SAKHALIN – NATURAL GAS FIGHT – GET USED TO IT!

To hear the full broadcast, click the title above.

[opens with Orson Wells clip]
[this text does not include the many clips from CEE Bankwatch “Black Tears of Sakhalin”; BBC news short clips; and excepts from interview with Julian Darley, author of “High Noon for Natural Gas”]

In late September, the world’s most expensive energy project, to develop the world’s largest Natural Gas and oil field, skidded over an embankment. Suddenly, environmental permits were denied. At the highest levels, London, Washington, and Wall Street are protesting. Like a new revolution, Putin’s Russia launches an energy battle, ticking away below the radar of the latest scandal headlines in the West.

Your own heat and electricity could be affected in years to come, in the struggle over the world’s last remaining fossil fuels.

There is a new Natural Gas fight. Get used to it.

The next energy hope is on the other side of the world, on a remote sub-arctic island off the East Coast of Russia. There, Shell Oil, along with two Japanese partners, is developing the Sakhalin Two oil and gas project.. The $20 billion dollar complex of offshore oil platforms, pipelines, and loading ports, is 80 percent complete. It was expected to reach full production in 2008. All those gas delivery contracts to various companies, including Japan’s largest electricity providers, have been signed.

Now the consortium can’t get the necessary environmental approvals to operate.

Russia is reneging on the sweet-heart deal given to the multinationals, including Exxon, back in 1994, by the prostrate post-communist government of Boris Yeltsin. Enriched and emboldened by their new oil wealth, Putin’s government wants to take back a share in the fossil fuel bonanza waiting below the sea, off Sakhalin Island.

Financiers are calling foul. Both the White House and Downing Street have protested. Some are suggesting that all new investment with the Russians is now in question. A deal is a deal, no matter how stinking, unjust, and environmentally irresponsible it is.

The European Union has said all future investments in Russia are in doubt, and this act is, quote, “providing uncertainties for the world’s future energy supply.”

Most of you heat, and perhaps cook with natural gas. Unseen, it also powers most of the new electricity generation in both Europe and North America. But American and Canadian supplies of Natural Gas have been in decline for over a decade. Canada, the former Gas giant, is expected to run down by 2014, just four years after the Olympics in Vancouver.

So everyone, from Beijing to Ottawa, is scrambling to lock in supplies from across the world – from Qatar, from Indonesia, and especially from Russia. The European economy could not survive a year without natural gas from Russia. That’s why this fight over resources on a remote island goes right into your home.

According to the BBC: “Sakhalin 2 is estimated to have total reserves of about one billion barrels of oil, and 500 billion cubic meters of gas, making it one of the world’s largest combined oil and gas projects.”

Putin’s bureaucrats are withholding the permits – citing ecological concerns. Big environment groups, like Friends of the Earth, the World Wildlife Fund, and Greenpeace, agree that Shell’s mega project threatens the last Pacific Western Grey Whales on earth, a thousand pristine salmon streams, and a wilderness wildlife haven.

Without the lure of Natural Gas and oil, our mega-corporations would never visit Sakhalin. It would be left to the 40,000 islanders – who, incidentally, get none of the benefits. They live in classic Russian poverty, and won’t even get a bit of the gas to heat their concrete huts. It’s all for us, none for them.

Leave your car and your heated room behind. Let’s travel to one of those faraway places, where it all comes from.

It’s called Liquid Natural Gas, or LNG. Of course this gas piped to the surface has to be frozen, at hundreds of degrees below zero, to compress and transport it to the West in supertankers. It’s the coming thing, and new LNG unloading terminals are being proposed East, West, North and South.

Shell Oil, the world’s third largest company by revenues (over $300 billion a year in sales) discovered a huge natural gas field in Sakhalin, an island hundreds of miles long, just north of Japan. In fact, Japan and Russia have been disputing ownership of Sakhalin for almost a hundred years. Now that it’s loaded with energy, the State with the biggest nuclear arsenal wins.

Japan desperately needs that energy, since it has none of its own. So two of its largest super-conglomerates, Mitsubishi and Mitsui, joined Shell as minority owners, to strike a deal with the drunken Boris Yeltsin. That was in 1994, when the Russian treasury was too broke to pay its teachers and miners.

And what a deal it was. The Russian State would get nothing until the multinational oil companies recouped all their development money, and the lease for the site was a princely $50,000 a year. Exxon also got into the action, opening an oil drilling platform at the South end of the Island.

Except for a small port on the southern tip, Sakhalin is surrounded by ice for six months a year. Shell needed a way to pump out its product year-round, and their giant gas field was about 500 miles further north. So they are building an underground pipeline, to run 500 miles to the open port – the whole length of the island. And they need another pipeline system under the sea, to get their oil and gas to the island terminal.

The main drilling platform, one of those giant city-like structures that appear in TV documentaries, and it’s system of feeder pipelines, are located outside a bay that is inhabited by other sentient mammals. These are the elusive Pacific Western Grey Whales.

The unique Pacific Grays, related to those that calve off Baja in Mexico, were presumed extinct, hunted to death for their oil. But it turned out they found a remote island, where they could breed unseen for over a hundred years, until they were re-discovered in 1977. That is the bay at Sakhalin Island. They are magnificent, intelligent ocean creatures. There are about a hundred of them left.

Now their breeding ground is the site of monster platforms, tankers, and construction ships, oil and gas leaks, and industrial chemicals. And that’s before the world’s biggest gas operation starts pumping.

The World Wildlife Fund has been watching the whales from an observation post. (all in Sak_Clip_OneWWF_OneWhaleDies 20 sec).
from: BBC_050915 Oil Giant…] see also: Sak_4_RussianexplainsOilSpillDamage_14 sec_CEE.wav &
Sak_5_MoreOnWhales_MovePlatforms_CEE.wav]

The biggest worry: an oil spill under ice. Ice surrounds the island half the year, yet these platforms are drawing both oil and gas from deep on the ocean bottom.

