Arctic Operational Platform - ARCOP

(from AMSA Report 2009)

In 2003, participants representing the shipping industry, research community from five EU countries, Russia and Norway began a three-year research project: the Arctic Operational Platform (ARCOP). ARCOP was not to be re-negotiated by PAME, did not have a direct linkage to the AMSA objectives and did not express the views of the Russian Federation.

During the same period “JANSROP Phase II” in 2002 began a three-year program. In conjunction with INSROP (1993-1999), JANSOP II, funded by Japan’s Nippon Foundation, emphasized the eastern part of the Northern Sea Route (Siberia, Far East Russia and the Sea of Okhotsk). INSROP (See page 46) was supported by the Russian Federation and funded by a consortium of Norwegian, Japanese and Russian sources. Four hundred and sixty experts participated in INSROP in economics, navigation, meteorology, hydrography, military operations and environmental protection from: Russian Federation, Norway, Japan, United States, United Kingdom, Denmark, Sweden, Germany and Finland. INSROP results included an experimental Arctic voyage from Yokohama to Rotterdam, international conference, three books and 167 peer-reviewed papers.

ARCOP, funded by the EU Commission and European shipping interests, examined the different elements of oil and gas transportation between northwest Russia and Europe. ARCOP included six separate work packages, each concentrating on a specific topic but also using one selected transportation task as a focus of the research.

Fifty-seven research reports were produced by ARCOP and all reports can be found on the ARCOP website, www.ARCOP.fi. The contents of this section represent the views of the experts who worked within ARCOP and is presented as one of the assessments in the field.

Work Package 1, The Ice Information System, was started in early 2005. The research part of this work package was performed jointly with the Ice Ridging Information for Decision Making in Shipping Operations (IRIS) project, which is a separate EU-funded project coordinated by the Helsinki University of Technology (HUT). It developed methods to acquire online ice information and create accurate ice condition forecasts in a short time span. Kaeverner Masa Yards participated in this project and the results from IRIS were applied to ARCOP. Within ARCOP, the information from IRIS was compared to the experience within the Russian Arctic. The potential of the enhanced ice information system was demonstrated by economic analyses in the NSR conditions.

Work Package 2, Administrative Measures for Marine Transport, covered a large number of topics, varying from international law to rules and fees applicable in the Russian Arctic. Within international law, the regime in force in the Russian Arctic is in line with UNCLOS Article 234 and thus the situation regarding commercial shipping is more or less clear. It was also considered that UNCLOS Article 76, dealing with the extended continental shelves, does not really affect commercial shipping, since sailing in the central Arctic Ocean means passing through areas covered by Article 234.

Within the World Trade Organization and the General Agreement on Trade in Services (GATS), there are a number of issues that are not yet clear. But since the whole GATS regime covering shipping is still open, this is not a specific Arctic problem. Of interest to the Arctic shipping community is the question of icebreaker services. In some countries, this is considered a service that should be open for competition within the WTO. In the Russian Federation, as well as in Sweden, this is considered to be part of the infrastructure that the coastal state provides. A potential solution to this question will be realized only when large-scale transportation is in place.

The question of ice rules caused much discussion during the ARCOP workshops, and it appears the current system of rules is not consistent. When dealing with hull strength, the IMO recommendations refer to Polar Classes. But these Polar Classes in fact do not exist, since IACS has not published their Unified Requirements. Additionally, the Unified Requirements do not say anything about propulsion power. Among the national authorities like in Finland and the Russian Federation, there are, and obviously will be, requirements for minimum power. This puts the shipowners and ship designers in a difficult situation since there is no generally approved basis for the requirements. A great deal of work is still required to unify and make the requirements consistent.

The issue of fees seems also to be a difficult one. Generally, it is considered that the current level of fees in the Russian Federation - for example, $US16 per ton of oil cargo - is far too high. The problem is that the fees are set based on the current cargo flow, which is less than two million tons per year. If the cargo flow should increase to 40 million tons or more per year, the fees could decrease to a level of $US1 per ton. This fee would be consistent with fees collected in Finland on the Baltic Sea.

The other issue is that the system defining the fee level in the Russian Arctic is not as transparent as it is in Finland. It is impossible to track how the funds collected as fees are used. Also criticized was that the fee system does not encourage the use of improved ship technology. A simple calculation shows that using a more expensive vessel, which requires less icebreaker assistance, is not beneficial to the shipowner since he is forced to pay for the icebreaker service that is not needed. Hopefully, this issue will be reconsidered in the future.

Work Package 3, Integrated Transportation System, was the actual core of the ARCOP project. This work package looked at the different elements that are needed, from tankers and icebreakers to loading systems, traffic management and crew training; and the economics of transportation were analyzed. The scenario for which the development work was done was selected to be realistic, but not yet commercially in operation.

