In September 2009, two German ships sailed from South Korea to Denmark via the Arctic Northern Route, the first commercial vessels to use the long envisioned shortcut. Regional insecurity has led the five border nations--Canada, Denmark, Norway, Russia, and the US--to revise Arctic policies and to expand Arctic military capabilities. The five national policies are surprisingly similar and provide an excellent framework for cooperation. The military expansion is a classic security dilemma--one nations security measures are perceived as threatening to another. Resolving regional instability will settle the security dilemma. The shortcut opening is only the first of many changes as rapidly diminishing Arctic ice opens the door to significantly increased development in the region, which will bring vast energy wealth, fisheries, increased shipping, and tourism. It will also bring pollution, crime, territory disputes, and resource competition. This paper argues that anticipation of these consequences is creating regional instability and national insecurity among Arctic nations, which in turn is creating a security dilemma and potential nation-state conflict. It recommends the expansion of existing multilateral and bilateral alliances to avoid conflict while meeting the interests of Arctic nations.