For many, the Northeast Passage through the Arctic could one day be a ‘Northern Suez Canal’. While icy waters have frozen such dreams, recent advances in nuclear technology might finally unlock the full economic potential of the once-daunting Arctic waters.
There is no shortage of interest in the High North. In October, the Trump administration in the U.S. approved a project to extract oil from beneath the Beaufort Sea, though melting ice has since forced changes to those plans. That same melting ice, while raising major environmental concerns, simultaneously creates other possibilities: among them, the prospect of dramatically shortened sea routes between Europe and Asia which could cut transit times by two weeks compared to the Suez Canal passage. Those reduced travel times translate to savings of 40% on both fuel and shipping costs, while lowering CO2 emissions by 52%.
However, the Northern Sea Route (NSR) along the Russian Arctic coast – a key leg of the Northeast Passage – has historically been traversable only from July to October. It has mainly been used by domestic Russian players, and requires the use of icebreakers and specially equipped ‘ice class’ vessels. In short, a thriving NSR has been nothing more than a dream, even with the melting ice, because it’s simply impossible to sail in the region for most of the year.
New technologies, however, present one possible solution: nuclear-powered ships.
The concept isn’t new. Russia, for instance, has used nuclear power on its icebreakers since the 1970s. However, the reactors of these early ships (at 90-170 MWt) weren’t strong enough to allow bigger ships to power through the thickest ice sheets. The icebreakers were just 30 metres wide at most, with a displacement of 25,000 tonnes, and could only clear the way for small freighters of up to 70,000 tonnes.
But a new generation of icebreakers could break through those limitations. These ships can leverage 175-315 MWt of energy and are almost 50 metres wide, with a displacement of 70,000 tonnes that would meet the needs of the biggest tankers. These ships will make the passage navigable all-year round. Related: Morgan Stanley Slashes Oil Price Forecast For 2019
Some of these new icebreakers could be operational as early as 2020. The technology they rely on – small modular reactors (SMRs) – could also help solve the second big problem of traversing these waters: a lack of coastal infrastructure. The reactors generate about 110MWe, compared with the 1GWe of classic reactors, and don’t require power lines which are practically impossible to construct across hundreds of miles of Arctic terrain.
A boon to trade?
Designed “for efficient operation and enhanced safety”, SMRs have the potential to become economically competitive. They can power ports and isolated communities, while supporting search and rescue posts. This shift to mobile nuclear power generation is already underway: the Akademik Lomonosov, the first functional floating nuclear power plant, is set to become operational in 2019 and provide energy for the remote port town of Pevek in Chukotka in Russia’s far east.
Rosatom, Russia’s state nuclear energy corporation, says its nuclear-fuelled icebreaker fleet has already escorted as much as 7.3 million tonnes of cargo through the NSR, and projects up to 80 million tonnes transported annually by 2030. These figures are a far cry from the Suez Canal (which welcomes one billion tonnes of cargo per year), but the promise of fewer days in transit along with “no queues and no pirates” would create new opportunities for Asia in terms of importing liquefied natural gas (LNG) from Russia and facilitating exports to Europe.
According to the UK Government Office for Science, the NSR would also create commercial opportunities for British ports, which could serve as transit hubs to transfer goods from conventional ships to ice class vessels.
The West is missing out on the Arctic Age
But despite this British interest, Western countries are some way behind. China and Russia are investing billions in the development of the NSR, with similar progress not being seen in the alternative Northwest Passage off the coast of Canada. While a Danish ship, the Vesta Maersk, was the first of a new 42,000 ton ice-class vessel to sail the NSR in late September 2018, the Chinese have been sending smaller cargo vessels of up to 19,000 tons through the passage since 2013.
Russia occupies a leading position in small nuclear technologies more generally, and is already marketing its on-shore and floating plants based on 55MWe and 6.6MWe SMRs. China is expected to come up with its own indigenous floating 50 MWe SMR by 2020 and on-shore 100 MWe systems in the coming decade. These countries will have a head-start once the scramble for the Arctic begins in earnest.
The new Arctic Age presents opportunities, but it also raises serious concerns. Related: The Dangers Of China’s Growing Oil Demand
Nuclear power could help address the environmental challenges that are causing the ice to melt in the first place. The authors of ‘The Future of Nuclear Energy in a Carbon-Constrained World’, a Massachusetts Institute of Technology (MIT) study published in September, say that unless nuclear energy is meaningfully incorporated into the global mix of low-carbon energy technologies, the climate change challenge will be more costly and difficult to solve.
The study analyses the reasons behind the stall of nuclear energy capacity, which accounts for just five per cent of global primary energy production. Nuclear’s potential is essential for a decarbonised energy future in many regions, said Jacopo Buongiorno, study co-chair, TEPCO Professor and associate department head of MIT’s Department of Nuclear Science and Engineering.
“Incorporating new policy and business models, as well as innovations in construction that may make deployment of cost-effective nuclear power plants more affordable, could enable nuclear energy to help meet the growing global demand for energy generation while decreasing emissions to address climate change,” he said.
More than any other region, the Arctic is being transformed by the real and tangible impact of climate change. With the ice sheets retreating and SMRs becoming a staple of ice-breakers, using low-carbon nuclear energy to make the NSR accessible year-round offers a responsible means of unlocking a shorter global shipping routes.
By Victor Nian for Oilprice.com
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