They say if you can't tie knots, tie lots.
I'll start by saying that I would like to take this opportunity to thank this committee for giving me the chance to come in and provide a kind of industry-based opinion on matters of Arctic sovereignty, and indeed operations in Canada's Arctic, with an insight into operations in other jurisdictions and other operations in other areas.
My career at sea has led me all over the world. It has also led me to transit and operate in many of the waters within Canada's Arctic. I suppose from that point of view I can certainly offer some opinions as someone who has stood on the bridge of a ship, responsible for the operation of a ship in ice-covered waters in the remote and distant parts of Canada's Arctic and the issues that surround that.
I'd like to start by possibly giving you a tale of two cities, or a tale of two passages. This past summer, as you are probably all well aware, two German container ships transited Russia's northern sea route. This is particularly interesting because it was the first time outside commercial interests have been allowed through this route that the Russians had developed over probably the past 40 years. They have significant resources in that sea route. There are several large ports and much infrastructure along that route.
As a point of interest, if a ship were to sail from Japan to Europe by travelling the northern sea route, it would sail approximately 8,500 miles, as opposed to 13,000 through the Suez Canal. So there is a significant commercial interest to operating through that kind of route.
The ships themselves were ice-strengthened, and they were escorted the entire time by two Russian icebreakers. They sailed from Japan and ended up in Rotterdam. This is interesting. The company that owned the two ships was very impressed by the service. They were extremely pleased with the trip overall. It was a very good money-maker for them, and they are actively now soliciting further business through this route again. So that is the northern sea route through the top of Russia.
In the Northwest Passage—or as I read in the paper this morning, the Canadian Northwest Passage—approximately 200 vessels are operating in the Arctic at any one time. The number of vessels that actually transit through the Northwest Passage I don't have off the top of my head, but it's not a lot. In my opinion, I don't think we'll see dedicated, continuous traffic through the passage. I'm not going to dispute that the ice cap is receding or that some of the passages are open. There is more than one passage in the Northwest Passage. There are several.
If you look at sailing from the Far East to Europe through the Northwest Passage you are approximately looking at 8,000 miles, versus 15,000 through the Panama Canal, but you won't see vessels transiting that route like you will possibly in the northern sea route in Russia. The trade pattern is just not there. Most traffic that sails from the Far East and ends up in Europe is through the Panama Canal. The canal was built for that reason. They are currently expanding their capability. They're adding in a second set of locks to handle larger vessels, and unless there is a direct commercial or economic advantage in attempting to move into the Northwest Passage, I don't think you'll see many operators looking that way—again, unless it's economically viable. If companies look at sailing their vessels through that route and can prove it's a cost saver and they can increase on their freight rates, then they'll do it.
Then they have to look at the capital costs of building vessels to do that, or whether they can even get up there and pass through, with the ice conditions as they are.
The problem with the receding ice cap is that it's flooding the channels with multi-year ice, and it's unpredictable. The ice coverage changes from year to year. If you pass through a route one year that is relatively ice-free, there is no guarantee that the next year it will be relatively free of ice. In the past you could almost count on continuous ice coverage there. You knew it was there; it was a given. It was something you had to deal with.
If you don't see large commercial interests there, like container ships or cargo ships using it as a passage from one place to another, you'll see an increase in minerals coming out of the Arctic, and oil and gas exploration moving into the Arctic. The one that concerns me is the cruise industry increasing its visitation to the Arctic now, especially with the receding ice levels. This is worrying because of the unpredictability of the ice and ice coverage. There are also some other factors that I will try to explain.
In my experiences in the Arctic, sailing as a master of vessels operating in ice, what always concerned me, apart from the ice itself, was the lack of infrastructure and the remoteness in terms of being able to be rescued should there be an issue. There's also a lack of dedicated, good charting, soundings, and imagery. The Arctic has roughly 20% coverage in terms of charts, and only 10% of those charts are up to standard levels. I had the pleasure of using a chart, when I travelled the Labrador coast and into the Arctic, from what was originally surveyed by Captain Cook. There has been no change to that chart since then, apart from some additional information. The original baseline data is that old.
