Last month, Bar Harbor became the first American port of call for the first large cruise ship to traverse the Arctic’s fabled Northwest Passage, signaling what some say is Maine’s revival as a thriving maritime economy in a rapidly warming world.
U.S. Sen. Angus King says Crystal Serenity and its 1,000 passengers, some of whom paid up to $120,000 for the trip, are proof Maine can capitalize on the changes already underway in the region at the same time many of its scientists and policymakers, including himself, are trying to study and slow the Arctic melt.
If a large cruise ship can make it, commercial shipping will follow, King said. Not tomorrow, but in 10 to 20 years. While he would hope to slow climate change as much as possible, King said Maine should be pragmatic as it considers how to exploit the economic opportunities that will follow the melt.
“We are the logical place for ships to stop that are delivering goods to the eastern United States,” said King. “Throughout history, the cities along transit routes prosper, whether it’s Venice or Antwerp or Singapore. There is significant potential.”
With its location, maritime tradition and research institutions, Maine is in a perfect position to join Alaska as a key international player in the development of the policies, practices and emerging economy of the Arctic region, King said.
That is why Maine is hosting 250 senior officials and experts of the Arctic Council, an intergovernmental forum of Arctic nations and tribal peoples, in Portland this week. Member nations include the United States, Canada, Denmark, Iceland, Finland, Norway, Russia and Sweden. It is the first time the council has met on U.S. soil outside of Alaska, a reflection of the city’s rising stature in Arctic discussions.
The conference will cost almost $200,000 to host, with $50,000 coming from Maine and the rest from private sector donors, but is likely to generate about $1 million in lodging, food and entertainment spending, said Dana Eidsness, director of the Maine North Atlantic Development Office at Maine International Trade Center.
But it is the political and trade relationships Maine is hoping to strengthen with the other Arctic and sub-Arctic nations that Eidsness and others in Maine’s growing community of Arctic experts say are likely to prove most valuable to Maine’s economy.
The closed-door Arctic Council meetings will focus on the future of the Arctic, exploring issues like the impact of increased shipping traffic when, or if, the Arctic shipping route ever becomes cheaper for open-water vessels than longer southern voyages through the Panama or Suez canals.
A new study from the University of Reading in the United Kingdom found that commercial use of the Northern Sea Route above Russia and Norway, sometimes described as the Northeast Passage, could shave eight to 12 days off the traditional 30-day route between Asia and Europe using the Suez Canal.
Use of the Northwest Passage would cut four days off the traditional 25-day route between Asia and New York through the Panama Canal. But the potential time and fuel savings here are not as great as those of the Northeast Passage, and the route is icier than the Russian one.
It could be decades before Arctic passages are clear enough to allow regular passage of commercial shipping vessels without reinforced hulls and costly ice-breaking services and specialized insurance policies, all of which are essential to compete with today’s established trade routes, the study concluded.
Even the most aggressive melt estimates put commercially viable shipping through one of the Arctic routes atop Canada or Russia at least 20 years out, said Patrick Arnold, the president of Soli DG Inc., who works under contract managing operations and business development for the Maine Port Authority.
“Sending one cruise ship through, that’s like sending one spaceship to Mars,” Arnold said. “It’s exciting, yes, but it’s so speculative as to almost be hypothetical, and it’s not how you build a business, much less an economy.”
There is money for Maine businesses to be made right now working with Arctic partners, Arnold said.
He urged Maine manufacturers, farmers and fishermen to make the most of the 2013 arrival of Eimskip, the Icelandic shipping company that has opened up new export markets for Maine goods in Arctic markets like Norway, Sweden and Iceland.
“For the first time in 50 years, Maine has a direct line to Europe,” Arnold said. “We can build relationships, create new markets, and make money – right now, not 20 or 30 years from now – by selling Maine products and services to the Arctic ports that Eimskip already serves.”
Many of Eimskip’s ports are located in communities that must import almost everything they use, from groceries to building materials to electric cars, said Larus Isfeld, managing director of Eimskip USA. Maine should supply as much of that as possible, he said.
