Sakhalin II project



Background on Sakhalin:

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 subsidiary (20%). 

Sakhalin II poses many threats. It:

  • Imperils the most critically endangered gray whale population in the world and 11 other endangered species;
  • Threatens some of the few healthy salmon runs left in the world with over 400 kilometers of proposed on-shore pipeline trenched directly through salmon streams;
  • Envisages the world's largest liquid natural gas facility and immense associated greenhouse gas emissions;
  • Applies environmental standards far weaker than global best practices;
  • Skirts tax obligations by operating from a tax shelter in the Bahamas;
  • Promotes an unsustainable development path for Russia, which will receive billions of dollars less in revenues from the project than was anticipated; and
  • Weakens the regional local fishing economy through pollution impacts.
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.

The demands of NGOs to Sakhalin Energy (SEIC), Sakhalin II project operator:

  1. Gray whale protection:
    - Relocation of planned site of new PA-B platform far enough away from Western Gray Whales to ensure no negative impacts;
    - Avoidance of any seabed disturbance, any time of year, in whale feeding area;
  2. Pipeline impact on salmon: cross all salmon spawning streams via diagonal drilling underneath or bridges;
  3. Much more aggressive oil spill prevention measures, especially along the tanker routes out of Prigorodnoye;
  4. A commitment to zero waste discharge - 100 percent reinjection, including water-based muds; in particular minimization of impact on the rich Aniva Bay fisheries including cessation of all drilling waste dumping in Aniva Bay; 
  5. Better public participation practices, including the release of information and taking public concerns into serious consideration.
Briefings & reports from ECA watch members