Global warming has been described by the British prime minister's chief scientific adviser, Sir David King, as a greater threat than international terrorism - but it could mean business opportunities for the Port of Churchill.

Warmer temperatures may melt enough Arctic ice to open a new sea route between the ports of Churchill and Murmansk in Russia. The route may also remain open more months every year due to global warming.

"The rising costs of, and demand for, all forms of energy have put an extra emphasis on dollar-saving routes," says Manitoba MLA Jon Gerrard.

"Combining shipping and railway, the Churchill route is known to be cheaper and quicker. Since the combination of global warming and new ice-breaking technology will likely extend the shipping season, there's a real opportunity here."

Jacob Oldencamp, Business Edge
Bill Drew, executive director of the Churchill Gateway Development Corp., is looking to diversify the port's productivity.

In June, the Churchill Gateway Development Corp. (CGDC) - a non-profit organization funded by port owners OmniTRAX, Inc. and the federal and provincial governments - appointed Bill Drew as executive director, with a mandate "to explore and increase the list of products that can be handled by Churchill," says Mike Ogborn, corporation president.

Wind power and agricultural equipment, petroleum products, steel and fertilizers are being considered.

"The port is currently shipping 500,000 to 700,000 tonnes of agricultural produce annually," says Drew. "There was a poor harvest last year, so that figure may fall for now.

"We're looking at diversifying the basic commodities passing through Churchill both ways, especially wood pellets to Europe and phosphates coming into Canada. We've commissioned feasibility studies on provisions for containerized business as well," he says.

"Churchill also does a tremendous amount of the resupplying of northern communities, and we'll be working extensively with marine transport companies ... We haven't set any tonnage targets yet, because we're in the early stages."

The findings of 250 scientists, presented at a four-day conference in Iceland in 2003, were that the northern sea route along the Russian coast may be navigable for 120 days a year in 2100, as opposed to 30 in 2000.

Russia has expressed the hope that Manitoba may emerge as a transportation hub for funnelling its plentiful natural resources to North America.

Churchill - 1,000 kilometres north of Winnipeg and with a population of 900 - could also be an alternative to shipping goods from the Far East to Europe. Shipping from Japan to the Netherlands via Churchill could save 14 of the 45 days needed for a voyage through the Panama or Suez Canals, reducing shipping costs by $300,000.

North American exporters could also use Churchill to gain access to China and India, the world's fastest-growing markets.

Lloyd Axworthy, chair of the CGDC, says Russia's economy is now stable, fuelled by oil prices and a $1 billion investment by the Russian government in preparations at the Murmansk end. Though the crystallization of the project into reality is subject to negotiations and resources available, he believes it could take place in five years.

Axworthy says he has been a proponent of the Churchill port since the 1970s. "Hard factual analysis shows this shipping route (to Murmansk) will be about 1,000 nautical miles shorter than (Thunder Bay to Murmansk), resulting in substantial reductions in freight costs."

It will be an essential link to Manitoba, a vital link to 80 million consumers, he points out. With oil reserves waiting to be tapped in northern Canada, the port's development may trigger further exploration, he says.

Churchill's aging equipment, some of it dating back to the construction of the port in 1929, suffered from maintenance problems.

The port, and the rail line serving it, were bought by OmniTRAX, a firm headquartered in Denver, for a token payment of $10 to the Canadian government in September 1997.

The purchaser promised millions of dollars' worth of port improvements. The deal was brokered by Axworthy, then Canada's transport minister.

Since then, OmniTRAX has spent at least $100 million on the port and railway in order to meet security and shippers' needs. It now has the capability to ship freight both ways through Churchill to Mexico through a road-rail network called the Monterrey-Murmansk Trade Corridor.

Churchill can accommodate up to 35 freighters in a four-month shipping season extendable by icebreakers.

The port has been upgraded and can unload at least 100 rail cars a day, thanks to an automated process installed by OmniTRAX to render the unloading of rail cars more efficient.

The port is Churchill's second-largest employer with 80 workers during peak season.

CGDC president Ogborn says two myths about Churchill need to be dispelled.

One is that the rail lines there can only handle box cars - not hopper cars, which are open at the top. "We've proved that incorrect since taking over," he says. "Hoppers are easier to load, efficient to use, have greater carrying capacity, and more of them are available."

The other myth is that the railway lines cannot be maintained due to permafrost. "We instituted best practices for maintenance and changed the type of rock used to stabilize the track. The rock is produced in Manitoba," he says.

Meanwhile, the campaign to boost business at the port is continuing.

Last month, Manitoba Premier Gary Doer hosted a party to showcase Churchill. The party, including politicians, diplomats, executives and industrialists, was intended to afford a window on the north and its potential for shipping, eco-tourism, energy and trade.

The guests included new U.S. ambassador David Wilkins, Colorado Governor Bill Owens, New Brunswick Premier Bernard Lord and Quebec Premier Jean Charest.

(Ashoke Dasgupta can be reached at dasgupta@businessedge.ca)