"Investors should think carefully about backing a project that puts shareholder value above human welfare and the survival of an endangered species."
-Igor Chestin, director of WWF-Russia in Feb. 2005 article "Whales May Not Survive Sakhalin Oil Operations, Panel Finds" (Environment News Service)
Sakhalin's waters contain some of the richest fisheries on the Pacific Rim with a salmon fishery unrivalled anywhere in Russia. It is also home to 25 marine mammal species, including 11 endangered species, most notably the critically endangered Western Pacific Gray Whale. Yet, the Sakhalin II project threatens these resources by extracting and transporting oil and gas in a marine environment with difficult climate conditions (including high seismic activity, heavy ice pack, frequent storms and fog). The island's communities, as well as local and international NGOs, voiced concern that this risky project would threaten this environment as well as the regional fishing economy.
The project operator of Sakhalin II is Sakhalin Energy Investment Company (Sakhalin
Energy, or SEIC), consisting of multinational corporations with Shell as the lead
operator (55% shareholdings); Mitsui subsidiary (25%) and a Mitsubishi
Sakhalin II poses many threats. It:
Whales & oil activities: click on the map above for a closer look (legend in Russian)
Despite repeated requests to Sakhalin Energy to improve its oil spill
prevention and response system, the company has not taken any significant
action to do so. Independent experts from Alaska and the Shetland Islands
issued a report as early as 1999 -- called "Sakhalin's Oil: Doing
It Right" -- warning that the current oil spill prevention and response
measures leave the coastlines of Sakhalin and Hokkaido vulnerable to a
catastrophic spill. The report recommended 78 specific measures -- including
such basic recommendations as mandatory tanker routes, increased monitoring
of tanker traffic, notifications to fishing vessels if a tanker is in
the area, and increased spill response equipment and improved access to
the shoreline where it would be deployed -- but these have not been acted
upon by Sakhalin Energy. As a result, Sakhalin and Hokkaido remain vulnerable
to a catastrophic spill, made even more likely by increased tanker traffic
foreseen under phase II of the project. As reported in today's Wall Street
Journal, "Spill response in Canada, Norway and Britain is generally
far more comprehensive," and in Alaska, following the disastrous
Exxon Valdez spill, "state and U.S. officials ordered the industry
to set up a massive spill-response system for Prince William Sound."
Sakhalin Energy's lack of action to increase its oil spill prevention
and response measures -- despite repeated requests from the public to
do so -- further underscores its lack of attention to environmental standards.
Case Study: Sakhalin II Excerpted from Leaking Operations: Environmental Consequences of World Bank and EBRD Involvement in the Russian Oil Sector, by Irina Baranova, CEE Bankwatch Network 2001. NOTE: For the full publication (available in English and Russian), please go to www.bankwatch.org/overview/mstaff.html and contact the national coordinator in your country.
Time to improve Sakhalin oil spill prevention and response measures February 21, 2000 "Given the economic and environmental value of the Sea of Okhotsk, it is not surprising that many in Russia and Japan are concerned about pollution. Yet government authorities, international companies and public financial institutions have focused on speeding ahead with efforts to develop Sakhalin Island's oil and gas fields, while little attention has been paid to improving the island's capacity to prevent and respond to oil spills."
General News on Sakhalin II:
EBRD urged by WWF to not fund controversial Sakhalin project Sept. 13, 2006
A Sakhalin Mayor Says Shell Unit Offered Cash Payment Oct. 27, 2005 (Dow Jones Newswire)
Sakhalin cost overruns reduce Shell assets July 27, 2005
Concrete Platform Begins Journey to Sakhalin II Field June 15, 2005
Analysis of Seismic Risks March 2, 2004 An independent report released by five Russian, Japanese and US environmental organizations which exposes deep cracks in the seismic risk analysis conducted by Shell/SEIC for Sakhalin II. The report documents that Sakhalin II seismic examinations present incomplete, inaccurate and contradictory information, understates seismic risks, fail to provide documentation of site-specific risks at individual fault crossings, and base their findings on hazards to people, but not to the environment.
Environment Watch, Dmitry Lisitsyn- www.sakhalin.environment.ru/en/
Pacific Environment, Doug Norlen - www.pacificenvironment.org
CEE Bankwatch Network, Petr Hlobil - www.bankwatch.org
Friends of the Earth - Japan, Naomi Kanzaki - www.foej