An interesting article from Geopolitical Futures on the Arctic and the factors to consider when determining its relevance in geopolitics. From an economics standpoint, this region presents two opportunities: (1) new trade routes that will expedite transportation of goods between various points on the globe; and (2) potentially vast untapped oil & gas reserves. But both such benefits come with important caveats. For the time being, unless significantly greater amounts of ice melt, it is a very expensive route to take, nor one that can currently be used year round. And, as oil prices have swooned, the reserves are not economical since the typical project has a breakeven price of $100 per barrel. Lastly, where we have previously discussed choke points in the South China Sea, the Arctic Ocean is even more vulnerable, and any powerful navy (wink, wink) really can dominate sea activity at will.
Overall, a good primer on the metrics to think in terms of this area.
