Over the Circle

by Marc Lanteigne

Although it has long been commonplace to refer to the Arctic as a single region, given similar geography, climate conditions, and oftentimes socio-economic challenges shared by far-northern regions, it is also not unusual to use the terms ‘European Arctic’, ‘North American Arctic’ and ‘Russian Arctic’, particularly in relation to politics and economics. In the past month, the European Arctic has increasingly found itself in the global spotlight, as the region continues to experience various spillover effects from Russia’s February 2022 invasion of Ukraine. 

Finland has now become the thirty-first member of NATO, adding significantly to the alliance’s already growing Arctic interests. Nordic neighbour Sweden also awaits membership, an outcome potentially resting on the results of a runoff election on 25 May in Türkiye (Turkey) between President Recep Tayyip Erdoğan and opposition leader Kemal Kılıçdaroğlu, with the former having blocked Sweden’s membership, and the latter, who has taken on a more pro-Western foreign policy stance, promising to support the bid. 

NATO, and its future in the wake of Russian aggression, was a central talking point at this month’s Lennart Meri conference in Tallinn. The event’s theme, ‘Incipit Vita Nova – So Begins New Life’, was especially timely, as many European governments are now looking to the future of the region, politically, economically, and strategically. While the Arctic was not a main topic at the event, far northern affairs were rarely far from the conversations given ongoing concerns about Moscow’s military posture, as well as how to define a victory for Ukraine and Kyiv’s future relations with both NATO and the European Union. At the same time, the conference highlighted strengthened ties between the Baltic states and their Nordic neighbours, as both subregions were united in addressing threats from Russia. 

At one of the initial panels, the three Baltic leaders discussed [video] the necessity of breaking the Russian government’s cycle of aggression, and how best to hold Russian leaders accountable. Estonian Prime Minister Kaja Kallas called for an international tribunal to address the crime of aggression, while her counterpart in Lithuania, Ingrida Šimonytė, suggested that there remains a tendency to view the invasion as strictly a regional crisis, despite the serious potential for the violence to spread further. 

Related themes at the event included the future of NATO, and of the overall global security architecture, the specific challenges facing Ukraine’s defence today, as well as broader issues of American strategic cooperation with Europe, hybrid threats, and energy security. This last topic was especially appropriate given that Russian oil shipments to Europe, including via the Arctic, have sharply declined since last year, leading to debates over alternative sources, (with Norway’s supplies now being more widely sought). Yet, according to recent figures by the International Energy Agency, Russia’s overall oil exports in April this year rebounded, with China and India, along with other Asian markets, the primary buyers. 

Last week also witnessed the successful, albeit muted, transfer of the chair (or in Norwegian, lederskap), of the Arctic Council from Russia to Norway. Tradition was broken as the handover was accomplished via a virtual meeting, despite invitations by Moscow to conduct the handover in the Siberian city of Salekhard. Ultimately, no foreign ministers from the ‘Arctic 7’ states attended, while the online meeting was the first Council event which has officially included Russia since February of last year, due to the ‘pause’ in the organisation’s activities. The post-meeting document [pdf] was also a conservative affair, merely a short statement stressing the need to ‘safeguard and strengthen’ the Council, and confirming Norway’s chairing status as of this month. 

Norway, which will hold the chair until 2025 until it will be passed to Denmark, now has the Brobdingnagian task of finding (and maintaining) the appropriate level of engagement with the Russian government, including finding ways to invite Moscow’s participation in Council activities, especially around climate change, which require all members to engage. Two months ago, in its capacity as chair, released [pdf] its policy priorities, in which there was a substantial attempt to keep to the original mandate of the Council, namely promoting scientific, environmental and developmental endeavours and cooperation.

The announcement that the handover had been successfully completed, to everyone’s quiet relief, was made during the 2023 Dutch Polar Symposium in Den Haag. During that event there was also a focus on promoting closer scientific cooperation despite the difficult diplomatic circumstances. Discussions during one panel on the role of the Arctic Council quickly shifted to the perceived competition between politics and science in the far north, and various ways in which scientific cooperation was not only vital in combatting the alarming shifts in regional environmental conditions, but also in keeping essential communication lines open. Netherlands has been a longstanding observer in the Arctic Council, and has played many roles in developing polar research, and this meeting also underscored the role of non-Arctic states, including within Europe, in sustaining regional scientific endeavours.

