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Agence France Presse: British energy project challenged in Russian wilderness

By Dario Thuburn

Sirens scream, jeeps fly past, helicopters prepare for take-off. Russia’s flamboyant environmental enforcer Oleg Mitvol is in town.

Mitvol’s mission this time may be his biggest yet: to halt a 20-billion-dollar (15.8-billion-euro) energy project led by British oil giant Shell on Russia’s eastern edge.

“Sakhalin Energy is treating us like a banana republic,” Mitvol said Friday on a helicopter tour to a section of oil and gas pipelines that run like a scar down 800 kilometres (500 miles) of the energy-rich island of Sakhalin.

Russian officials and campaigners say the pipelines break a series of laws by causing erosion, silting up pristine rivers and running illegal access roads through dense forest.

“About 20 percent of the pipeline project is in violation of the law … Twelve rivers have been completely destroyed,” said Igor Chestin, director of the Russia programme for WWF, an international environmental watchdog.

Russian officials are now moving to revoke environmental authorisation granted in 2003 for Sakhalin Energy — one of the biggest privately funded energy projects in the world.

Executives from Sakhalin Energy, in which Shell holds 55 percent and Japanese firms Matsui and Mitsubishi own the rest, say this would cause massive financial losses and dent Russia’s reputation as an energy supplier.

“Although the project has faced significant environmental challenges, the company firmly believes that these have been fully addressed,” Sakhalin Energy said in a statement.

Energy analysts believe the environmental violations are a pretext being used by the Russian government to pressure Sakhalin Energy to sell a large stake to state gas monopoly Gazprom.

But that prospect does not bother local campaigners, who have complained for years that energy projects on Sakhalin threaten the reindeer population, salmon stocks and the endangered Western Pacific grey whale.

“It’s pleasing that the government is finally taking concrete steps. It doesn’t matter if there’s a political subtext,” said Andrei Kurbatov from Sakhalin Environment Watch.

The pipelines are to connect the vast Sakhalin-2 oil and gas fields being developed by Sakhalin Energy off the northeast corner of this often mist-shrouded island to the southern tip for shipping overseas.

Several countries have criticised the Russian government on this issue, particularly nearby Japan, where utilities have already bought up future deliveries of liquefied natural gas (LNG) set to start in 2008.

Mitvol, a media-savvy official who is deputy head of the Russian environmental agency Rosprirodnadzor said: “The company is very powerful… They’ve been using political levers both inside and outside Russia.”

One executive from the Sakhalin Energy project who has worked in Sakhalin oil and gas for several years said that violations were improbable but that the threat of oil spills was high.

“These companies are working to high environmental standards,” said the executive, who declined to be named since he did not have authorisation to speak to a reporter.

But he warned that Sakhalin Energy is woefully unprepared in case of an oil spill on the ice that seals off Sakhalin from the mainland for six months of the year.

The current oil spill response plan “is just not serious,” he said.

A copy of the response plan viewed by AFP showed there are no special provisions made for operating on ice and that the boats available in case of emergency are not adequate for the choppy waters of the Sea of Okhotsk.

Pacific Environment, a non-governmental environmental organisation based in the US state of California, says the threat of an oil spill is real because of high seismic activity on Sakhalin.

“Sakhalin Energy has no comprehensive oil spill response plan,” Pacific Environment said in a statement that warned of “possibly disastrous results of a large-scale oil spill.”

Harm wrought on Sakhalin’s fragile ecology would also impact the lives of up to a third of the island’s 600,000 inhabitants who depend on fishing as a livelihood, campaigners say.

The route of the underground pipelines is clearly visible from the air, snaking through a patchwork of autumn colours along the coastline and under hundreds of rivers.

All the attention on his pipelines has surprised Yevgeny, a middle-aged employee of Russian contractor Starstroi working on a section close to the town of Nogliki in northeast Sakhalin.

Yevgeny, who declined to give his last name, has been working on the pipelines since 2003 and said it has been technically one of his toughest projects yet.

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