By Dr. Richard Weitz

11/27/2011 – Given the importance that Putin assigns to maintaining control of Russia’s energy resources, it is unsurprising that he has already outlined have ambitious goals to develop Arctic hydrocarbon resources in coming years. Geological experts believe that the Arctic holds more than 22% of the world’s undiscovered natural gas and oil resources, making it the next frontier in the global search for energy.  In addition, if Arctic ice continues to melt and shrink, resources will become more readily accessible, and new transit routes will become navigable that provide cheaper transportation for resources.

However, the path to the development of the Arctic region is fraught with difficulty and conflict. The primary impediment to the peaceful development of Arctic energy resources are the competing sovereignty claims to the Arctic among bordering states.

While under current international law, the claims of states bordering the Arctic are limited to the exclusive economic zones (EEZ) comprising the territory 200 nautical miles outward from their respective borders, Russia, the United States, Canada, Norway, and Denmark have all made territorial claims to portions of the Arctic outside of these zones. Each has done so through a mechanism introduced in the United Nations Convention on the Laws of the Sea, which allows states to claim portions of the continental shelf outside their exclusive economic zones in the first ten years after ratification.

Moscow has claimed both the Mendeleev Ridge and the Lomonosov Ridge, stating they constitute extensions of Russia’s continental shelf.  Other experts contend that the ridges do not extend far enough to justify the Russian claim in international law.

Nonetheless, the 5 states making up the Arctic Council have clear claims in their EEZs.  But the speed with which these claims are realized in production capacity and the commitment of resources to the region are important factors in exercising sovereignty and realizing wealth. In the current situation, the Russians and Canadians are committing resources ahead of the other three.  Denmark and Norway are next and the US is dead last in committing resources to the Arctic mission.

Not only are there political challenges to gaining access to Arctic fuel reserves, but the geography of the region must also be taken into account. These reserves lack functioning gas fields and pipelines, and require hundreds of billions of dollars in investments. Even then, many of these areas may not be accessible until the ice cap shrinks further. Russia has responded to these challenges by announcing a number of costly programs to explore and develop East Siberian oil and gas fields and to build a network of oil and gas pipelines towards the 2020-2030 timeframe, despite their costing many tens of billions of dollars.

The Kremlin appears to see the Arctic as a necessary part of Russia’s future security in the realms of energy and geopolitics. Putin has advocated the aggressive expansion of the Arctic, citing the “urgent” need to secure Russian “strategic, economic, scientific and defense interests” there.”  To discourage other Russian as well as foreign companies from operating there, the Russian government has granted Gazprom and Rosneft a duopoly in the Arctic region. In a 2007 statement, the Director of Gazprom’s export business, Alexander Medvedev, dismissed proposals by both British Petroleum (BP) and Royal Dutch Shell for joint ventures there, saying that “development in the extreme conditions of the Arctic was within Gazprom’s capabilities.” On August 19, 2011, Gazprom launched its first Arctic oil platform, with plans to being production in early 2012.

The development of the Arctic is fraught with a number of large obstacles, not the least of which are the severe conditions in the region and the difficulties they pose to the extraction of oil and gas reserves. The environment necessitates the construction of expensive custom equipment capable of withstanding the frigid temperatures and the constant supervision of soil conditions and the icepack for fear of damage to the facilities.

Furthermore, the energy infrastructure in the Russian Arctic remains largely undeveloped. Pipelines have yet to be constructed to connect the Arctic’s oil and gas fields to international energy markets, necessitating expensive overland or oversea transportation on top of enormous initial development costs and the high cost of labor.  As such, the development of the Russian Arctic will likely cost tens, if not hundreds, of billions of dollars over the course of the next decade, costs that may prove to be prohibitive to Moscow’s solo development of the Arctic.

Although Russia has sought to avoid triggering a strategic race for Arctic riches, Moscow’s ambitions to develop the Arctic have worried the United States, Canada, Norway, and Denmark, the other states that have claims to Arctic territory. In 2009, Denmark began the process of setting up an Arctic Command within its armed forces, citing the region’s heightened “geostrategic significance” in light of the contention over it. This force will include an Arctic Response Force, a specialized military unit adapted to Arctic conditions capable of quick response throughout the region.

Canada has begun to flex its military muscle in the Arctic, recently conducting the country’s largest Arctic military exercise ever in the Canadian High North. The exercise involved over one thousand troops, military aircraft, naval vessels, and unmanned drones.  The display of force appears to have been at least in part a response to a March 2009 announcement by the Russian government, which stated that Moscow “expects the Arctic to become its main resource base by 2020.”  In an effort to further that goal, that it will deploy military forces “capable of ensuring military security” to the region.  In July 2011, Moscow began planning for the deployment of two military brigades, consisting of roughly four to six thousand soldiers, to a permanent position in the Arctic.

