BC Business
Pacific Northwest Passage | BCBusinessThe opening of the Northwest Passage marks the start of a new era in commercial shipping.
In September, the MV Nordic Orion became the first commercial bulk carrier to use the Northwest Passage as a commercial trade route, moving a shipment of B.C. coal from Vancouver to a steel mill in Finland.
Before the ship had even cleared the Passage, the Danish company that owns the Nordic Orion heralded the voyage as the dawn of a new age of commercial shipping: “The opening of the Northwest Passage as a commercially predictable trade lane opens up new opportunities for the important Arctic region and for the coal, minerals and shipping industries,” said Nordic Bulk Carriers managing director Christian Bonfils.
Bonfils makes a compelling case for using the Northwest Passage to ship bulk resources. The route shortened the distance of the coal shipment by 1,000 nautical miles, which Bonfils estimates saved approximately US$80,000 in fuel costs, in addition to reducing greenhouse gas emissions. It also allowed for 25 per cent more cargo weight than a similar shipment through the Panama Canal, whose shallow depth limits the capacity of ships.
The owner of four “ice class” bulk carriers—Bonfils says the ships have at least 3,000 tons of extra steel reinforcing and much more powerful engines—Nordic Bulk has bet its future on more coal and mineral exporters choosing to use the Northwest Passage, which the company estimates is now open for at least two months a year due to the effects of climate change.
“We will load another cargo in Vancouver in a few weeks, but at this stage we don’t know the routing,” Bonfils said by email from Hellerup, Denmark, in late September, adding that the company has not determined whether it will use the Northwest Passage or the so-called Northern Sea Route along the Arctic coast of Russia, another Arctic route that the company has been a pioneer in navigating.
The Nordic Orion left Vancouver on September 6 and in less than three weeks emerged beyond Baffin Island, effectively clearing the passage. The achievement has prompted speculation that it may be the beginning of a new shortened export route for B.C. resources to markets in Europe and beyond.
Michael Byers, a professor of political science at UBC and author of 2010’s Who Owns the Arctic? Understanding Sovereignty Disputes in the North, says a seasonally ice-free Northwest Passage will be of limited use to the global shipping industry—he estimates “a fraction of one per cent” will have a practical use to even go there—but that Vancouver, a port city that specializes in the bulk export of raw materials, could be a future beneficiary.
The Northwest Passage “is primarily attractive to the transport of bulk goods, which is a Vancouver specialty, and also potentially to cruise-ship traffic, which is again a Vancouver specialty,” he says. “So for a tiny fraction of ship movement out of Vancouver, it could be attractive, but it’s in no way going to replace the major arteries of trade.”
The Northwest Passage saved the need to ship the coal through Panama to the east coast of the Americas and potentially reload it onto a new Finland-bound ship. But the passage will not help B.C. exporting resources to our primary trading partners in Asia, nor will it displace rail bound for the lower 48.
Bonfils says that Vancouver is not the only B.C. port location to benefit from this sea route: “This is interesting for all Canadian west coast ports, but the higher north you get the better,” he adds, in reference to ports such as Stewart and Prince Rupert.
Then there are the unique risks of using the route, which future B.C. exporters will have to weigh against the benefits of shortened distance, fuel savings, reduced pollution and increased load capacity. “There is very poor search and rescue and there are absolutely no ports of refuge,” says Byers. “There are a whole range of different issues that would dissuade shippers, and if it didn’t dissuade them, it would substantially increase insurance costs.”
For years Byers has been advising Canadian governments of the need to prepare for an increasingly ice-free Northwest Passage, which he says will only become more viable as a commercial shipping route as the effects of climate change continue. Regardless of when and how it evolves as a shipping route, it’s here to stay.
“When I was warning about an international shipping route through the Northwest Passage 10 years ago, people laughed at me,” he says. “They said it wouldn’t happen for 50 years. Well, it’s here now.”