Arctic Yearbook 2015 - Page 46

46 Arctic Yearbook 2015 The analysis of pros and cons allows us to formulate recommendations aimed at the improvement of mechanisms of goods delivery to the northern territories. For improvement of fuels delivery to remote areas of Yakutia and Chukotka, it is necessary to not focus on an efficiency estimation of the separate stages of production, purchase, storage, and delivery. Rather, it is advisable to analyze the whole system of providing the region with fuel and power resources. Here, volumes of fuel and power resources consumed and paid for by the ultimate consumers should be used as a criterion in comparison of existing and proposed options of delivery. Currently, the economic efficiency of pre-scheduled goods delivery is due exclusively to the savings from separately calculated expenses on the purchase and delivery of fuels, and is owing to an absence of the necessary financial efficacy (Vasiliev et al. 2009). It is worthwhile to note here the issues related to the prospective re-settlement of the population from remote and difficult to access Arctic areas to places with more favorable climatic and transportation conditions. In spite of the expected economic efficiency of resettlement, we should take into consideration the required solutions of various social problems, which may require a long period of time. It is also obvious that the financial expenditures for resettlement will exceed the annual expenses on maintenance of communities, which will result in delayed economic benefits (Gritsevich 2008). An effective way of strengthening the energy security of Yakutia and Chukotka and decreasing expenses would be the arrangement of local fuel production to replace fuels transported from other regions. As proposed in the Strategy of Russian Arctic Development, an optimization of the economical mechanisms of goods delivery to the north is required, predominantly “using local energy sources and energy-saving technologies, as well as upgrading power facilities” (Putin 2013). However, profit maximization should not necessarily be the main goal for companies already mining or planning to mine in the Arctic zone. Feasibility and needs for companies oriented towards population welfare, rather than commercial interests, is predetermined by increased energy requirements for safety, the creation of new jobs etc. Coal mining in the Arctic is hardly possible without the participation of the state, as coal production projects are characterized by high capital intensity, long-term pay-back periods, and significant investment requirements. However, no federal incentives are currently offered to utilize local coals in the Arctic regions of Sakha in substitution of delivered fuels. Recently, the proportion of regional and local budgets taken up by the supply of energy to municipal entities has been shown to be rising. Special preferences at the federal level for coal production enterprises that mine or plan to mine in the Arctic region would be feasible, including fixed tax rates at 0% for mineral production; and an exemption from income, private property, company property, and transport taxes. In addition, simplified procedures for outgoing and licensing document execution for field development are required. State Support of Delivery of Fuel & Energy Resources