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.

We received a rather strange press release from Shell and Sakhalin Energy over the weekend.  The press release stated that severe weather conditions had damaged production facilities at Sakhalin Energy’s platform of northeastern Sakhalin.  Apparently there was a “small release” of oil into the sea.  Even more strange, Sakhalin Energy spokespeople say that they don’t know when the release occurred!  They say the release was less than 10 liters – frankly hard to believe, given Sakhalin Energy’s track record so far.

I don’t understand how the world’s largest integrated oil and gas project, built according to Shell and Sakhalin Energy to world-class standards, can have an oil spill and the company doesn’t even know when it occurred.  Meanwhile, I’m not surprised that this happened – severe storms hit Northeastern Sakhalin on a regular basis, especially going into winter.  Check out this photo to see the kind of waves you can get offshore of Northeastern Sakhalin.

Of course, as global warming intensifies, so will the intensity of the storms.  This latest spill is similar to a September 1999 spill in which somewhere between 2 and 200 barrels of oil (depending on whether you ask the company or environmental groups) spilled when the floating storage tanker broke off from its moorings.  Let’s hope that independent analysis will show the actual amount of the spill and when it occurred.

This latest incident – and Shell’s lack of information about when it occurred – proves once again that offshore oil development in arctic and subarctic conditions is just too risky for these fragile environments.  Shell just doesn’t know how to do it right.

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.