25 April 2006Jonathan Brown
Spring is being keenly awaited on Sakhalin in Russia's far east after another long winter. But when it finally comes in June it offers little prospect of a thaw in relations between environmentalists and Shell.
With the melting of the ice after eight months, the Anglo-Dutch oil giant is set to enter a crucial offshore construction phase in the development of its $20bn [£11.2bn] oil and gas programme. Wildlife campaigners say the price of the pipeline could be the extinction of a species of whale.
Campaigners, including WWF, are demanding that Shell abandon its plans to begin the work, claiming the company has failed to persuade an independent panel of scientists that its activities will not harm a critically-endangered population of western grey whales. The cetaceans are due to arrive in their breeding grounds when work begins.
An international panel of scientists, which met recently in Vancouver, said that the loss of a single breeding mother could result in the extinction of the species. WWF and others have also highlighted the existence of emaciated whales in the area which, it is claimed, suggests disruption to their feeding patterns.
Opponents of the underwater pipeline say Shell's own evidence shows that noise from last year's work exceeded 130decibels - the point at which whales become disorientated and change their direction of travel. There is also concern over reports of mass bird kills with more than 5,000 oil-covered guillemots, crested auklets and thick-billed murres discovered on the shores of the Shiretoko Peninsula in Japan last month. While there is no evidence to link the deaths to the project, they have raised further fears over the devastating effect a future oil spill could have on the environment around Sakhalin.
Campaigners hope such concerns have been considered by the European Bank of Reconstruction and Development (EBRD) whose latest consultation on a planned $300m loan for the project ended in London on Friday. The EBRD has been under pressure from green groups, including Friends of the Earth, Greenpeace, CEE Bankwatch and Pacific Environment, to reject the application by Sakhalin Energy Investment Company of which Shell owns 55 per cent. The application will now be considered at board level.
James Leaton of WWF said Shell had failed to make its case. "Shell must stop this project now and assess the condition of the whale population this summer ... Shell is ignoring the science, and the EBRD cannot guarantee the future of the whales, so they should not finance the project."
Shell, however, said it had been given the green light by the panel, which was convened to mollify international concern over the plight of the whales. "It is clear that the scientists are ready for us to go ahead with the offshore work programme for 2006," a Shell spokesman said. The company said it hoped to finish the pipelines within a year to minimise disruption, scheduling the loudest activities away from the whales' feeding areas, and making changes to its vessels to reduce the risk of collision with whales. Shell also claimed to have changed the route of the pipeline to avoid the feeding area of the whales.
Shell is not the only oil giant on the receiving end of criticism this week. BP's chairman, Peter Sutherland, announcing record profits of £11bn, was forced to face down claims the company had an "endemic problem" with its safety record. It followed a fatal fire at its Texas city refinery, a pipeline leak in Alaska and the capsizing of its $1bn platform in the Gulf of Mexico.
An industry analyst, Iain Armstrong of Brewin Dolphin Securities, believes the record profits resulting from soaring oil prices is masking turbulent times. Last year, companies were forced to contend with accidents, natural disasters, mounting environmental scrutiny and an increased tax burden. Ironically, one of the most promising areas was in renewable energy sources, with companies investing huge amounts in the new technologies, he said.