For example, last week Arnold and Isfeld met with the Maine Brewers Guild to map out an export strategy for the craft beers brewed in places like Belfast, Monhegan and Portland. The guild will visit Iceland next month to explore how to use a newly developed brew box to build an island market before possibly expanding into northern Europe.
The Eimskip connection is already paying dividends with the Arctic Council’s other member nations.
In 2010, Maine exported $23.9 million in goods to Finland, Sweden, Iceland, Denmark, Norway and Russia, according to WISERTrade data. Five years later, after Eimskip made Portland its American port of call and linked Maine directly to these nations, Maine exports to the six countries had jumped 57 percent, to $37.2 million. But Arnold notes that a lot of this trade to Arctic nations was actually with cities in their southern, non-Arctic regions.
And this Arctic trade data doesn’t include Canada, one of the Arctic Council’s major players, because Maine’s trade relations with its northern neighbor are long established and can be difficult to interpret because of the intense cross-border lobster sales as these two countries catch, process and package each other’s crustaceans.
Every one of those refrigerated containers of Aroostook potatoes and Down East blueberries and lobster, or forest products from western Maine, in the public terminal on Commercial Street in Portland represents jobs, said Maine Port Authority Executive Director John Henshaw.
The port is growing about 25 percent a year in volume of freight shipped, Henshaw said. He attributed that directly to Eimskip’s arrival, as well as improvements the port is making, like adding power plugs to cool refrigerated containers.
A busy port means extra longshoremen, truckers and switchmen, Henshaw said on a recent tour of the International Marine Terminal. But it also means new hires in the places that manufacture these goods, Arnold said, from southern Maine factories to the northern Maine forest products industry.
“The cargo is important,” Henshaw said, pointing at an Eimskip container, “but it’s really about jobs.”
Eimskip also connects Maine companies selling goods that specifically target the Arctic.
Harbor Technologies in Brunswick, a composites manufacturer recently acquired by Kenway, shipped a half-million-dollar bridge composite for installation in Mandal, Norway, in 2013. Now the company is vying to help build port infrastructure in Nuuk, Greenland’s capital city.
Sustainability is a key component of any development of the Arctic, Eidsness said, and some Maine companies are focusing on that niche market. She cited the work of Ocean Renewable Power Co. of Portland to harness tidal energy in Alaska as an example.
There is also money to be made now by the Maine scientists who specialize in Arctic research at places like Bigelow Laboratory for Ocean Sciences in East Boothbay, the University of New England and the companies that design and manufacture the technology and equipment needed to do those studies.
The Maine branch of international consulting firm Stantec is conducting a $25 million long-term study of the Arctic marine ecosystem on the Beaufort Sea shelf, which is located in Alaskan and Canadian waters. Ramboll Environ in Portland works on business development with an Arctic director in Tromso, Norway, 217 miles above the Arctic Circle.
Last year, Maine law firm Verrill Dana established an Arctic division to help navigate the region’s murky legal waters, with a dozen attorneys who specialize in contracts, intellectual property, trade compliance and international shipping. Pierce Atwood, another Portland law firm, has been working with Eidsness and Eimskip for years, doing things like helping Scandinavian companies bring high-tech marine products to market here.
“We shouldn’t underestimate the value of service exports to the Arctic,” Eidsness said. “Science, research, legal and consulting services are good business for Maine.”
There are also opportunities for some of Maine’s legacy industries like boat-building. King and others have been pushing Congress for more money to beef up the production of U.S. icebreakers, considered essential to capitalize on expanded Arctic trade routes. A Senate Appropriations defense bill contains $1 billion for a new icebreaker and is awaiting action. In making his request, King mentioned the possibility of Bath Iron Works building icebreakers as its Navy warship work starts to subside.
The relationships being built now with these Arctic peoples and places, as well as the regulatory, funding and research agencies that are increasingly active in the region, translate into Maine jobs and profits today, Eidsness said.
When the Arctic ice does melt, and the much-ballyhooed exposition of Arctic shipping happens, Eidsness said Maine will be ready to capitalize not just on its North Atlantic location but on its already existing business and cultural ties to the Arctic region.
“Even in the Arctic, it’s all about relationships,” Isfeld said. “Business is still business, and people around the world, especially in the ports and places we serve, the island communities, they like to do business with the people they know and trust.”