An Excerpt From...


Sakhalin
Big Oil, Big Money in Sakhalin Endangers Biodiversity
by David Gordon

Sakhalin's rolling green hills are crawling with Texans and sport utility vehicles as the world's biggest oil companies survey the island's vast oil and gas deposits... As multinational energy companies promised $40 billion to develop the oil, the fish-shaped island came to symbolize big oil and big money.
-Jeanne Whalen,
Russia Review,
August 14, 1998.

On the island of Sakhalin, in the southwestern corner of the Sea of Okhotsk, a development project to tap offshore oil reserves threatens important marine and terrestrial habitats. While the planned oil exploitation offers potential riches to the region over the long term, the project could also damage many of' the other natural resources upon which local economies depend especially fish and crab. Although Russia's recent financial crisis has sent many foreign investors packing, international corporations in the region seem undeterred by the setback and are mov ing ahead with the projects, known as "Sakhalin I, II, and Ill." Moscow, too, supports the development, as the Russian federal government sees the "black gold" as a major resource to be developed for hard currency.

The proposed offshore oil and gas development around Sakhalin Island is the largest foreign investment in any enterprise in the Russian Far East. Investors include such companies as Shell, Mitsui, Mitsubishi, and Marathon (all in Sakhalin-Il), Exxon (Sakhalin-1 and Sakhalin-lll), and Mobil and Texaco (Sakhalin-IIl). Financial backing is being provided by such bilateral and multilateral agencies as the European Bank for Reconstruction and Development, Overseas Private Investment Corporation, and Japan Export-Import Bank.


Sakhalin's waters are extremely valuable from both environmental and economic perspectives. They provide habitat for more than 100 species of fish. The commercial fish include walleye pollock (Theragra chalcogramma) and Pacific halibut (Hippoglossus stenolepis). The continental shelf, which contains enormous oil and gas reserves, also hosts rich crab and pollock spawning grounds. In addition, Russia's endangered gray whale (Eschrichtius gibbosus) and 32 other endangered sea mammal species as well as the endangered Steller's sea eagle (Haliaeetus pelagicus) inhabit this region as well. The extraction of oil on the shelf will seriously effect important spawning grounds as well as the migration routes and the sea sonal habitats of the gray whales (Okhotsk-Korean population).

The Russian federal and Sakhalin regional govern ments plan to tender up to twelve different areas on the continental shelf of Sakhalin Island for offshore exploration and development. Sakhalin-l and Sakhalin-lI have been the first of these twelve projects to move forward. (Please see the map on page 18, which shows the location of these projects). They epitomize the dangers of quick foreign investment without stringent environmental controls.

A number of deficiencies were found in the Sakhalin II project when the San Francisco-based Pacific Environment and Resources Center (PERC) and other environmental groups organized an independent analysis of the Environmental Impact Assessment. For example, the companies are refusing to use Best Available Technology, which would require the rein Jection of drilling muds and cuttings and produced waters into the oil formation. Now, the companies plan to dump these polluting wastes into the ocean, although this practice is currently forbidden by Russian law and studies have shown that such dumping has a negative impact on biological marine resources.

Environmental specialists also worry about adequate oil spill response and mitigation plans and capabilities in the event of a catastrophic spill. There is little evidence that, by the time of planned first oil production in the summer of 1999, Sakhalin Island will have enough resources and trained personnel in place to respond to a disaster such as Alaska's 1989 Exxon Valdez spill in Prince William Sound. A spill like the size of the Exxon Valdez in the Sakhalin Island area could reach all the way to the shores of Hokkaido, thus damaging Japan's rich northern fisheries (please refer to accompanying map "Oil and Gas Development on Sakhalin Island Threatens Russian and Japanese Coastlines").

Climactic conditions in the Sea of Okhotsk are severe. Ice movement and high seas make oil development a risky venture. With greatly increased tanker traffic between Sakhalin Island and Japan in difficult weath er conditions, some observers believe that the likeli hood of a major spill is high. Russian government officials acknowledge that the currents of the Sea of Okhotsk have been poorly studied, and that the data available is insufficient to determine oil spill behavior. Some Russian officials also acknowledge that there has not been enough scientific study to determine the condition of fisheries in the area and the potential damage to fisheries from oil development.

 

Ecojuris, the Moscow-based public interest environ mental law firm, believes that the Russian government and international financial institutions have acted illegally by approving an inadequate Environmental Impact Statement for Sakhalin-II. In a letter to Viktor Ivanovich Danilov-Danilyan. Chair of the State Committee for the Protection of the Environment. Ecojuris President Dr. Vera Mischenko writes that the project's approval cannot be considered lawful and threatens to appeal the decision in court.

Oil and Gas Development on
Sakhalin Island Threatens
Russian and Japanese Coastlines

The 1989 Exxon Valdez catastrophe, which spilled 40,000 tons of oil into Prince William Sound, severely impacted the peo ple, environment and economy of Alaska.

This map illustrates that a spill of similar magnitude would have disastrous effects on the rich but fragile coastal and marine ecosystems throughout Sakhalin Island, northern Japan and the Sea of Okhotsk.
Are Sakhalin Island and Japan prepared to respond to an accident of such magni tude?

The figure at right represents an area equal in size* to the total area affected by she Exxon Valez oil spill**

The dashed line represents more than 1,700 km of coastline that would be threatened by an oil spill.

*The Exxon Valdez Oil Spill area includes the maximum extent of oiled shorelines, severely affected communities and adjacent uplands.

**Source Exxon Valdez Oil Spill Research and Restoration Information Project

Note this map is a comparison of Spill area. it is not a model of spill behavior.

© Pacific Environment and Reources Center, 1998.

Map provided courtesy of Pacific Environment and Resources Center

NOTE: To read the complete article, check "Biodiversity Briefings #1" on the subscribe form. We hope to offer the entire publication as a portable document (.pdf file) in the near future. To express your interest in this please fill out and submit the "Contact Us" form accordingly.

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