may impact on the indigenous peoples in several mile limit (opened for in UNCLOS Article 76) that may, if
ways. There may be some positive economic impacts from all are accepted, leave only a small triangle on the Alaskan
increased shipping, but Arctic residents have expressed side of the North Pole unclaimed (VanderZwaag et al.,
concerns regarding the social, cultural, and environmental 2008). Non-Arctic states have started to show interest in
effects of such expansion (PAME, 2009). The potential the Arctic, in particular China (Jakobson, 2010) and the
impacts should be possible to mitigate through careful European Commission (OF, 2010).
planning and effective regulation in areas with high risk.
5 Eight countries are regarded as Arctic countries: Canada, Denmark
(through Greenland), Finland, Iceland, Norway, Russia, Sweden, and
goVeRnAnCe
the United States of America (USA). Of these, five countries, Canada,
IMO regulations are binding for the Arctic states, Denmark, Norway, Russia, and the USA, are regarded as Arctic coastal
but presently there appears to be no regulations or nations.
18
19. Conclusions
Ice cover in Arctic is expected to continue diminishing The environment and safety particular to Arctic operations
through the 21st century. This trend may lead to a longer have been identified that are associated with the expected
navigation season, improved accessibility by ships, and increase of activity.
increasing pressure to develop oil and gas resources in
the Arctic region. DNVR&I has used a scenario based It is acknowledged that in the 20-50 year perspective
approach to consider the expanded ship traffic, as well addressed in this paper, uncertainty occurs in a number
as hydrocarbon exploration and production in the Arctic of factors (if not all) influencing the estimates derived. It
Ocean, as a result of continued global warming. is therefore suggested that multiple scenarios might be
applied, thereby providing upper and lower bounds for
The results show that in 2030 only part-year (scenario 2) estimates.
traffic from the northern ports in Asia (Tokyo hub) will
be competitive. In 2050, a Tokyo hub will be profitable
for part-year operation (scenario 2) and may become
profitable also with year-round sailing (scenario 1) for
bunker prices above $900/tonne. Trans-polar shipping
from central ports in Asia (Hong Kong hub) is likely to
become marginally profitable only with high bunker prices
and a long summer sailing season in 2050. Traffic across
the Arctic from the southern ports in Asia (Singapore
hub) will not be profitable due to a longer sailing route
than via Suez. Using a trans-polar route may reduce global
CO2 emissions from ships by roughly 0.1 % in 2030 and
0.15 % in 2030 and 2050, respectively.
Based on certain assumptions about hydrocarbon reserves
in the Arctic and their development and an oil price of
$80/boe, CO2 emissions from shipping related to oil and
gas production (tankers and service vessels) in the Arctic
was estimated to be 40 % higher than the CO2 emissions
from Arctic transit traffic in 2030 and about twice that
from transit traffic in 2050.
In addition to transit shipping and shipping related to
oil and gas production, increased tourism, alterations in
fishing patterns, and changes in community re-supply may
further raise activity levels. Certain challenges related to
19
20. Recommendations
Improved model and input data will be needed to provide
a more complete picture of possible scenarios for shipping
and oil and gas activities in the Arctic. Examples are
models that consider the whole logistics chain, including
ice management, as well as weather and ice routing, and
better and more detailed regional data on sea ice and
metocean parameters.
It has been argued that increased activity in the Arctic
will result in challenges related to the environment and
safety that will need to be addressed. These challenges
appear solvable, provided that the regulators take action
and implement the necessary safeguards, making Arctic
shipping not only economically sound, but also socially
and environmentally acceptable, and hence a viable
option for the future.
As part of such action, work on Arctic impact and risk
assessments should be strengthened and intensified. The
assessments should not be limited to shipping and oil and
gas developments, but could also include fisheries, tourism,
and extraction of other natural resources. They must
include design and operational requirements with respect
to safety and environment for all future activities in the
Arctic, ways to reduce impacts from the various activities
and improve their sustainability, as well as infrastructure
aspects like satellite communication, search and rescue,
weather forecasts, and spill prevention and contingency
approaches.
There appears to be a need for more binding regulatory
and governance regimes in the Arctic. Some of the
framework already exits. Making the IMO guidelines for
ships operating in polar waters mandatory could be a good
start.
20