At the same time, the invasion of Ukraine will render ‘business as usual’ an impossibility, as the war will continue to act as Banquo’s ghost throughout future Council deliberations. As a recent report explained, under Norway’s aegis the Council could operate at a near-normal level while constantly having to navigate political obstacles, it could also quietly split as the majority of work is conducted primarily by the A7, or the Council could erode beyond its ability to function, opening the door for new regional organisations to appear, possibly involving expanded participation by non-Arctic states such as China. 

In a foreign policy document [in Russian] published by the Kremlin in March this year, while there was no mention of the Arctic Council, the paper included references to ‘neutralization’ of any actions by states which seek to limit Russian rights in its Arctic waters, and a call for greater cooperation with non-Arctic states, a likely nod to Beijing.

In April of this year, a memorandum of understanding between China and Russia, which carried much symbolic value as well as security implications, was signed in Murmansk. Under the MoU, the China Coast Guard (中国海警局) would accompany Russian security services in joint maritime operations, via the principles of ‘good-neighbourliness and win-win cooperation’ [in Chinese]. It remained unclear, however, what the specific effects of this cooperation would be in the Russian Arctic, given Moscow’s sensitivity regarding any foreign activities in its far northern waters. 

Moreover, while both powers have sought to co-develop a Polar Silk Road in the Russian Arctic since 2017, in the aftermath of the global pandemic and the invasion of Ukraine, bilateral cooperation in the region has been sporadic at best. This may change, however, as Moscow appears to be making quiet plans to move beyond the Council in its Arctic policymaking, with reports that Russia may spearhead a new research station in Svalbard which would be jointly operated with fellow members of the BRICS group (Brazil, China, India and South Africa). The BRICS may be soon experiencing a renaissance of sorts as the upcoming meeting of the group in Cape Town is expected to address the interests of several governments seeking to become members as well. This would include Argentina, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates. Will this potential expansion result in an even more crowded Arctic? 

Not surprisingly, given the current political atmosphere, one order of business which was not addressed at the abbreviated Council meeting was the question of potential new formal observers. This omission marked the second time that Arctic-adjacent state Estonia was left in the waiting room, as the country’s original bid in 2021 was also unsuccessful. Fellow Baltic state Latvia was also seeking to become an observer this year, and Ireland and the Czech Republic had previously expressed interest in joining the list, (the most recent addition to the observer roster was Switzerland in 2017).

As the addition of any new formal observers requires consensus from all eight Council members, another side-effect of the present status of the organisation could be a de facto moratorium on this subject, at least in the short term. The interaction of current observers with the Council under current conditions is also a question.

This outcome notwithstanding, however, it is unlikely that the Baltic region will lose interest in Arctic affairs, given growing ties with the Nordic states which were further strengthened in the wake of Finland’s NATO admission. During the Lennart Meri conference, there were numerous mentions of the Finnish Gulf between Estonia and Finland becoming a ‘NATO lake’, which has significantly changed the security mosaic of the Nordic-Baltic region.  

The Arctic Council was expected to resume formal deliberations next month, with new Senior Arctic Officials Chairperson Morten Høglund stating that political level meetings will not be possible for the near future under current circumstances. Norwegian Foreign Minister Anniken Huitfeldt was also direct in her view that it will be difficult to manoeuvre around politics in reviving the Council, but also noted [in Norwegian] that there were cooperation challenges earlier in the organisation’s history which needed to be overcome. There was also the issue of how the Council’s Working Groups, the mainstays which oversee specific areas of scientific study such as pollution, sustainable development, and local biology, as well as monitoring and emergency preparedness, will operate under the current situation. 

As a result of the war, doors between Russia and the rest of the Arctic remain closed, but more doors between Europe and the Arctic have begun to appear, and swing wide open, with much greater regularity. 

by Marc Lanteigne

In the coming weeks, Norway will be assuming the chair of the Arctic Council after a difficult, and unprecedented, year for the group. Since March 2022, the Council has been bifurcated, with Russia, the current chair, operating alone in the wake of the decision by the other seven members to ‘pause’ participation after Moscow’s illegal invasion of Ukraine. Although some work has been jointly undertaken by the ‘A7’ nations since then, questions have persisted as to how the chair title would be transferred from Russia to Norway this spring. The standard procedure, which would entail holding a Ministerial Meeting in a Russian locale to officially transfer the gavel, was deemed not possible under current geopolitical conditions. Afterwards, how would Norway oversee the Council during its upcoming two-year tenure, and with what level of Russian participation?

