Tuesday, December 12, 2006

Shell in deep water

Gazprom is now saying it could land a $30bn damages claim at Shell's door.

The deputy head of Russia's energy agency, Gazprom, Oleg Mitvol, has repeatedly accused Shell of breaching environmental law on the Pacific island of Sakhalin where it's exploiting a massive oil field in a highly environmentally sensitive area.

Accusations include illegal forest clearance, dumping soil in rivers and polluting one of the island's bays.

It won't be the first time Shell has made a mess of a beautiful place - cf Nigeria.

The Royal Dutch Shell-led Sakhalin Energy group also includes Japan's Mitsui and Mitsubishi.

But I believe the environment is a convenient football here, and the real goal of the Kremlin is to make billions and take better control of its energy assets for the sake of a higher profile on the global political stage.

When it flogged off its energy assets in the early '90s the deals weren't what it now thinks it can get. Russia does not receive the full benefit until Strategic International investors receive the cost of their investments back in full.

Shell was claiming a large increase in costs, thereby deferring further the profit Russia wants, even though the costs were probably at least partly justified.

Investors in Russia must align themselves with the government. The Kremlin sees the future for Russia's global dominance very largely in energy terms.

Elsewhere in Russia, for example in the selling off of millions of hectares of virgin forest to China, we can tell that Russia dosn't give a damn for the environment.
In this battle royal between two giants, we can only hope that the environment - and with it the Western Pacific gray whales that use the seas around Sakhalin for mating - is, even if incidentally, a winner.

And by the way full marks to IUCN for keeping watch and alerting us to the damage. And to Greenpeace for forcing Russia to make 74,400 hectares of ancient forest the ‘Kalevalski National Park’.

The creation of this new national park, which plays a vital role in preserving the biodiversity of northern Europe, marks the culmination of an eleven-year-long campaign by Greenpeace and conservation groups in Russia.

The less oil you use, the healthier our planet is.

Technorati Tags: ; ; ; ;

No comments: