Significant financial and political interests surround the issue of exploiting Arctic areas. For the environment, the risks are monumental.

Finland will be the chair of the Arctic Council for the 2017-19 term. The Council is an international political forum for the Arctic areas.

Aleksanteri Institute’s Professor Veli Pekka Tynkkynen believes that it is in Finland's interests to ensure continuous cooperation among the parties operating in the Arctic.

 “Through the EU, Finland can receive further leverage to meet its goals for the Arctic areas. It’ll be interesting to see which themes will be highlighted besides the basic questions during our term as the chair," muses Tynkkynen.

Based on reports drafted for the Arctic areas, it seems that policy will focus on a sustainable economy. The goal of Finland’s long-term energy and environment policies is to renounce fossil fuels, particularly coal and oil.

The situation is not without its conflicts.

 “Finland will point out that the Arctic area has a great deal of economic potential and that all operations must emphasise responsibility and environmental factors. But even though this is not always stated directly, economic cooperation in the region has primarily been synonymous with the exploitation of the hydrocarbon deposits on the northern coasts of Alaska and Russia," Tynkkynen states.

 “Morally speaking it is problematic that, while we strive to renounce hydrocarbons in our energy policy, the most important force in Arctic cooperation is about gaining benefits from the increasing economic activities and energy projects in the area."

Accursed energy dependency

In terms of the superpowers in the Arctic region, the activities of the US have so far been held back by the low price of oil on the global markets. There have been no economic incentives for launching intense Arctic projects in Alaska for example, as energy production in the area is very expensive.

 “It’s hard to say anything about the political direction of Trump's government yet but, on the other hand, American energy policy reflects a desire to take maximum advantage of all resources on domestic soil. This means that Arctic projects may also move forward,” Tynkkynen says.

The situation is different for Russia. Powerful economic interests relating to the country's future energy situation and transportation in the Northeast Passage go hand in hand. In addition, Russia has major ambitions for its Arctic areas in terms of domestic policy.

 “The Arctic dimension symbolises the future of Russia, and exploitation of the area is currently a core discourse for its nation building. Putin’s Russia will do everything to see that the energy projects in the area come to completion."

In foreign policy, the Arctic area symbolises a boost to Russian sovereignty and the country’s position as a superpower. The UN is currently processing Russia’s submission to expand its economic zone to the northern Arctic shelf. This would be a powerful symbol since, if the submission were to be accepted, Russia would control the North Pole.

The most important question is the livelihood of Putin’s government: trade in liquid carbon deposits and the resulting wealth.

 “Russia’s financial policy does not see many options. Russia has not been able to reduce its dependency on energy or to diversify its economy. From the perspective of its current energy policy, Russia will have to enter the Arctic region, into increasingly difficult conditions and into areas with even more major environmental risks to produce oil and gas," Tynkkynen says.

The Arctic playing field

Of the other Arctic superpowers, Canada's interests lie on the northern Arctic shelf, much like Russia. China, meanwhile, is interested in infrastructure projects for the energy industry, and the opening of the Northeast Passage for cargo ship traffic.

Northern countries, such as Finland and Sweden, have a major role to play in setting the EU’s shared political agendas – and there are many challenges.

 “Russia has succeeded in dividing the EU into sections in energy policy. It does not negotiate with the EU, but instead conducts bilateral negotiations with individual member states or energy companies. This is even more apparent in the Arctic projects," Tynkkynen explains.

 “Arctic cooperation is burdened by memories of the Cold War, of military opposition and displays of power."

According to Tynkkynen, it is particularly problematic that economic and security aspects have not been put on the agenda for Arctic cooperation. After the Cold War it was natural for security questions in particular to be overlooked.

 “Lately there has been a drive to define the Arctic through softer factors, and on the institutional level, the focus has been on social and environmental issues as well as the rights of native peoples. If certain themes are considered taboo, it means problems for the future. For example, decisions on economic activities will be severed from the related environmental and social issues.”   

One big question is whether the intention is to keep Arctic policy separate from other global conflicts, and what kind of Russia the international community is supporting through economic cooperation.

Fragile environment

The biggest challenge for the future of the Arctic has to do with global warming.

The Arctic paradox of climate change is that, as the Arctic melts, oil and gas deposits are released for intensive exploitation, which in turn accelerates climate change. In addition, the increasing motor traffic in the arctic region causes dangerous black carbon emissions and increased temperatures.

According to Tynkkynen, the difficult conditions protect the Arctic environment, but at the same time, the risks associated with energy production are great.

 “In the case of an oil spill, the oil will remain in the cold Arctic environment for years, as the biological processes in the area are slow.”