Now let’s travel to the Sakhalin Island itself. At the edge of the Russian empire, the Island was closed to all foreign visitors. It was the site of a secretive military base. The 40,000 islanders were the victims of splendid neglect by the Soviets. This continued under the broken post-communist state. Most lived by subsistence fishing, from the riches of the sea.

Then a miracle happened. Vast riches were discovered, and Western multinationals promised to inject tens of billions into the Sakhalin project. Yet today, most islanders continue to live in poverty, sidelined in the scramble for energy and power. They won’t even get a drop of gas to heat their homes, in this sub-arctic climate.
[Sak_3_ShellExplainingWhyNoGasforCapital_BBC.wav]

The gas, the oil, and the money all go to Moscow, Shell Oil, Mitsubishi, and Mitsui. And about 5,000 foreign workers have arrived to collect the paychecks.

Worse, the islander’s food supply and fish economy is endangered. Not only is a tanker spill inevitable, but the giant pipeline project running down the island is a recipe for lasting disaster. As a big scar is cut down through the pristine landscape, it must cross more than a thousand salmon bearing streams. The silt of construction threatens every one of them – because salmon avoid dirt in the water. The salmon fishery provides one third of all the income for the islanders.

And we know these pipelines, just like the ones in Alaska, always develop leaks, large and small.

The pipeline crosses 23 geological fault lines, in an area famous for its seismic activity. Earthquakes and tremors are also inevitable, threatening undetected leaks, or even floods of oil and gas underground, and in the waters.

[clip on seismic activity]Sak_6_Pipeline_SeismicArea_58sec_CEE.wav]

The Russian government is quite right to withhold environmental approval in such a situation. A lot of changes have to be made, but the project is wrong and unsustainable in the first place. Remember, none of this would be happening if you and I learned how to use alternative energy and conserve. Or if our economy could operate without raping foreign lands and species.

Cynics speculate the environmental permits are just chess pieces in a geo-political game to re-write ownership of Russian natural resources.
Through moves like jailing the Yuko oil head, Putin is re-asserting public ownership of the country’s fossil fuel wealth. And he’s not afraid to anger the largest multinationals in the world – because hardly anyone can operate now or in the future without Russian natural gas.

This is so important, natural gas deals are made by heads of State. Last summer, Canada’s Prime Minister Stephen Harper’s priority on meeting Putin for the first time, was to seal a deal for a billion bucks worth of gas for Canada. When German Chancellor Angela Merkel went calling, she was glad to come back with another gas contract – gas from the Shtokman field – originally intended for the US market. It’s a free-for-all of desperate energy buying.

Meanwhile, Bush’s regime seems intent on re-creating aspects of the Cold War. They have sanctioned the Russian State arms company, Rosoboronexport, and other big Russian companies, for selling arms and reactors to Iran. That’s when the American gas contracts disappeared to the Germans.
It’s hard-ball with home heating, and brinkmanship with fuel for electricity plants.

The Russians have also denied permits to American giant Exxon Mobil, who wanted to expand their Sakhalin 1 project on the Island. And they have protested Shell’s new claims that Sakhalin 2 cost $20 billion to develop, double the original estimate. Why should they care? Because Shell apparently promised the Russian state gas company, Gazprom, as 25% buy in, in exchange for rights in other Arctic gas and oil fields. Now the Russians have to give up twice as many resources, just to get back in at Sakhalin.

Meanwhile, environmentalists are trying to shut bank doors against further financing of the Shell’s Sakhalin monster project. The Shell consortium, called Sakhalin Energy, applied for a $300 million dollar loan from the European Bank for Reconstruction and Development, the EBRD. That institution was set up in 1991, with tax payers’ money, to help rebuild the former Soviet Republics, after the fall. Now Shell, with tens of billions of profits lately, want the taxpayers to fund their environmentally damaging project at Sakhalin. Groups like Friends of the Earth are calling foul, and saying no.

You can see a good video about all this, and see for the Island’s beauty and sadness for yourself, in a video called “Sakhalin’s Black Tears”. It’s from The CEE Bankwatch Network, released January 2006. Go to Google Video, and search for “Sakhalin” spelled Sakhalin. It’s 17 minutes long, and you will feel you have been there.

Hopefully, viewers will see a million dark figures lurking in the background of every frame of this story: themselves.

Because it’s the same all over the world. Wherever the oil and gas industry lands, the maximum amount of energy and profits go out, the bare minimum stays in the community (that’s capitalism folks!) – and the pollution lingers long after the party is over.

In Nigeria, the Ogoni Tribe living among the wells, pipelines, and pollution were kept impoverished. The greatest Ogoni spokesman, and environmental protestor, Ken Sara Wiwa, was murdered by the police, to stop criticism of the Shell project there.

In Saudi Arabia, the Shiites who live in the oil fields watch the wealth pumped out to the Sunni Royal family off in Riyadh. The people of Venezuela may finally get a piece of the pie, despite CIA attempts to install oil executives into the government, instead of the popular Hugo Chavez. Natural gas was pumped out of Bolivia for years, in the midst of abject poverty for the people.

It’s energy colonization, it’s dangerous and destabilizing. We can expect terrorism and wars to come.

And it all feeds the coming climate chaos. We can’t afford to burn the stuff anyway.

These are OUR energy crimes. We take what we need, and claim we don’t know what oil addiction costs people and the environment.

[Darley clip we have to get off gas]

This report is from Radio Ecoshock, the Net’s only all environment radio station, at www.ecoshock.org. Tune in, free.

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