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Japan and the Northern Sea Route

SNA (Tokyo) — Global warming is progressively creating a new reality that ships from East Asia, including Japan, might soon be regularly able to reach Europe more quickly via the shipping route that runs along Russia’s Arctic coast, from the Bering Straits in the east to the Kara Sea in the west, rather than using the conventional route via the Suez Canal. Ice coverage has declined significantly over the past thirty years, with the US National Snow and Ice Data Center reporting in 2017 that the annual maximum extent of Arctic sea ice had hit a record low for a third successive year. Although this represents an environmental threat, it also makes the so-called Northern Sea Route increasingly accessible.

Attending the Arctic Frontiers conference at the end of January 2018 in the Norwegian city of Tromso, Keiji Ide, Japanese ambassador for Arctic Affairs, talked enthusiastically about his country’s ambitions for increased involvement in the northern polar region: “Unconditionally, there is enormous interest in the Northern Sea Route. Business people from Hokkaido were speaking about it at today’s conference,” the ambassador stated. “Of course, it is just a beginning… We want to collaborate with our Russian friends pursuing a long-term goal.”

The opening up of these frozen waters has attracted the attention of many countries, though Japan can claim a longstanding interest. In June 1941, the fishing vessel Kaiho of the Japanese Fisheries Agency set out on an ambitious voyage to traverse the Northern Sea Route. However, Japan’s ally Nazi Germany invaded the Soviet Union on June 22, changing the course of the war and forcing the Kaiho, which had reached the Bering Straits, to return to Japan.

Although Japan can legitimately claim a significant history in the field of polar research, in truth most of this relates to the Antarctic. It is only more recently that the Arctic and Northern Sea Route have once again been prioritized by Tokyo.

In 2009, the Japanese government announced its intention to apply for observer status at the Arctic Council, an ambition that was achieved in 2013. An Arctic Task Force was also established within the Ministry of Foreign Affairs, and the post of Japanese ambassador for Arctic Affairs was created.

Most significant of all was the announcement in October 2015 of Japan’s first-ever comprehensive Arctic Policy. In publicizing the document, Japan’s then-Ambassador for Arctic Affairs Kazuko Shiraishi declared that “this is the most important day ever for Japan’s Arctic policy.”

What accounts for Japan’s revived interest in this still remote and inhospitable region? The Arctic Policy itself includes firm commitments to:

—“Make full use of Japan’s strength in science and technology from a global viewpoint”

—”Give full consideration to the Arctic environment and ecosystem, which is fragile, with a lower ability to recover”

—”Ensure the rule of law, and promote international cooperation in a peaceful and orderly manner”

These are noble ambitions, yet one does not need to be a complete cynic to believe that the Japanese government may also harbor self-interested goals.

Japan’s Agenda

One likely factor is energy. According to an estimate by the US Geological Survey, the Arctic could account for 13% of the world’s remaining undiscovered oil and around 30% of its undiscovered natural gas. These reserves are particularly attractive to resource-poor Japan, especially following the 2011 Fukushima Daiichi disaster, which led to the shutdown of Japan’s nuclear plants and increased the country’s reliance on imported hydrocarbons.

Added to this, approximately 80% of Japan’s oil imports are sourced from the Middle East, making them vulnerable to political instability in that region. Japan’s supplies of liquified natural gas (LNG) are more diversified, but, in addition to the 25% imported from Qatar, the United Arab Emirates, and Oman, a further 27% is sourced from Australia, 18% from Malaysia, 8% from Indonesia, and 5% from Brunei. Much of these supplies traverse the South China Sea, making them subject to the increasing tensions affecting that disputed body of water.

The Russian Arctic is therefore attractive as a new source, as well as an alternative route, for Japan’s energy imports.

The key project in the region is the vast Yamal LNG plant, which is operated by Russia’s Novatek. Located on the Yamal Peninsula, north of the Arctic Circle and on the edge of the Kara Sea, the project began producing LNG in December 2017. When fully operational, three trains will produce 16.5 million metric tons per year. Using a fleet of fifteen specially-designed tankers with icebreaker capabilities, these supplies will be exported to European markets during the winter months and to Asian consumers, including Japan, during the summer. This is because it is still difficult to transit the Northern Sea Route in an easterly direction, from the Kara Sea to the Pacific, during the winter, when ice cover remains significant.

The Japanese company with the greatest involvement in Yamal LNG is Mitsui OSK Lines (MOL). This shipping company, in cooperation with China Ocean Shipping Company (COSCO), will take ownership of four of the project’s icebreaker tankers, with the first of these, named Vladimir Rusanov, expected to enter service in March 2018.

Additionally, on February 26, MOL signed a memorandum of understanding with the Russian government’s Far East Investment and Export Agency to cooperate in further developing the Northern Sea Route and Russian Far East. In particular, MOL is interested in establishing a transshipment hub in Kamchatka from which Arctic LNG can be redirected to Asian buyers. In welcoming this agreement, Minister for Development of the Russian Far East Aleksandr Galushka declared, “It is undoubted that this work helps to reinforce Russian-Japanese economic relations.”

Other Japanese companies have also been involved in Yamal LNG, including JGC and Yokogawa Electric. Moreover, in December 2016 the Japan Bank for International Cooperation (JBIC), an arm of the Japanese government, agreed to extend a 200 million Euro credit line to the project. Media reports also suggest that JBIC may provide financing for Arctic LNG-2, a neighboring plant also being developed by Novatek.

Competition and Cooperation with China

Although Japan’s involvement in the Northern Sea Route is noteworthy, it is overshadowed by China’s presence. Most significantly, while Japanese firms have some important contracts with Yamal LNG, the China National Petroleum Corporation and Beijing’s Silk Road Fund collectively own 29.9% of the project. In January 2018, it was also confirmed that the Belt and Road Initiative—China’s grandiose development strategy to connect Eurasian countries—will also include the Arctic region.

As such, further to economic factors, it is worth considering whether Japan’s heightened interest in the Arctic is a political response to China. In general, it is certainly the case that, throughout the globe, Japan is trying to keep up with Beijing’s expanding foreign policy influence. More specifically, the passage through the Northern Sea Route by the Xue Long (Snow Dragon), a Chinese icebreaker, in summer 2012 is also said to have spurred Japan to increase its own activities.

There is undoubtedly a competitive element to Arctic politics since the level of a country’s involvement in the region is a marker of its great power status. At the same time, however, Japan and China actually have significant shared interests in the Arctic.

As non-polar states and major trading nations, Japan and China both want to ensure that sea lines of communication in the far north remain open for international shipping and do not become subject to the control of Arctic coastal states. This is not guaranteed as Russia famously placed its national flag on the seabed beneath the North Pole in 2007. In November 2017, the Russian parliament also discussed plans to give Russian ships the exclusive right to transport hydrocarbons through the Northern Sea Route. Similarly, Canada claims that the Northwest Passage—North America’s equivalent of the Northern Sea Route—is part of internal Canadian waters, and not an international sea lane.

Brought together by the goal of maintaining freedom of navigation in the Arctic, Tokyo and Beijing have begun to coordinate policies. This has included establishing (along with South Korea) a trilateral high-level dialogue on the Arctic. Meeting for the second time in June 2017, the sides issued a joint statement calling for the international community to “maintain peace, stability and constructive cooperation [in the Arctic] based on a rule-based maritime order.”

In conclusion, even as Tokyo pursues its own economic and political goals, there is potential for Japan’s growing involvement in the Arctic to help warm its relations with both Russia and China.

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