Yet, the Arctic is not fated to become an arena of international conflict. Cooperation and joint development of the region could develop that would satisfy all parties. The forum for such an agreement would likely be the Arctic Council, an intergovernmental forum made up of the eight Arctic states (Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States) that seeks to cooperatively address the issues facing the Arctic region. The status of the Arctic Council has expanded in recent years as climate change and strategic concerns in the Arctic have heightened its geopolitical significance.  While the Arctic council did not address the issue of a strategic race for the resources of the Arctic in its most recent declaration,  the common objectives of the Norwegian, Danish, and Swedish chairmanships, which have lasted from 2006 through 2012, call for “international cooperation” as “a prerequisite to sustainable development” in the region.

A helicopter is seen operating in the Arctic.  Providing for maritime safety and security will be a core mission facing the 5 Arctic Council states.  Acquiring assets to operate in the Arctic will be crucial, and here Russia and Canada are clearly committed. The United States is not.

One reason why Russian policy makers currently proclaim a cooperative approach toward the Arctic is their desire to limit NATO’s role in the Arctic. Another more positive dimension is Russia’s need for foreign technologies and other resources to access their Arctic riches.

Putin said that the Russian oil industry would need more than 8.6 trillion rubles ($280bn) of additional capital during the next decade to sustain current production levels. The International Energy Agency estimates that by 2035, Russia’s maturing Siberian oil fields could produce almost one million fewer barrels of oil each year.  Attracting almost $300 billion would probably require at least some foreign capital as well as foreign technology to exploit Russia’s offshore energy resources.

Although Gazprom and Rosneft are the only Russian companies legally permitted to undertake energy production activities on the Arctic continental shelf, they have yet to take full advantage of this privilege due to inadequate money and technology. Exploiting Russia’s offshore oil and gas deposits in the Arctic waters present major geophysical challenges from the polar ice, cold temperatures, and severe storms. Through joint ventures and other arrangements, Russian energy firms are seeking foreign partners who can bring their experience, technology, managerial skills, and other assets to the challenging task of exploiting the Arctic.

The immense costs, risks, and difficulty associated with the extraction of Arctic hydrocarbon resources provide a strong incentive for the Russian government to cooperate with Western governments and companies. The recent moves by both Gazprom and Rosneft to invite cooperative development with a host of Western oil majors may prove to be the first step in a process whereby setbacks and roadblocks, financial or otherwise, will induce Moscow to support a much larger influx of Western capital and expertise through agreements with Western oil and gas companies.

However, even in light of the Exxon Mobil-Rosneft strategic cooperation agreement, numerous impediments still exist to such cooperation, not the least of which is the assertion by Putin that while Russia remains open to dialogue on cooperation in the Arctic, it will defend its interests in the region, likely by force if necessary, regardless of any prevailing cooperation.  Thus, it appears as if any cooperative agreement between the Arctic states would need to respect Russian interests for it to have any chance of creating sustainable and peaceful collaboration. Furthermore, numerous legal impediments to Western investment may ultimately deter many Western firms from entering the Russian energy market altogether for fear of reprisal from Moscow.

The international community should take advantage of Russia’s currently cooperative stance and work to address some important issues that could impede the safe and secure development of the Arctic’s resources. These include establishing a mechanism to monitor and respond to environmental problems, promote peaceful scientific research and related activities, resolve conflicting claims and ideally promote collaborative projects to exploit the region’s natural resources, prevent the depletion of rich fish stocks and protect fisheries from the adverse impact of climate change, reinforce confidence-building measures among the parties, construct the capacity to manage the growing human activity in the Arctic, and ensure representation of all interested stakeholders (including extra-regional states with a major presence in the region and non-state actors) in Arctic-related decisions.

Some of these issues can be addressed through multilateral institutions, but there is also room for unilateral restraint as well as bilateral arrangements. For example, U.S. Northern Command, which has recently assumed responsibility for the Arctic under the new Unified Command Plan, should make it a priority to engage with their counterpart military commands in Russia and China as well as the other NATO states. The militaries can profitably follow the path already pursued by the countries’ scientific establishments, which have long collaborated on multilateral research projects in the Arctic.

11/16/2011 – by Dr. Richard Weitz

Despite the inevitable charges of electoral fraud, Kyrgyzstan’s presidential election seems to have gone reasonably well. An end to Kyrgyzstan’s political instability would be good for the entire region. The earlier political violence in that country threatened U.S. and Russian military installations as well as the main conduit by which American troops enter and leave Afghanistan.

Although impoverished and isolated Kyrgyzstan is not sufficiently important to Russia, China, the United States or other great powers as to lead to a major clash among them, they each have important interests at stake in seeing a stable Kyrgyzstan.

