UPDATE: Oil and gas in the Russian Arctic – environmental problems and repercussions

Publish date: November 13, 2007

MURMANSK - The Russian and foreign oil and gas industry is today unprepared to develop new drilling fields in the Arctic – so concluded Bellona’s Nina Lesikhina Bellona-Murmansk’s energy project coordinator at the presentation of the organisation’s new report “Oil and gas in the Russian Arctic: Ecological Problems and Repercussions.”

The report’s release serendipitously coincided with one of the worst oil spill disasters in Russia in recent memory when a storm on the Black Sea Sunday split a decrepit Russian oil tanker in two and sank yet another, spilling thousands of gallons of oil into some of Russia’s most pristine vacation waters – though Russian ministries and government environmental agencies vary wildly on how much oil was actually spilled.

The report, which was presented in Murmansk on Monday, presents an analysis of the condition of the Russian gas and oil industry in the Northwest European section of the Arctic Shelf, including those areas in the Barents, Pechora and the Kara Seas. The English version of the report will be made available in December this year.

“We realise that the conclusions of the authors will not please either the Russian authorities or the oil industry,” said Bellona-Murmansk chairman, Andrei Zolotkov.

“We took this step consciously, and focused sharpened attention on existing problems. We are confident that this will allow attention to be drawn to these problems and that attempts to reach compromises will be reached.”

Irrational subsurface resource management

According to the report’s conclusions, it is characteristic for Russian gas and oil companies to irrationally approach subsurface resource management, which is manifested in a low coefficient of oil extraction from fields and processing of associated natural gas. The gas and oil industries are focused on the maximum acquisition of oil and gas for the minimum price.

Russia’s coefficient for the extraction of oil, for instance, in 35 percent, compared to Norway’s 45 percent and the 50 percent coefficient obtained by the United States and Saudi Arabia.

The absence of economic stimulus – such as tax discounts – and lack of governmental legislative regulation leads to randomly oil extraction from the most productive reserves, a lowering of the coefficient of oil extraction and the irretrievable loss of a part of the resources. This, in turn, leads to the willy-nilly development of new fields and a consequent increase of the environmental load in the concerned areas.

The unstudied Arctic ecosystem

The Arctic ecosystem is currently under enormous man-made impact as a result of climate change, the global migration of pollutants, radioactive contamination and the like. Oil and gas activities could deal a deadly blow to the already stressed environment.

Nature in the northern seas is so delicate and vulnerable that even seemingly insignificant disturbances to its structure could lead to irreparable damage. It is difficult to predict just how badly the area would be affected because northern ecosystems are under-studied.

Some, however, assert that much study of the northern sea ecosystems has taken place. Igor Kotyasha of the Polar Institute of Science, Fisheries and Oceanography (PINRO in its Russian acronym) says he area undergoes regular study, and if environmental organisations wanted information, they could avail themselves of his institute.

“They could at least come to laboratories at scientific institutions with their own water samples,” Kotyasha told Bellona Web in an interview.

Dangers of opening Arctic fields

Opening the oil fields on the Arctic Shelf carries higher risks than drilling elsewhere because of the complicated natural and climactic conditions which demand the use of unique technical apparatus, an insufficient infrastructure, a lacking legislative basis for safety.

Delicate Arctic nature and its short food chain mean that an oil spill in the cold waters would mean that restoring ecosystems in the area could take decades.

Accidents and incidents

According to the Russian law on environmental preservation, all clean-up in the event of an accident is the liability of the polluting company. Such a company is also required to pay a fine for environmental damages and pay for the environmental reclamation work. In practice, it is much more complicated.

It is often that ships will flee the sight of an accident and hide oil leaks. But even if a company confesses its guilt, a long court battle often ensues as oil operators will disagree with the amount of the fines levies against them by government environmental bodies.

Emergency response systems are also inadequate. The problems include the age of the vessels at their disposal, outmoded specialised equipment for dealing with spills, the distance emergency bases are located from potential accident spots, a lack of modern equipment to locate spills, and systems to predict the behaviour of spills and a deficit of means to deal with cleaning affected shore lines.

“If you go out in the Murmansk Region in the Kola Gulf, you will see oily spots, if you go to Monchegorsk, you’ll see dead forests (that are the result of lumber and mining companies) and the situation with nuclear and radioactive safety is not improving,” said Zolotkov. “The development of the Russian Arctic shelf is for the moment taking place on paper. We would really like it if the development of this field didn’t lead to catastrophic ecological results,” he said dryly.

Environmental catastrophe in the Black Sea

As luck would have it, the presentation of the new Bellona report coincided with the early efforts to deal with the oil spill in the Black Sea on Sunday. Russia’s Emergency Services Ministry confirms that a total of four ships sank in the storm and another six ran aground. Another barge was cast adrift.

According to Emergency Services Ministry representatives reached by Bellona Web Tueday, the final damage is estimated at a spill of 6,000 tons of crude and 1,300 tons of fuel oil, for a total of 7,300 tons, or 23,725 gallons of oil products.

This is a severe downgrade of the amount emergency authorities were reporting Sunday and Monday, when they told Bellona Web and other agencies that the spill was estimated to be 560,000 gallons, or 172,300 tons.

By Tuesday, however, reports as various as 2000 tons or 6,500 gallons all the way up to 560,000 million gallons were emerging. Russian news agencies such as Interfax and RIA Novosti, quoting the same sources as Bellona Web, were consistently reporting the final tally on the spill at 2,000 tons, or 6,500 gallons.

Curiously, these same sources were reporting that Oleg Mitvol, deputy head of the Russian state environmental safety watchdog Rosprirodnadzor, had said fully 10,000 tons of oil was being scoured from Black Sea beaches. Mitvol further stated, according to Russian news agencies, that 1,500 tons, or 4,875 gallons of oil, were still adrift in the affected waters.

Mitvol’s statements imply that the final spill measured at least 11,500 tons, or 37,375 gallons – a far cry from the Emergency Ministry’s tally of 6,500. Rosprirodnador representatives, reached Tuesday by Bellona Web, could not account for the varying reports, and while cofirming Mitvol’s statements, would not say if his figures represented the final damage.

Emergency Services officials have been quoted by Russian newswires as saying that shore side efforts to clean up the spill are underway.

“This event again confirms the absolute imperfection of the technology and the danger of oil and gas industry activity – and most importantly, this event shows how terrible the results can be not only for the environment but living people as well,” said Bellona-Murmansk’s Lesikhina.

“It is specifically the residents of the region who will have to deal with the results of the spill. Experts say that this catastrophe shows the complete inadequacy of warning systems and reaction time to emergencies. It is as yet unknown if it will be possible to restore the ecosystem and how much effort, how many means and how much time this will take.”

Vitaly Servetnik, chairman of the Nature and Youth Russian environmental group said the Black Sea incident shows again that threats and catastrophic repercussions are an inevitable outcome of the development of the oil and gas industry in Russia.

“On yet one more occasion the assurances of experts about safety turned out to be empty promises exactly like the assurances of the experts about the safety of Chernobyl and many other installations that proved to be the reason for environmental catastrophes,” Servetnik told Bellona Web.

According to Greeenpeace Russia’s Mikhail Kreidlin, the event was a tragedy. First, the liquidation of the repercussions must be addressed. In Kreidlin’s opinion, the catastrophe could have been averted if the tanker that spilt in the high seas had been of a more contemporary double-hull design.