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SOURCE: National Geographic

DATE: March 22, 2019

SNIP: While most of the world is watching the rapidly melting Arctic with increasing alarm and placing the blame squarely on fossil fuels, Russia and its partners in France and China are seeing ruble signs. Billions of them, in fact, to be made selling Arctic fossil fuels to the rest of the world.

Late last year, the Russian energy giant Novatek finished building the northernmost industrial facility on the globe: Yamal LNG, a $27-billion liquefied natural gas (LNG) plant sitting at 71.2 degrees north at Sabetta, on the bank of the Ob River. The facility and its new port cling to the eastern shore of the gas-rich Yamal Peninsula, which sticks up like a frostbitten thumb into the Kara Sea—that is, in the middle of frozen nowhere.

Some 15 ice-breaking LNG tankers are on order, along with a new rail line and two more LNG facilities across the Ob River estuary. The Russians expect all the plants to produce a combined 60 million tons of LNG each year by 2030.

The prospect of relatively cheap gas along the shortcut between Asia and Europe drew a few investors anxious for a toehold in the Arctic, which the U.S. Geological Survey estimates may hold a fifth of the remaining oil and gas reserves on Earth. Total, the French oil major, owns a 20 percent stake of the Yamal LNG plant, as does CNPC, China’s national gas company. The Chinese government’s Silk Road Fund owns ten percent.

The plant is just now beginning to operate at full capacity, but last year it shipped 7.5 million tons of LNG to five continents, according to Novatek.

The production at the new Yamal plant helped increase the traffic on Russia’s Northern Sea Route—which runs 2,800 miles from the Kara Sea east to the Bering Strait—by 25 percent last year, to 18 million tons of cargo. Putin has ordered that the tonnage be quadrupled to 80 million tons in just five years. That would still be only around a tenth of the amount shipped through the Suez Canal—but huge for the Arctic.

Whether future Russians will benefit from the present Arctic gamble—or will see it as Putin’s folly—remains to be seen. In the meantime, the Arctic continues to warm at twice the rate of the rest of the world.