Chinese officials fear that continued instability in their western neighbor will spill over into China or other Central Asian states, complicating Beijing’s efforts to exploit the region’s natural resources.

The logistical neighborhood to support Afghan operations. (Credit Image: Bigstock)

Russian policy makers seem most concerned about how instability in Kyrgyzstan makes Moscow and its regional security institutions look impotent. The surprising failure of either the Shanghai Security Organization (SCO) of the Collective Security Treaty Organization (CSTO) to assist the Kyrgyz government to suppress the June 2010 riots sparked concerns by many Central Asians over whether they can rely on the these institutions to defend them against domestic security threats. Another Russian concern is how the collapse of Kyrgyz border controls are facilitating drug trafficking and other transnational crimes in Central Asia, which can easily spill over into the Russian Federation due to the weak border controls separating these former Soviet republics.

U.S. officials have long been concerned about Kyrgyzstan given the vulnerability of the international coalition’s supply lines into Afghanistan.

Allied military planners have always had to worry about their ability to support their very sophisticated and very high-maintenance force in such a distant, land-locked and logistically challenging theater of operations as Afghanistan. The recent surge in the number of U.S. combat troops has only aggravated that problem by requiring the United States to increase considerably its deliveries of food, fuel, munitions, and construction materials to this remote, mountainous, and landlocked country.

The United States and NATO opened the so-called Northern Distribution Network (NDN) in 2008 to provide another supply route to Afghanistan. The NDN, which is also used for non-lethal supplies and equipment, connects Baltic and Caspian ports with Afghanistan via Russia, Central Asia, and the Caucasus. NATO transit to Afghanistan goes through the NDN, either through Russia, Kazakhstan, Tajikistan, and Uzbekistan, or alternately through the South Caucasus and the Caspian Sea.

This 5,000 kilometer transportation network (a distance five times longer than the 1,000-kilometer journey from Karachi to Kabul) involves the delivery of supplies to European ports, where they are loaded onto railway carriages or airplanes and sent through Russia to Kazakhstan or Uzbekistan. From there, the cargo is placed on trucks or trains for shipment into Afghanistan.

Although critics might argue that all the West has done was increase its reliance on vulnerable supply routes, the net effect has been to reduce NATO’s overall vulnerability to supply cutoffs.

Having a portfolio of roots means that, if one communications line is interrupted, the allies still have others to count on. Perhaps the one drawback of the NDN is that, although it has both reflected and contributed to improved relations between the United States and some of the former Soviet republics such as Russia and Uzbekistan, U.S. officials have had to reduce its pressure on these typically authoritarian regimes to liberalize their political systems or respect their citizens’ human rights.

This development does leave the United States vulnerable to further regime changes in the region, such as the one that occurred in Kyrgyzstan in 2010,which partly resulted from U.S. diplomats overlooking corruption and other criminal government behavior in order to not jeopardize U.S. access to the Manas air base there.

Kyrgyzstan is not a major player in the NDN, but its Manas international airport has played an important role in providing a means by which NATO soldiers can enter and leave Afghanistan. Since Uzbekistan evicted American military personnel from its territory in 2005, Manas has been the main U.S. military transit facility in the region.

The Pentagon has used the base to support U.S. military operations in Afghanistan since late 2001.Almost all American soldiers who deploy on the ground in Afghanistan enter and leave through Manas. The international airport’s two main assets are its relatively advanced facilities and its pivotal location. Its 4,200-meter runway, shared between the military and civilian airports, was originally constructed for Soviet bombers and has proved uniquely capable among Kyrgyzstan’s airports of sustaining round-the-clock support for large military aircraft such as cargo and tanker planes. Their crews can make the 1,000-mile flight to Afghanistan in 90 minutes, many hours less than any other major airport.

Nonetheless, the United States and other NATO countries lack sufficient strategic airlift or funding to supply their forces in Afghanistan by air. Although globally only some 10 percent of all U.S. military supplies are moved by air, the shipment of goods to Afghanistan by military or civilian cargo planes is already approximately 30 percent. It also costs about $3 per pound to ship goods by air to Afghanistan, compared with 30 cents for surface delivery.