Lack of charting data and infrastructure really places a lot of emphasis on the ability of the crew, the master, or the senior officers on the ship. If you look at the cruise ships or vessels of opportunity that might be moving into these waters, that's a concern. They sail into particular waters that weren't ice-covered before, and they might sail in there again. If they don't know the area and don't have an ice pilot engaged, if they are using charts that do not have adequate soundings, and if they have no ice navigation experience.... I can conceive of no greater tragedy, apart from an oil spill in the Arctic, than a cruise ship sinking in the Arctic. If even a small cruise ship of 500 to 1,000 passengers were to founder or sink in some remote area, you would have to look at the evacuation and escape of the people and the time it would take to muster an adequate response and get to them. And you'd be dealing with people of various ages.
The centre I work for and represent is heavily engaged in operating in ice because of the offshore oil and gas industry. Our main clients are the offshore oil and gas industry. These are the people who are continuously looking farther north. There are plans to explore in the Davis Strait, the Beaufort, and maybe even the Greenland straits and off the coast of Greenland. There's an economic driver for this, so as long as the price of a barrel of oil stays high they will look that way. You will see them start to move into those areas. On what they have going for them, they have significant dollars to put toward research to enable them to do that.
That's what facilities like ours and the ocean technology cluster that exists in St. John's are addressing. We're looking at how we make the ships safer and how we make people safer. How do we train them? How do we make them aware of the operational issues? As I say, ships fit for the purpose and people fit for the purpose--this is something we are heavily involved in.
We haven't seen a lot of interest from cruise line industries, or the vessels of opportunity, as such. But the oil and gas industry is considering these issues very heavily, primarily because they are involved with oil, which is a nasty thing when released, and nobody wants to see that. They definitely don't, so it's very much in their favour to engage with groups like ours.
If you look at the Russian context and the Norwegian and the Finnish, there is currently in operation in the Russian Arctic one oil field that is completely ice-covered. The Varendey field is a successful operation using specifically built vessels with a specifically designed platform. That's completely ice-covered. This technology could possibly make its way over here.
St. John's, earlier this month, was the host of a major international Arctic shipping conference that saw groups from primarily shipping companies, classification societies, the shipping industry as a whole, that deal with the issues of how to operate safely in the Arctic, and indeed how to exploit opportunities that arise. While they were there to examine and look closely at Newfoundland's challenges in pushing an oil industry into an ice-operating environment, they were also very interested to know what Canada is doing, what Canada is preparing for. Does it have the ability to respond? What kinds of situations will you get involved in? So it was a very good discourse by lots of groups to present and to discuss these matters.
I will get back to the point of infrastructure. I remember one time when we were supplying a particular place in the Arctic, we actually had to use a bulldozer as one of our mooring bollards for the vessel. There was no facility there whatsoever to do anything with. This is pretty much the same throughout the entire Arctic for the towns, the communities that are there. This is what I mean by lack of infrastructure. For the vessels that are operating in those areas, that are providing the sea lift, the cargo, the staples of life that those communities need, what have you, there's nothing there for ships to be able to tie up to or to be able to operate from or to be able to do anything safely.
Friends of mine who are involved in transporting oil--heating oil and fuel oil--around the Arctic are continuously having to deal with the fact of the tides and the fact that they have no good area to tie up. They typically anchor and then try to run their hoses to the beach, to the facilities. They have really made a success out of it, but it's continuous vigilance. At any time they will have to stop and retrieve the hose. If something happens, then we have a problem. We have a spill or something going on that's not very good.
So you're looking at this all across the Arctic in many of the communities and in many of the places that are being developed. In the mining interests that are operating there, if you look at what's planned for Baffin Island--