Russian Foreign Minister Sergey Lavrov did send invitations to the A7 governments to a Council meeting in Salekhard, a Siberian town in the Yamalo-Nenets Autonomous Okrug, on 11 May, to formally transfer the chair. However, Anniken Huitfeldt, Foreign Minister of Norway, had confirmed at the Arctic Frontiers conference in Tromsø in January that she would not attend any such meeting, nor have any other A7 states agreed to send their representatives to Russia for a handover ceremony.

Thus, a virtual meeting and transfer is currently under negotiation between Norwegian and Russian officials, with the government of Norway confirming that it would assume the role on schedule and as smoothly as possible. Minister Huitfeldt also stressed [in Norwegian] that it was essential for the Arctic Council to maintain operations, given that the alternative was that other organisations would take the lead in regional policymaking should the Council become a cypher. 

Official-level government contacts between Moscow and Oslo remain in abeyance, and Russian President Vladimir Putin recently commented in a policy speech that his country’s relationship with Norway had dropped to ‘a minimum’ [in Russian], which have had negative effects on bilateral cooperation, including in the Arctic, (Norwegian Prime Minister Jonas Gahr Støre responded [in Norwegian] to Putin’s comments by saying that Moscow was to blame for current ‘minimal’ state of Norwegian-Russian relations).

Bilateral links have further eroded over the past year in the wake of spying and drone scandals, the suspension of the 2007 visa agreement which had facilitated travel over the Norway-Russia border, and the reduction of activities within the Norwegian Barents Secretariat, a subregional grouping which had been a major point of contact between northern Norway and neighbouring Russian communities. 

Even after the handover, however, there will still be the conundrum of where Council deliberations will go from there, especially as the Arctic becomes a growing military concern to both Russia and the West. On 4 April, Finland formally joined NATO as the thirty-first member, doubling the alliance’s borders with Russia, (Finland’s own Russian border is about 1340km in length, and it was previously announced that Helsinki would soon be fortifying that frontier). Meanwhile, Sweden’s own NATO application remains active, but it still faces opposition from alliance member governments Hungary and Türkiye (Turkey) over political and human rights policy differences with Stockholm.

Finland’s successful NATO admission prompted vows from the Russian government that ‘countermeasures’ would be taken, and during the past year the Putin regime has continued to augment its own Arctic military presence. In a foreign policy document [in Russian] released by the Kremlin last month, blame was placed on ‘unfriendly states’ seeking to militarise the Arctic, while Moscow promised to work with non-Arctic governments on regional initiatives.

For example, Arctic cooperation was included in the joint statement [in Chinese] between China’s President Xi Jinping and Vladimir Putin when the former visited Moscow last month, with both leaders calling for the Arctic to continue being ‘a place of peace, stability and constructive cooperation’ and promising further cooperation on economic endeavours including the Northern Sea Route. As well, a February 2023 policy document [in Russian] on the Arctic notably omitted any mention of Russia’s cooperation with the Arctic Council, instead calling for regional cooperation on a state-to-state basis. 

The deteriorated diplomatic situation between Russia and the A7 governments was only further underscored by the detainment last month in Yekaterinburg of Evan Gershkovich, an American reporter for the Wall Street Journal. 

The degree to which Russian engagement in the Council will take place during Norway’s chair will affect many issues within the far north and likely well outside of it. Climate change and environmental affairs will remain high [in Norwegian] on the organisation’s agenda, as alarms [pdf] continue to sound about tipping points being reached or surpassed in the Polar Regions along with other parts of the world. As the largest Arctic state, as well as a major concern in regards to local pollution, omitting Moscow from Arctic environmental policymaking may serve to slow down joint actions in combatting climate change threats in the far north. 

There are also the questions of how Indigenous groups, representing the Permanent Participants in the Council, will be affected by the situation, as well as how the observer organisations and governments will operate. At the Arctic Circle Assembly in Reykjavík last October, China’s senior Arctic official, Gao Feng, stated [video] that it would be difficult for his country (which has been a formal observer in the Council since 2013), to participate in the Council should Russia continue to be excluded, a point which he reiterated at the Tokyo Arctic Circle Japan Forum in March this year. The situation also remains hazy for potential new formal observers, including Estonia and Latvia, as these positions are normally designated via unanimous support of the Council’s eight members. 

On 23 March, Oslo published its policy document [pdf] detailing its priorities during its 2023-5 Council chairing period. The paper, in keeping with Arctic Council traditions of keeping hard security matters as abbreviated as possible, made only oblique references to the geopolitical situation in the region, citing the ‘difficult and challenging time for international cooperation’ in which the Council is currently operating. Acknowledging the Council’s 2021-2030 Strategic Plan [pdf], originally adopted in Reykjavík two years ago, the Norwegian government outlined four priorities for its chair position over the next two years: climate and the environment, the oceans, the peoples of the north, and sustainable economic development. 

These priorities reflect the diverse nature of both environmental and socio-economic challenges the Arctic is now facing. As responses, Oslo has promised initiatives including protecting regional biodiversity, reducing black carbon and methane emissions, promoting improved data sharing, preparing for the green transition in the Arctic, combatting marine pollution, support stronger economic, health and cultural cooperation, advocate gender equality and diversity policies, and organise an Arctic Youth Conference.

Norway’s Council policy paper has illustrated its government’s ‘the show must go on’ approach to its upcoming chairing duties, expressing a determination to make sure that the group does not deviate from its core interests in addressing the considerable environmental and human security travails which, as many policymakers have pressed, cannot be placed on hold until the Arctic’s strategic situation improves. 

Oslo has given itself an ambitious, and lengthy, to-do list for its two years as Council chair, and in addition to the logistics of completing these tasks, the Norwegian government will constantly need to observe how and where the changed security situation in the Arctic is spilling over into ongoing efforts to improve livelihoods in the far north.

by Marc Lanteigne

Less than two years ago, speculation was swirling around the possibility of a dramatic shift in Norwegian energy policy, as the fossil fuel-rich nation appeared poised to downgrade its oil and gas development projects in favour of concentrating on renewable energy alternatives. The runup to the country’s parliamentary elections in September 2021 was dominated by questions about what would happen should the then-opposition Labour Party (Arbeiderpartiet) be required to share power with the Norwegian Green Party (Miljøpartiet De Grønne) and the Socialist Left (Sosialistisk Venstreparti). Such a coalition would likely have resulted in an attempt to reconfigure the Norwegian economy more definitively away from fossil fuels, especially since the Greens had called for an immediate halt to further oil exploration, and the termination of petroleum development in the country by 2035. 

The 2021 election was held during a period of growing evidence of climate change in the Arctic as well as a report [pdf] published earlier that year by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) which included warnings about the precarious state of Arctic sea ice and warming temperatures in the far north. Over the past few years, Oslo had been chided by both domestic and international actors for not doing enough to address climate change pressures, including in the Arctic, and for advocating green policies while maintaining a robust oil and gas industry. 

However, after the parliamentary vote, neither the Greens, which fell short of the expected number of seats, nor the Socialist Left were invited into the new Labour-led coalition. Instead, the Labour government of Prime Minister Jonas Gahr Støre joined with the moderate Centre Party (Senterpartiet) to form a minority government in parliament, (unlike in other parliamentary systems, minority governments in Norway are commonplace, as well as traditionally stable). 

Discussion of a short-term move away from oil and gas in Norway initially became more muted after the new government took office, and the spike in post-pandemic oil prices further quieted any discussion of  a ‘green wave’ in Norwegian energy policy. Despite ongoing unease in some parts of the country over the incompatibility of Norwegian energy policies with global climate change commitments, the Støre government announced plans in March of last year to release new drilling licenses in Arctic waters, and Oslo declined to support a call by the European Union in late 2021 to implement a moratorium on Arctic fossil fuel extraction. 

The February 2022 Russian invasion of Ukraine, and the scramble by many European economies to implement trade sanctions and to sever fossil fuel trade with the Vladimir Putin regime, changed the game again. As a result, Russia has been diverting much of its Arctic oil trade since last year to both China and India, at reduced prices. (China has also been a major buyer of Russian liquified natural gas, or LNG, as European markets were cut off). In September 2022, the abrupt shutdown, widely blamed on sabotage, of the Nord Stream natural gas pipelines connecting Germany and Russia in the Baltic Sea further raised the alarm about the dangers of European dependence upon Russian supplies.

