Our policy director Doug Norlen recently attended the Western Gray Whale Advisory Panel meeting as an observer.  This panel, known as “WGWAP” for short, was set up by the World Conservation Union (IUCN) and Shell/Sakhalin Energy to make recommendations to minimize the impacts from oil and gas development around Sakhalin on critically endangered Western Gray Whales.  The primary feeding ground for Western Gray Whales is directly adjacent to Sakhalin Energy’s drilling area and two offshore platforms.  The whales are impacted from noise, construction activities, ship traffic, and potentially by oil spills.

The idea behind the panel is a good one:  let’s bring together some of the best scientists in the world to review Shell’s plans and make recommendations to make sure that it minimizes the harm to Western Gray Whales.  This would work, if Shell took the panel’s recommendations seriously.  Unfortunately, when push comes to shove, Shell just does what it wants and ignores the panel’s recommendations.

This is especially apparent on noise issues.  For over a year now, the panel’s scientists have asked Shell to use a certain set of noise criteria.  Shell has refused, saying this is unnecessary and could lead to shutdowns in their operations and delays of their construction schedules.  But isn’t the idea here to protect the critically endangered western gray whales?  Shell’s refusal means that it can create noise “spikes” without shutting down its operations.  Yet clearly this is not to the benefit of the whales.

Environmentalists who were observing the construction this summer warned that a lot of noise in early July appeared to be frightening the whales away.  Shell says that its acoustic recordings either weren’t working or didn’t pick up the noise.  But since Shell refuses to abide by the panel’s reasonable recommendations, there’s no way to be sure.  Unfortunately, IUCN appears to have too close of a financial relationship with Shell to hold the company’s feet to the fire.  Meanwhile, potential public lenders, including the export credit agencies of the US, UK and Japan, have set adherence to the WGWAP recommendations as a condition of their financing.  Yet, they too appear to be letting Shell of the hook. After years of concern about Western Gray Whales, Shell is still avoiding its responsibilities to follow the advice of the scientists.

As Sakhalin Energy plans to conduct new seismic testing in 2009 – and seismic testing can have some of the most serious impacts on whales – it is too bad that the company continues to put its construction schedules behind the well-being of Western Gray Whales.  This is just one more of the failures of the Sakhalin-II project, and one more reason the project should not be supported by public and private investors.

Sakhalin’s economy depends on fishing.  Take Aniva District, for example:  one fish inspector told me that 70-80% of the local economy is tied to fishing.  And most of that is for salmon.

So it’s no surprise that one of the major concerns for people on Sakhalin about oil and gas development is its impacts to salmon.  Shell has been roundly criticized by environmentalists and even the Russian government for the impacts to salmon spawning streams from its pipeline construction.

Under Russian law, companies have to pay for damages to natural resources.  So Shell provided $11 million to the Sakhalin Fisheries Agency as compensation for its damage to salmon.  Regardless of the fact that this amount is too low, I was most amazed about how the Sakhalin Fisheries Agency then decided to use this money.  The Fisheries Agency used the compensation to reconstruct an enormous fish hatchery on the Taranai River.  The reconstruction included building a barrier that blocks fish from going upriver so that all the salmon can be taken at the hatchery.  Essentially, this will destroy the fisheries in the upper part of the watershed.

Shell and the Sakhalin Fisheries Agency should know better.  It’s much smarter to spend money to protect healthy wild salmon habitat than to build hatcheries that just lead to more threats to wild salmon.  Instead, they’ve just doubled the damage to salmon from Sakhalin-II and oil and gas development.  In the indigenous Ainu language, Taranai River means “Fish River.”  Too bad this fish river is being killed.

Russians love their dachas.  Dachas are summer garden houses, and many people – especially retired pensioners – will spend all summer on these small plots of land growing vegetables and flowers.  We visited a dacha collective on the edge of Prigorodnoye in southern Sakhalin.  The love and effort that these “dachniki” (dacha folk) have put into their land was obvious.  They showed us their flowers, berries, potatoes, and even grapes – yes, grapes! – that they have grown on their dachas over the last 30 years.  They fed us plums and apples from their trees and gave us homemade wine.

But these dacha owners are fighting with Shell.  Their dachas are just 1200 meters from Shell’s enormous LNG plant in southern Sakhalin, part of the Sakhalin-II project.  Originally, the LNG plant was supposed to have a 3.5-kilometer buffer zone.  At least that’s what the environmental impact review said, which was approved by the Russian government.  After all, if an accident were to occur at the LNG plant, the blast zone itself could cover 3 kilometers, including everything in this dacha community.  But if the buffer zone was 3.5 kilometers, Shell would have had to pay to resettle these dacha owners.  Shell’s solution?  Let’s make the buffer zone just 1 kilometer, and then Shell doesn’t have to resettle anyone.

Shell is in the process of commissioning its LNG plant, and as a result, has been flaring gas since early July.  You can see the flare 24 hours a day, even from the dachas.  They say they no longer need to turn on lights on their upper floors because of the flare.  Worst of all, you can smell the flare from the dachas.  They said that yesterday, the area was covered with black smoke from the flare.  Some days, if they are downwind, they say the smell is unbearable.  We’re helping them to start monitoring their air quality and send air samples to laboratories for analysis.  Meanwhile, some of the dacha owners can’t even spend the night at their dachas anymore due to the air pollution and the noise from the LNG plant.  Dozens of dacha owners have already abandoned the area, fed up with Shell and construction of the LNG plant, although dozens more are hanging on because of their love of the land.