For this reason, only the most important items are sent by air to Afghanistan, such as weapons, ammunition, critical equipment, and U.S. soldiers, who enter and leave Afghanistan via Manas airbase in Kyrgyzstan. The rest of NATO’s cargo reaches Afghanistan through Pakistan and, increasingly through the NDN. (See further: https://www.sldinfo.com/general-mcnabb-on-meeting-the-challenge-in-afghanistan/)

The Central Asian countries have been logical partners to support a U.S.-led NATO surge in Afghanistan. Tajikistan, Turkmenistan, and Uzbekistan border Afghanistan, while Kyrgyzstan and Kazakhstan are located nearby. Their governments share Western concerns that renewed Taliban control over parts of Afghanistan would give an impetus to Islamist militancy in the region. All Central Asian regimes have been targeted to various degrees by Muslim extremist organizations linked to the Taliban and al-Qaeda. Most recently, Tajikistan has seen a revival of the Islamic Movement of Uzbekistan, the region’s main Islamist terrorist network before U.S. forces destroyed the Movement’s bases in Afghanistan in late 2001.

Central Asian governments would generally like to curb the flow of narcotics from Afghanistan to and through their countries. Although some Central Asian groups profit from the regional drug trade, many societies suffer from the associated increase in crime, corruption, and local narcotics use. Narcotics traffickers are rumored to have helped finance some of the mass violence that plagued Kyrgyzstan last year as a means of disrupting national law enforcement operations.

Central Asian leaders are also eager to maintain NATO’s presence in Eurasia to help balance Russia and China, whose military and economic predominance raises the risk of a Sino-Russian condominium at their expense. Although regional leaders generally enjoy good ties with Moscow and Beijing, they fear that Russian military and Chinese economic dominance raises the risk of a Sino-Russian condominium at their expense.

Commercial considerations also drive their interest in supporting the operation: the recent economic crisis in the region, worsened by the collapse in world oil prices, makes their governments interested in the jobs, service payments, infrastructure improvements, and other economic contributions the transshipments could provide. Central Asian leaders can also solicit bribes to enrich themselves are well as pay off political supporters.

Yet, one must not exaggerate the probable impact of the NDN on relations with Russia or the Central Asian states. These authoritarian regimes will inevitably channel foreign economic and military activities so that they strengthen their regimes. The Western companies and other foreign contractors have not helped strengthen the rule of law in commerce or promoted liberalization of their economies. Rather, those foreign contractors the Pentagon and other NATO militaries use to convey their goods to Afghanistan through Eurasia accept they sometimes must pay bribes and undertake other dishonest behavior to keep their business.

When foreign activities threaten to undermine these regimes and networks, they are resisted. The most notable case occurred in July 2005, when Uzbek President Islam Karimov concluded that U.S. promotion of democratic revolutions and human rights in his region threatened his authority. He therefore expelled the U.S. military from what had been its most important base at the time at Karshi-Khanabad. The Pentagon almost lost access to Manas Air Force Base in 2009 when it looked as if Washington would not match the bids Moscow and Beijing were reportedly offering for an end to the U.S. lease there. Fortunately the Kyrgyz President, since deposed, was open to soliciting multiple payments from multiple parties in the gamble that none of the parties would become so irritated as to break relations with him entirely.

Currently the main worries again center on Uzbekistan, which has emerged as the most important transshipment country along the NDN, since its good railway lines traverse the country’s territory and also bridge the Amu Darya River to reach the Afghan village of Hairaton From there, goods are conveyed by truck to the rest of Afghanistan. In a congressional hearing last November, David Sedney, deputy assistant secretary of defense for Afghanistan, Pakistan and Central Asia, said that about 98 percent of all NDN shipments pass through Uzbekistan. It is no accident that Secretary of State Hillary Clinton visited Uzbekistan again during her trip last week to the region.

Although the Uzbek government has managed to suppress local terrorism, the regime will be extremely vulnerable when Karimov dies or otherwise leaves office, since the political succession process will lack preparation and probably legitimacy. Meanwhile, Karimov will prove a difficult international partner. He seeks to balance between Russia and the West while remaining strongly independent of both.

Uzbekistan may also prove less interested than other NDN states in the economic benefits from servicing the northern supply route to Afghanistan.

The country has a strong overall growth rates and double-digit growth in its industrial sector. Uzbek officials have kept their annual budget deficits and overall public debt relatively small. Uzbeks have been able to leverage their natural endowments with late-comer advantages. Another reason for Uzbekistan’s strong performance has been its growing economic ties with China, which is paying top dollar for Central Asian oil and gas. PRC investors are financing region-wide infrastructure improvements in energy production and transportation.  For Uzbekistan to graduate from lower-middle income status to become a high-end middle income economy, they need to improve its infrastructure, education, and macroeconomic environments as well as expand business transparency. Participating in the NDN can contribute marginally if at all to realizing these goals.

Fortunately, Karimov is eager to restore relations with the West at the moment, and is one of the few Central Asian leaders sufficiently concerned about Afghanistan to offer his own peace plan. Washington and the other NATO governments might as well take advantage of the current mood in Tashkent to try to shore up the region’s defenses before U.S. leverage declines along with the withdrawal of U.S. military forces in coming years.