ARCTIC SHIPPING SPECIAL REPORT
By JULIE GEDEON
March 2, 2009
While it’s technically possible to navigate Arctic waters year-round, maritime experts doubt it’ll happen on a regular commercial basis any time soon.
“If the gas fields open, the shipping companies will be in the Northwest Passage region,” Thomas Paterson, Fednav’s vice-president of owned fleet and business development, told participants at the Arctic Shipping North America conference held by Lloyd’s List in Montreal last October. “But to think of a 6,000-TEU (20-foot-equivalent unit) container ship going through the Northwest Passage instead of the Panama Canal, I don’t buy it for one bit.”
Arctic distances may be shorter, but it can take longer to navigate icebergs, floes, growlers, as well as dense fog, he said. Add to that the risks of getting caught in ice and it’s easy to see why shipping companies will think twice.
Such risks might have been worth it last spring when the going rate for a Panamax was about $80,000 daily, but not with those rates plummeting to about $8,000 last autumn.
“You might save five to 10 days, but a mining company isn’t going to thank you if you have 60,000 tonnes of zinc concentrate stuck up there for the winter,” Mr. Paterson said.
Two years ago, Mariport Group investigated the costs of taking a fully loaded Panamax vessel through the Northwest Passage with the cargo initially transported as far as possible over land.
“After two weeks of non-communication with our friends in Russia, we finally got a price (to escort the vessel) of about $1.6 million and said thank you very much but we’ll go through the Panama Canal,” related Christopher Wright, Mariport’s president. “Unless we’re absolutely sure an icebreaker will be there when we arrive at either the east or the west of the Northern Sea Route, we’re not going to take that chance.”
Shorter Arctic distances might occasionally be attractive when it comes to transporting heavy project cargo, but only if the insurance underwriters can be persuaded to set a reasonable premium, he added.
He said the fate of the Finn Polaris in 1990 served as a caution about the costly results of ignoring safe navigational practices in Arctic waters. The Finn Polaris hired an ice navigator inbound to Nanisivik, Nunavut, but refused those services on the way out. The ship ran into an ice edge, was holed and sank along with its valuable mining concentrates.
“The shortest distance between New York and Shanghai is by train up to Prince Rupert and then a container ship – not through the Northwest Passage,” Mr. Wright emphasized.
Nevertheless, the Arctic will get busier. “The population by 2020 is expected to be double, so the volumetric measure of cargo needed to support those communities through the sealift will be at least twice as much,” Mr. Wright said. “Given the stress that the sealift vessels were under (in 2008), we’re going to need a lot more ships.”
David Foster, president of NTCL (Northern Transportation Company Ltd.), said captains are reporting easier transiting and longer periods of open water into late October, but there’s always the risk of getting stuck within the Northwest Passage or Barrow Straight later in the season. “With a still very tight window, you have to make sure that your plans will fit into the ice regime of that particular year,” he said.
“The Arctic is trending towards more traffic for mining, oil, gas and a potential shortcut to and from Asia. We’re looking at a joint venture to use the Western Arctic as a pathway to the Fort McMurray oilsands development.”
NTCL already moves about 150 million litres of fuel and 50,000 to 60,000 tonnes of deck or dry cargo across three Arctic regions annually. Mr. Foster said higher volumes would mean lower shipping costs for the company’s Inuvialuit and Inuit owners, but that has to be weighed against the impact on the environment and the animals that remain the primary sources of local food.
“The Arctic is very shallow relative to global waterways,” Mr. Foster said, which limits the kind of vessels that can navigate the North. In the Mackenzie River, for example, the draught is typically 1.3 metres (4.5 feet).
Along with this shallowness, the Arctic remains largely uncharted. “We rely heavily on our captains who have anywhere from 25 to 40 years of experience and can see what’s happening,” Mr. Foster said. “Aboriginal people also advise us.”
The challenge is to convey this knowledge and experience to newcomers. “You generally have to bring support with you,” Mr. Foster added, “because Bob’s Boat Repair is not there.”
Petro-Nav avoids ice as much as possible during its 200 ship days in the Arctic every year. “We transit ice when we have to, but we operate bulk fuel vessels and ice isn’t good for them,” said Christopher King, director of operations.
Experienced captains get Petro-Nav’s fuel vessels quite close to a beach in order to run about 1,600 metres (roughly a mile) of floating hose, something they won’t do in ice. “We might have an ice-strengthened ship, but we don’t have ice-strengthened hose,” Mr. King said.
Mr. King would like to see an increase in icebreaking capacity. “Right now some of the commercial ships are up there before the icebreakers are,” he said. “There’s something wrong with this.”
He also called for more navigational aids, particularly for port approach areas in most of the northern communities. “A lot of the charts and navigational aids that the ships are operating with were probably produced in the 1960s and ’70s when there were probably half as many ships and they were probably half to a third of the size. This is where the potential for an environmental disaster is.”
Victor Santos-Pedro, Transport Canada’s director of design, equipment and boating safety, would like to have an international regulatory regime in place before there’s any burst in Arctic shipping activity.
“We need to translate a lot of the experience into the rules so that we’re not at the end of the day rushing and asking why we didn’t have these rules in place,” he cautioned. “We have done that in certain areas but it’s not yet a comprehensive regime, because we still have exactly the same requirements in the mid-Atlantic as we have in the mid-Arctic.”
Benjamin Strong, marketing director for Amver Maritime Relations at the U.S. Coast Guard, said it’s imperative to get an eight-nation search-and-rescue agreement for aviation and maritime safety.
Mr. Paterson from Fednav agreed. “We need to have something to prevent a major incident before the incident shuts us down,” he warned. “We need a set of rules not only for the construction of ships, but for the routes to go along Alaska and through the Northwest Passage.
“Until we get better ice and weather charts, it’ll remain a huge challenge, and all of these things are deterrents for commercial shipping. All these components need to be put into place before the Arctic truly opens up, even in the summertime.”
Aboriginal communities must be consulted on all new shipping activity, he added. “It’s their land,” he emphasized. “We must ensure that all current and future shipping operations take into account their concerns. If we don’t, it’s not going to happen.”