 

Europe’s search for alternative energy suppliers served to push Norway further into the region’s energy spotlight. Oslo has been called upon to expand both its oil and gas production for sale to European markets, which has not only raised new questions about environmental impacts but has also at times complicated relations between Norway and European energy purchasers. 

It was announced this month that Norway’s oil and gas profits reached record levels during 2022, with a recent report noting the country’s state energy concern, Equinor, made US$24.3 billion just in the period between July and September last year. Norway’s Government Pension Fund- Global (Statens pensjonsfond Utland), based on the country’s fossil fuel trade, now stands at about 12.88 trillion NoK (US$1.28 trillion). 

Since last year, the Støre government has been attempting to deflect criticisms that Norway has been profiting unfairly from the energy crunch elsewhere in Europe. Debates about how to use these additional funds for the benefit of Ukraine, and Europe as a whole, have persisted, and the announcement last October by the Støre administration that Norway would be cutting its aid budget in 2023 from one percent of annual national income to 0.75% did little to silence criticism. Polish Prime Minister Mateusz Morawiecki was especially direct on the subject in May last year, when he called upon the Norwegian government to ‘share excess profits’ made through its fossil fuel sales. Oslo has also declined to implement a pricing cap on exported Norwegian natural gas, but did agree to levying a windfall tax on its oil and gas firms.

However, pressures on natural gas prices eased somewhat at the beginning of 2023 in both North America and Europe, due to conservation efforts, a collective desire to prevent Russia from weaponising fossil fuel prices against the West, and a so-far warmer than expected winter in many parts of the northern hemisphere.

The potential contradictions between demands for Norwegian oil and gas and the country’s commitment to protect the Arctic environment have also been illuminated via an announcement last month that Equinor would invest NoK 13.2 billion (US$1.3 billion) in upgrading LNG facilities in the far northern town of Hammerfest to not only boost production but also to reduce greenhouse gas emissions via upgrades to the facilities’ electrical systems. 

As well, despite ongoing differences over Norwegian fossil fuel policies, the Støre government has nonetheless sought to burnish its environmental credentials in other ways, especially as Oslo has pledged ‘net zero’ carbon emissions policies by 2050. Wind power has become a subject of greater interest, and Norway continues to situate itself as a leader in the sale of electric vehicles (EVs). 

This month, it was announced via a joint statement that Norway would be cooperating with Germany to develop hydrogen gas power infrastructure by 2030. This construction would facilitate the transfer of ‘blue hydrogen’, with an eye to eventually shifting to ‘green hydrogen’ capabilities between the two states. Blue hydrogen refers to hydrogen created by the burning of natural gas and using carbon capture and storage. Green hydrogen, which at present is considered too costly to develop on a grand scale, is created via consumption of renewable energy. Hydrogen (H₂) has long been considered a promising, and more environmentally friendly, (as its waste product is water vapour), potential successor to fossil fuels. 

Under the agreement, Equinor and German energy firm RWE would build hydrogen-ready power plants as well as a pipeline connecting the two countries. If successful, the enterprise would serve to further diversify European energy supplies while further shielding the region from Russian energy pressures. However, there were initial concerns about cost, as the pipeline alone was reported as having a provisional price tag of NoK 32 billion (US$3.2 billion), as well as over the timetable as to when the project could successfully shift from blue to green hydrogen development, as Germany is especially interested in making that transition as soon as possible. 

In many ways, Norway is still facing the same energy dilemma it had before the start of the pandemic and the invasion of Ukraine, namely how best to address geopolitical and economic needs on one hand while honouring its environmental commitments on the other. Climate change pressures continue to be observed in the Arctic this winter, but these concerns are now more commonly overshadowed by European insecurities, including access to energy, fostered by Moscow’s belligerence. 

by the OtC Staff

On behalf of the editors, writers and contributors to Over the Circle, (and also Móri!), we wish everyone a very Happy Holidays, and a peaceful, safe and prosperous 2023!

As the far north continues to grow in local and global importance, OtC looks forward to continuing our reporting on the Arctic in all of its different dimensions.