The Arctic This Week Take Five: Week of September 2, 2019

One More Mike To Iceland

On September 4, US Vice President Mike Pence paid an official visit to Iceland. In the announcement of the White House, his visit is supposed to “highlight Iceland’s strategic importance in the Arctic, NATO’s efforts to counter Russian aggression in the region, and opportunities to expand mutual trade and investment” (White House). The arrival of Mike Pence sparked controversies among political leaders, activists, and local dwellers, who were astounded by the scale of preparations for the visit and the security measures taken (Bloomberg, High North News).

Take 1: As US Secretary of State Mike Pompeo noted in his speech during his visit to Iceland earlier this year, “Iceland won’t be neglected anymore” (Iceland Monitor). It seems that the US is keeping its promise. Following the absurdity of the recent Greenland “purchase case”, the heightened attention of Trump’s administration to the Arctic is raising a new wave of concerns. The day of Mike Pence’s visit marked a variety of civil protests in Reykjavik, including the raising of rainbow flags by Advania and a major public event “Party Against Pence” organized in front of the Parliament (The Guardian, The Reykjavik Grapevine).

India and Russia Team Up in the Arctic

Big news came from the Russian Far East, where the V Eastern Economic Forum took place this week. During one of its major side events, the XX Russian-Indian Summit, Prime Minister Narenda Modi and President Vladimir Putin signed a joint declaration pointing out the guidelines of further development of the “privileged” bilateral strategic partnership between the two countries (Kremlin.ru). Among other things, Modi and Putin discussed cooperation in the Arctic and Indian active engagement in Russian LNG projects, including Novatek’s Arctic LNG 2 (High North News, International Barents Observer). Russian Novatek and Indian Petronet LNG Limited also signed a memorandum of understanding regarding LNG supplies, electrical grid construction, as well as joint marketing (Novatek).

Take 2: It is not the first time Indian officials express particular interest in Russian energy and infrastructure projects in the Arctic and India’s willingness for close collaboration. As for now, India is primarily interested in LNG supplies though and is looking forward to the launch of Novatek’s Arctic LNG 2 and other upcoming projects. Leonid Mikhelson, Novatek’s Chairman of the Management Board, welcomed India’s interest in Russian LNG supplies noting in his comment that natural gas is “the most environmentally friendly type of fuel” (Novatek).

Re-Examining Svalbard

This week, International Barents Observer reported on the ongoing geological survey Russia has been conducting on Svalbard. The new study of the drill samples from Grumantskay-1, one of the wells left from the Soviet times, will be finished by October and is aimed at determining oil and gas reserves and their potential for future development of the archipelago (IBO).

Take 3: Rosgeologiya is Russia’s major geological exploration joint stock company. The survey is being conducted by one of its research centers KamNIIKIGS, based in Perm. This is the first time since 2002, when Norwegian authorities introduced stricter environmental regulations, that Russia is taking geological survey attempts (IBO). For some experts, this is an alarming move, for others – another occasion to stay wide-awake in regards to Russian Svalbard policy.

Eager to learn more about what is happening in and around Svalbard? Check out the upcoming Svalbard Science Conference on 5-6 November in Oslo and TAI’s Svalbard Alumni Workshop on 7 November.

Radiation Alert Still High

Following the tragic accident last month, when five Russian nuclear engineers died and three were severely injured during tests on a liquid propulsion system involving isotopes at a military facility (Rosatom), several news agencies reported on the high level of radiation near Nyonoksa in Arkhangelsk region. What is worse, two radiating pontoons were found abandoned on the shores of the White Sea, with levels several times above the norm (IBO).

Take 4: No wonder that Russian authorities have been slow in their response to the accident and until now have not provided any proper clarification due to the fact that all information remains classified. This, in its turn, led to major concerns among local dwellers, healthcare workers, journalists and experts, who accused state officials in notoriously prioritising military over civilians, war above peace.

Generosity á la russe: Novatek Gets More Tax Cuts

In late August, major Russian newspaper RBC (“РБК”) reported that Novatek would get 40 billion rubles in tax cuts for its Arctic LNG 2 megaproject on the Gydan peninsula. The money will be deducted from the budget of the Yamal-Nenets Autonomous district, whereas the rest 100 billion rubles, needed for the implementation of the project, will be provided from the federal financial reserves (RBC, IBO, Moscow Times).

Take 5: It is no wonder that Novatek is now getting more and more tax breaks from the Russian state, whose aim is to develop and get the revenues from the gas reserves and the Northern Sea Route as soon as possible, taking into consideration storm clouds slowly gathering around 2024 presidential elections. Contrary to the Moscow Times, writing about Putin “prioritizing tax incentives to encourage companies to develop the Arctic region”, there is a clear focus on one single player in the Russian LNG quest, who has managed to shape an attractive business image for international investors and politicians by labeling itself as Gazprom’s only alternative.