A Better Way to Build Icebreakers: Collaboration

This op-ed by Arctia’s CEO Tero Vauraste about international cooperation in icebreaking was published on 11 February 2016 in Arctic Deeply, an independent digital media project dedicated to covering Arctic issues.

A Better Way to Build Icebreakers: Collaboration

Why pay more than $1 billion for a new icebreaker when it costs $150 million to make one in Finland – and where they are used for only part of the year? Canada, the U.S. and Finland could share these vessels, a joint venture that would increase the number of much-needed ice-ready ships in the changing Arctic.

There are about 110 icebreakers in the world – and the global fleet is aging rapidly. The Canadian Coast Guard icebreaker Louis S. St. Laurent has been in service since 1969 and the U.S. Coast Guard cutter Polar Star was commissioned in 1976. Both are near the end of their effective lifetimes, and both countries have recently announced replacement programs with price tags of around $1 billion.

But a holistic look at the global icebreaker fleet suggests there may be alternatives to such high-priced purchases with long timelines. More than 60 percent of the global fleet of icebreaking vessels were designed and built in Finland. Many of these are being used in the Baltic Sea during the winter, when the waters freeze over, to keep ports and sea lanes open for trade. And only three or four icebreakers – out of a fleet of 25 – operate outside of the Baltic Sea when they are no longer needed locally. The others just rest by the quayside.

The current utilization rate for these icebreakers is around 30 to 40 percent annually. Could you imagine a successful airline filling only 30 to 40 percent of its seats? Or a car rental company making use of its vehicles at such a low rate? No, because such companies do not exist. They would be bankrupt at once.

Moderate or Expensive Investments?

It takes an investment of about $150 million to build a new LNG-powered icebreaker, such as the Polaris, which will be launched this winter. The current budgets for the U.S. and Canadian coast guard icebreakers are around $1.2 billion per ship. It’s quite a difference. North American taxpayers have an interest in this difference.

There is a huge need for increased icebreaker resources and – at the same time – a low utilization rate for icebreakers in the Baltic Sea. What if we used the Baltic Sea fleet to fill the gaps in North America? This could be done in many practical ways though chartering, public–private partnerships (PPP) or joint ventures, to name a few. North American coast guards shoulder a large number of demanding tasks, and an icebreaker PPP could improve service levels and even free up resources for search-and-rescue operations, enforcing sovereignty and conducting research.

These new icebreakers are expected to enter into service around 2020. There is a false perception that the new vessels will solve an important issue – that such resources are limited – for each of the two countries. But keep in mind that these new ships are expected only as replacements for vessels in the current, aging fleet. There will be no new capacity after the new builds are ready – and there are still five to ten years to go with the current fleet.

Four dockyards in Finland are capable of building icebreakers. They can produce and deliver up to five icebreakers in a year. Building just one icebreaker in North America is expected to take around five years or even more.

Finland is renewing its fleet of icebreakers. This provides a window of opportunity for the U.S., Canada and Finland to design a joint fleet that could be used collaboratively.

Let’s Break the Ice

Of course, there are some barriers to cooperation. For instance, U.S. Coast Guard vessels are naval ships, which means that they should be built in the U.S., but a presidential waiver can change this. Also, the Canadian Coasting Trade Act protects domestic interests by reserving trade along Canadian coasts for vessels registered in Canada, but it doesn’t restrict foreign vessels from icebreaking. Regardless, the main issue is that no country – the U.S., Canada, Finland or any other Arctic player – can afford to keep its economic assets beset in ice from year to year.

Timo Soini, Finland’s minister for foreign affairs, visited Washington, D.C. at the beginning of February, where he relayed his vision for Arctic collaboration in his statements during the visit. He reminded his audience that two Finnish icebreakers that had been operating as ice-management vessels for Shell in the Chukchi Sea, off the coast of Alaska, had made a demanding journey back home through multi-year ice via the Northwest Passage in October and November.He also met with President Barack Obama: One of the topics of their discussion was icebreaker cooperation.

For the sake of the Arctic and the industries operating in the north, the time has come to take advantage of this opportunity and to increase operational icebreaker collaboration between North America and Finland.

Polaris is the new Finnish icebreaker built at the Arctech Helsinki Shipyard. The vessel is powered by both diesel and liquified natural gas (LNG). (Photo: Arctech Helsinki Shipyard)

Communications Manager Eero Hokkanen, Arctia Ltd.

Phone +358 46 876 7140, firstname.lastname@arctia.fi

Twitter: @eerohokkanen

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