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The Economist: Energy reserve

Posted Monday 16 October 2006

SIR – You rightfully acknowledge the legitimacy of environmental concerns about Shell’s project on Sakhalin Island, yet you question the motivation of the Russian government for enforcing its environmental regulations (“Yukos revisited?”, September 23rd). Why is there no criticism of Shell for damaging the environment so badly that such intervention is needed?

Independent Russian and international organisations monitoring Shell’s project have documented a consistent pattern of environmental violations for years. These are not limited to a failure to control contractors, but include fundamental assessment and design flaws that began at the project’s conception and will cause damage to the environment throughout its lifespan.

Moreover, Shell’s staggering cost overrun will deprive the Russian government of billions of dollars in promised revenues from the project. If, as you suggest, this imbroglio dampens the investment climate in Russia for other companies (and especially those in the natural-resources sector), people will blame Shell for ruining things for those still to come.

Doug Norlen

Policy director

Pacific Environment

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