The dacha owners are still demanding that Shell commit to a resettlement plan that would comply with international standards.  But Shell is refusing to take responsibility for its actions.  There is a certain beauty in Russian dachas, and Shell doesn’t seem to realize how much the ‘dachniki’ love their land.  The ‘dachniki’ have invested so much of their sweat and time into tending the land, growing fruits and vegetables.  I felt like I am seeing a part of Russia die as these dacha owners are being forced out by Shell.

Continuing our trip here on Sakhalin, we traveled north over the last few days to visit indigenous reindeer herders and indigenous fish camps.  The Uilta people in Sakhalin traditionally herd reindeer, while the Nivkh people are fishers.  Both peoples are being impacted by enormous oil and gas projects in Northeastern Sakhalin led by Shell and Exxon.

We used a Gaz-66 – an enormous Russian truck that can pretty much deal with any road conditions – to drive out to the reindeer herders.  After getting near to the area we hiked for about half a mile through lichen, dwarf birch, and dwarf pine to find the camp.  We saw berries and mushrooms as we walked – this “forest-tundra” area was very rich.  The herders we met had about 60 reindeer.  Only about 17 Uilta continue to herd reindeer.  Indigenous peoples such as the Uilta in Russia have had to adapt to constant changes – from forced collectivization and forced resettlement into large towns under the Soviets, to adapting to the market economy and a collapse of government subsidies in the 1990s, to massive oil and gas developments on their traditional territories over the last several years.  Traditions have been lost, although a number of indigenous peoples in Russia – including the herders who we met – are trying to restore the traditions.

The herders said that ever since Exxon built an enormous oil processing complex, the reindeer have been forced out of their traditional calving area.  The noise, lights, and constant traffic from this processing facility are too much for the reindeer.  The herders are worried about survival rates among the reindeer calves as they do what they can to increase the reindeer population.

The Nivkh fishers are also worried about the impacts of Shell and Exxon’s projects on their traditional fishing lifestyles.  They spend the summers in fish camps spread out along the bays of Northeastern Sakhalin and come there year-round to fish saffron cod, char, and salmon.  We arrived in time to see some of our indigenous partners fishing for salmon and then shared a wonderful traditional meal.  But the Nivkh grandmothers we talked with are worried – they say that more and more often, they come across fish that have sores and blisters or that smell like oil.  They don’t know why this is, and the oil companies have refused to study the problem.

Their frustrations with the oil and gas developments led the Nivkh, Uilta, and other indigenous peoples to blockade roads to Shell and Exxon’s projects in 2005.  As a result, Shell agreed to an indigenous peoples’ development plan that provides a council with $300,000 per year over 5 years.  But what happens after these five years are up?  In our conversations, we learned that many indigenous peoples are concerned that the money from this plan won’t really be used to help with restoring and protecting their traditional culture.  Instead, they know that they’re the ones who will stay in northeastern Sakhalin.  The oil companies will leave Sakhalin, and the native peoples will be left with the mess.

Vasily, a reindeer herder, told us that all he really wants is “calm.”  He wants a calm place to herd reindeer and restore his people’s traditions.

Deforestation caused by the Sakhalin II pipeline

Over 150 people stuffed the large hearing room in the Sakhalin Administration building to hear the Russian Minister for Natural Resources, Yury Trutnev assail Sakhalin Energy Investment Company (SEIC, Operated by Royal Dutch/Shell) for mass environmental violations.  Minister Trutnev cited over 54 environmental grievances including 5 that he said will be considered criminal offenses that will be filed in the near future.  The whole scene resembled a public prosecution with defendants Ian Craig, CEO of SEIC, and David Greer, deputy CEO of SEIC, sitting and listening to the charges brought against them. Amongst perhaps 30 reporters were 10-15 photo and television journalists who stuck their cameras within inches of the faces of Craig and Greer.  Both looked like they had been hit by a truck.

Several other people presented, including Pacific Environment’s partner, Dmitry Lisitsyn of Sakhalin Environment Watch, who gave another of his signature graphic photo presentations of project damage and superior practices from elsewhere, such as above ground crossing of earthquake faults on the Trans-Alaska Pipeline.  Others who presented also projected graphic pictures, demonstrating that they are learning from Dmitry’s approach!

Violations cited included illegal logging, creation of fire hazards, damage to rivers from pipeline crossing, mass erosion, and more.  Trutnev said that damage must be recalculated and a long term monitoring program be put in place.  He calculated fines over ten billion rubles for damage to Aniva Bay, and other fines for other damage such as to fisheries.

Craig was asked to stand and speak to the charges against him.  Craig said that of course SEIC will fully and transparently address the charges with the authorities and where appropriate take remedial action.  Craig also said that this moment was the first time that he had heard of most of the charges and that SEIC is committed to using the highest international standards.  You could almost hear the room full of people hissing back at him.

Minister Trutnev snapped back, saying, “Are your international standards as high as mine?  Because if so, lets take a helicopter ride tomorrow so that you can see what I’ve seen and you will see that the project is far from Russian and international standards.”  Trutnev also said that it’s ridiculous for Craig to claim that this is the first time he has heard of these problems because independent environmental groups have sent hundreds of letters about these problems.  Trutnev also praised Sakhalin Environment Watch for its contribution to the prosecution, and acknowledged that the Ministry got involved in the problems late and is therefore partly responsible for allowing the environmental situation to get as bad as it has become.

Environmental groups present remarked that it was indeed an enjoyably surreal event they never predicted they would witness.

Later, SEIC gave a press conference that several environmental groups managed to sneak into.  Nothing meaningful was said by Craig and Greer other than that they disputed that the subsea scouring underneath the PA-B platform is a problem any longer.  No reporters raised this concern; the fact that SEIC brought this up without prompting may suggest yet another smoking gun.