The task was to transport 330,000 barrels per day of oil production from Varandey in northwest Russia to Rotterdam in Europe. Two different operational tanker modes were used, independent and assisted. There were three alternative designs of icebreakers, each capable to assist the tankers up to 120,000 DWT. The route alternatives used were either direct transportation to Rotterdam, or shuttle service to Murmansk and trans-shipment from there to open water tankers to Rotterdam. The result was that assuming a fee level of 1.2 Euros per ton, a cost level can be achieved of 12 Euros per ton. This is considered feasible when compared with the pipeline costs for similar routes that are approximately 20 Euros per ton. What is important to notice is that the difference between the best and worst alternative is nearly 100 percent. This means that with optimization, a savings of more than 100 million Euros per year can be achieved. Over the lifetime of the project, this would amount to more than 2.5 billion Euros.

The work with the Vessel and Traffic Monitoring and Information System (VTMIS) showed that there are a number of information services that could be combined in a system for the Arctic. In the future, ice information must be part of any VTMIS system.

The lack of crew training was an issue that was strongly identified in ARCOP. Although many international codes including IMO recognize the issue, there is no international standard or even training service available. The need for trained crews for ice operations is increasing: an estimated 3,000 positions require Arctic training in future years. The subject of adequate Arctic crew training is also strongly related to the issue of Arctic marine safety.

Work Package 4, Environmental Issues, primarily looked at the risk levels of Arctic marine transportation. With the scenarios that were created, it seems that the risk levels were quite low when compared to experience from other sea areas. It must be noted, however, that there is no existing experience with large-scale transportation in the Arctic conditions. The experience on ice damages is mainly based on Baltic conditions. This is an issue that needs to be thoroughly studied in the future. The second issue studied was oil drift after an accident. The several scenarios produced showed that depending on the accident location, either high capacity or quick response time is important. This means that the response strategy must take both of these into account. What was satisfactory was that the different simulation methods gave consistent results and thus at least the experts are confident that the methods are reliable. The third issue was the actual oil spill countermeasures. Knowing that the use of in-situ burning and dispersants is efficient, but their use limited due to other reasons, the project concentrated on bioremediation and mechanical oil recovery. In bioremediation, the problem still exists that the type of bacteria available today is not efficient in temperatures below freezing. This means that the development of more specific PAH-degrading cold-adapted bacteria needs to be continued. Within mechanical oil spill recovery several options were studied. It seems that none of them is proven in a large-scale oil spill. There are efficient methods like the LAMOR Arctic Skimmer, but they have been designed for a limited size of oil spills and need further development.

The original idea within ARCOP was to arrange a large-scale validation voyage with a large-size tanker to the Russian Arctic. Unfortunately, no commercial cargo was available for a large tanker by the time the voyage was planned. What was done instead was that the Russian participants in the project analyzed some of the ongoing activities in areas that can be considered relevant. The current cargo operations at the Varandey terminal show that the downtime estimates used in the ARCOP economic analyses were quite close to those that are experienced today. Also, the time that is needed to perform the customs and other administrative formalities were realistic.

The analyses related to the operation of icebreakers with large tankers were done from experience in the Baltic. These analyses show that, at least in Baltic conditions, one icebreaker is often enough to assist one large tanker through the ice. Thus, the assumption that was used in ARCOP calculations may be slightly pessimistic.

During the project, eight workshops were arranged within the Work Package 6. The workshops gathered 401 specialists, representing 89 different organizations from 12 different countries during the whole project.

The workshops were an efficient tool to bring together different interest groups from industry, science and authorities. And although ARCOP was an EU-project, the workshops brought a circumpolar dimension into the work.

In general ARCOP managed to achieve most of its strategic objectives:

1. The workshops formed a forum for continuous discussion between the EU and Russia with some circumpolar dimension toward the end.
2. The review of the legal aspects resulted in a common understanding of the legal status of the Arctic sea routes, while raising a number of issues that need to be taken into consideration as the GATS regime for shipping is developed.
3. The research of the rules, regulations and requirements brought some clarity to the consistency of the regulatory basis of Arctic shipping in the Russian Federation, while noting current IMO and IACS regulations were not fully satisfactory.
4. The economic analysis of transportation showed how different factors, such as technology, fees, efficiency of the border formalities and the way of operating the icebreakers, were critical influences in decision-making.
5. The studies on environmental issues gave a clear warning that readiness for accidents must be further developed and that all the safety-related factors have to be taken seriously.
6. The work between the EU and Russian researchers improved the understanding between the cultures and led to the development of common recommendations on a number of topics. ARCOP was considered a part of the EU-Russia energy dialogue. The results of the project will be of help when developing energy transportation policies from Arctic Russia to global markets.

Arctic Council, 2009, Arctic Marine Shipping Assessment (AMSA), Arctic Council.©