OULU, Finland — A new frontier of geopolitics is opening up as countries move to control lucrative and strategically important natural resources and shipping lanes in the Arctic, and Finland doesn’t want to be left behind.

The unprecedented rate at which the polar ice caps are melting is creating a flurry of activity. So far, Russia and China are leading the charge for the High North.

Moscow has been keen to stake its claim to an estimated $35 trillion worth of untapped oil and natural gas under the Arctic seabed and to exert its sovereignty over the Northern Sea Route — a shipping lane through Russia’s northern coast that represents a one-third quicker alternative from Asia to Europe than the Suez Canal. Beijing has also pushed its way into the region, announcing its vision in January for a “Polar Silk Road” as part of its trillion-dollar "Belt and Road" initiative.

For Finland, this presents a host of new opportunities.

“There is so much immense potential in the Arctic and the increased involvement of all these players has big incentives” — Harri Mäki-Reinikka, Finland’s ambassador for northern policies

Nestled in pine forests just 160 kilometers below the Arctic Circle, the snowswept city of Oulu along the northernmost reach of the Baltic Sea is perhaps best known as the home of Nokia’s research and development facilities. But the city of 200,000 may soon be a vital hub for Helsinki as the government looks to leverage Finland’s location as the European Union’s northernmost point to become the bloc’s gateway to the Arctic and to Asia over the next 30 years.

In the hope of gaining access to the potential flow of goods along the Northern Sea Route, the Finnish and Norwegian governments announced plans this month to move ahead with building a railway that would connect Finland, through Norway, to its deep-water ports in the Barents Sea.

A joint study by Oslo and Helsinki says the proposed railway would go from Oulu along to the Bay of Bothnia and connect to Rovaniemi in Finnish Lapland before ending in Kirkenes in northern Norway. Finalizing the rail link will require cutting through many layers of red tape, but the countries will begin looking at cost breakdowns and precise routing over the next two years.

Both the Finnish and Norwegian governments see the railway as an avenue for economic growth in their underdeveloped northern regions that could help a booming tourist industry, but also provide a more direct route for exporting Arctic resources from the area’s lucrative mining, forestry and fisheries industries to Asian markets.

“There is so much immense potential in the Arctic and the increased involvement of all these players has big incentives,” said Harri Mäki-Reinikka, Finland’s ambassador for northern policies. “Why wouldn’t we use the opportunities that are being presented to us?”

Timo Lohi, a bureaucrat from Sodankylä, a municipality north of the Arctic Circle that is home to Finland's largest mine, believes the project would be positive for the communities in the north.

As the development manager for Finland’s Northern Lapland region, Lohi is a long-time cheerleader for this pivot toward Arctic development. He says his local-level efforts have received interest from Asian businesses and even officials from China, and that now it's for Helsinki to bring the project to fruition.

“It’s still all very long-term at the moment, but I think this is our future,” said Lohi. “Now it’s up to the national government to find a way to make it work.”

New great game

A warming Arctic might appear like good news for transport. But shifting conditions in northern waters make it more likely seas will freeze unpredictably. Despite the 2017-2018 winter having seen the second-lowest amount of Arctic sea ice on record, the Baltic was almost entirely frozen. Off the coast of Oulu, icebreakers could be seen working overtime into March, with their lights beaming into the pitch black night across an otherwise frozen sea.

Further north, climate change is opening up the Northern Sea Route faster than many expected. A Russian tanker transited the shipping route in the summer without an icebreaker escort and another tanker made history in February by completing the journey on its own in the wintertime. Similarly, traffic on the Northern Sea Route set an all-time high in 2017, transporting 9.7 million tons in volume, according to the Russian Ministry of Transport.

But the Arctic is still a long way off from upending global trade. Only a small fraction of that 9.7 million tons — 194,364 tons — actually moved the entire route and the vast majority was internal traffic transporting construction equipment for Russian energy projects or moving natural gas, mostly from the $27 billion Yamal LNG project, to Asia.

Shipping in the Arctic is still difficult and expensive, and while future Russian energy projects and demand from Asia are likely to see an increase in activity along the Northern Sea Route, many experts still question its potential to become an established channel for shipping cargo between Europe and Asia.

“There will be a lot more activity in the Arctic, especially for the [Northern Sea Route]. But there’s also going to be limits,” said Daria Gritsenko, an expert on Arctic shipping at the University of Helsinki. “Don’t expect it to become the next Suez Canal.”

This may undercut some of the economic incentive for Finland to build a railway to the Arctic, but the added activity — and competition between countries — could still play to Helsinki’s strengths. As countries like China, Russia and the United States increasingly look to the north, demand for icebreakers — and their ability to turn frozen waters into lanes for commerce or defense — is rising. That means more business for Finland’s world-leading industry.

About 60 percent of the world’s icebreakers are designed and built by Finnish companies. Aker Arctic, a partially state-owned Finnish company, designed 15 new LNG supertankers for Russia, each with built-in icebreaker capacity. Similarly, Arctia, Finland’s state-owned icebreaking company, operates the world’s second-largest fleet with eight ships, and is exploring ways to rent out the ships to other countries when they aren’t needed in Finnish waters.

“It will take years for many countries to build new icebreakers,” said Tero Vauraste, the CEO of Arctia, motioning at a map of the Arctic with a Finnish flag at the center in his Helsinki office. “So we’ll provide our services to anyone that needs them.”

The local Arctic goes global

Amid the talk of grand projects, there's still plenty of room for error and whether Finland’s ambitions of gaining political and economic significance in the Arctic can be realized will depend on many factors.

For the disparate communities of the Arctic, the increased attention is both cause for celebration and concern. More development, tourism and industry means more economic opportunity, but it could also disrupt the way of life for indigenous communities, such as the Sami that live across northern Norway, Sweden, Finland and Russia.

Lohi, the official from Lapland, agrees that any future plans will need to be carried out in careful consideration with the Sami and said developers should better protect reindeer populations, as herding provides a major source of livelihood for Sami communities. In 2017, more than 100 semi-domestic reindeer were killed by freight trains in northern Norway on a line that passes through traditional grazing areas.

In addition to the Arctic railway, there are also more immediate plans to build a high-speed rail tunnel under the Baltic Sea connecting Helsinki and Tallinn. Once completed (December 2024 is the tentative date), the tunnel will provide a straight north-south connection with the proposed Arctic railway for Asian markets to mainland Europe through Finland.

“It’s about trying to fix the problem of Finland being the periphery,” said Peter Vesterbacka, a Finnish entrepreneur and former executive of Rovio, the gaming company behind Angry Birds, who is working to bring in Chinese investors through a public-private partnership to finance the tunnel. “For Europe, we are on the edge, but if you look at this from a Eurasian or Arctic perspective, we are right there at the center.”

The Arctic has so far set itself apart from other regions as a place where countries have managed to peacefully resolve disputes and cooperate, but the north is hardly immune from the wider geopolitical winds. For example, just after the imposition of U.S. sanctions on Moscow in 2014 for its annexation of Crimea, ExxonMobil was forced to stop its work in Russia with Rosneft, the state oil company. Without the assistance of Exxon, Rosneft suspended its exploration of the massive Victory oilfield in the Kara Sea. While Moscow has since leaned more heavily on China for financing its projects, Western sanctions are a long-term hurdle for developing Russian-Arctic energy resources.

Similarly, with U.S. President Donald Trump now on the verge of entering into a trade war with China, there's plenty of opportunities for conflicts to jeopardize the High North's future as an area for global free trade.

“We are seeing protectionism taking place all around the world," said Vauraste, the Arctia CEO. "All these developments slow down the progress of Arctic trade."