ZHAVORONKIN S.N. Murmansk Regional Non-Government Organization "BELLONA-MURMANSK"

By today total drilling work while searching for oil and gas in the Russian Arctic is equal to 160 000 meters. Only Arcticmoraeftegazrazvedka company alone opened 15 deposits: 3 unique deposits, 9 - big, 2 - average and 1 - small.

This is a gift from the nature and we should properly use it.

You can look at the WWF map of vulnerability of nature due to the oil exploration and transportation in the Western Arctic. You can see that protected areas and oil fields have common borders.

And that's not all. The state expertise has been conducted regarding oil pipeline transportation from Siberia to Murmansk harbour. Yukos, Lukoil, Sibneft, Surgutneftegaz oil companies are interested in this project. The materials have some alternatives of the pipeline route.
Generally, there are two alternatives: South and North. The North alternative stipulates the route through the White Sea and then pure tundra on the Kola Peninsula. In this case the pipeline would cross numerous rivers and lakes with rare fish and animal species. Construction of the pipeline using this North alternative can lead to irrecoverable loss of the bio resources.

From the environmental point of view, the South alternative, i.e. construction of the pipeline along the existing settlements and roads, is preferable. But in this case it is necessary to control the design, construction and operation of the pipeline. First of all, it concerns the passages through the rivers. It should be done using directed chilling or by the bridges.

Another environmental problem is offshore oil reloading. Due to intensive ships traffic, narrow Kola harbour, polar nights and northern winds it is no need to develop this kind of reloading. It is necessary to develop shore-based terminals for oil reloading and they should follow all the modern environmental requirements. Such terminals should be built according to the existing infrastructure of the ports. It is unacceptable to build the terminals close to the nuclear and radiation facilities and on their territories. Unfortunately, we have such examples in Murmansk. It is clear what kind of consequences can be during emergency situations.

From May 2003 the offshore reloading complex is in operation in the Kola harbour. The oil is loaded to the supertankers of the Murmansk Shipping Company. This and other companies plan to develop oil reloading for the West in the Kola harbour. Murmansk Administration received more than 10 applications for organising of offshore reloading terminals. One of the biggest supertankers in the world is based in the Kola harbour, it belongs to Rosneft oil company. The veteran tanker received a new name "Belokainenka".

The first in the region private Vitino port on the Kandalaksha harbour is in active operation. The oil transportation by railway increased as well.
Due to weak state environmental activities during the last 7 years and the practice of oil business development in Russia and abroad (including the recent oil catastrophes), it is necessary to strengthen the control of this field and involve the environmental organisations and population in the decision making process. The local people actually need the jobs, pure air, water, and nature.

At the same time NGOs need common work to follow up oil projects and increase the role of the environmental organisations and local population in solving environmental problems of the Russian Northern regions. So, there is a field for common work of the administration, oil companies and NGOs for the sake of the region.

First of all. NGOs have to concentrate on getting information about all coming projects, learn the experience of the NGOs from other regions, and establish co-operation and exchange of the advisors regarding coming projects.

Another issue is NGOs work with mass media, which often promise prosperity for the people on the Kola Peninsula after the oil comes to the region. I have not seen prosperity in Siberia or Komi, where oil industry is developed.

The accidents, which took place in the oil sector, damage the nature seriously, and the salvage operations require much resources and time. Some consequences of the previous oil accidents are still not eliminated.
I will remind about some of them.

Accidents on the oil pipelines.
• 1993. Oil pipeline Krasnoyarsk-Irkutsk 32 400 tonnes of oil, oil pipeline near Tyagan Tyumen region, 420 000 tonnes of oil;
• 1994. Pipeline near Usinsk, 100 000 tons of oil.

At present Russia operates more than 350 000 km of the oil pipelines, which suffer 50-60 thousand leaks, cracks, wholes etc. every year. 300 accidents with 10 tons oil discharges are officially registered every year.

Judging by the experience of the TransAlaska pipeline and the terminal from 1977 to 1999, it suffered 721 oil spills with 46 000 tonnes of the spilled oil or 0.002% of the total pumped oil volume, 2 billion tonnes of oil was pumped through the line.

Accidents on the tankers.
• 1989. Alaska. Tanker Exxon Valdez. 50 000 tonnes spilled along 1500 miles of the shoreline. 28 animal species suffered and only two of them recovered completely. 5 billion USD was spent to eliminate the consequences of the accident;
• 1997. Sea of Japan. Tanker Nahodka. 19000 tons of oil and 50 km oil spill;
• 1999. France. Tanker Evrika, 25 000 tonnes of oil;
• 2002. Spain. Tanker Prestige. 25 000 tonnes of oil, the damage is estimated from 2 to 40 billion Euro.
This is not a complete list of the big accidents; the list of the accidents with less spilled oil would take several pages.

Accidents on the oil rigs.
• 1979. Gulf of Mexico. Rig Ikstok-1. When the well was sealed (March 1980), 500000 tons was spilled.

What do the countries after the accidents occur? The USA adopted a special Oil Pollution Act-90, which obliged the tankers' owners to invest one billion USD in the Federal Insurance Fund for eliminating oil accidents. Besides, single-hull tankers were prohibited in the US as well as in the European Union.
Russia still keeps oil companies activities closed from the public control. Numerous court cases in Russia show that the companies have a lot to hide.

The Russian State Environmental Control is getting weaker and weaker year by year. Many recent administrative reforms deprived operative control of the oil activities, which bring huge profits to the owners. The projects with oil pipelines crossing nature protected areas and reserves come out very often.

The local authorities being happy with extra jobs in the regions and increased tax revenues try not to notice negative facts. There are facts when the borders of the protected areas were amended to satisfy the oil pipeline route. The oil pipeline Russia - China, threatens Baykal Lake.
At the same time no financial responsibility is mentioned in the project papers.

Some information about TransAlaska oil pipeline. During its 30 years of operation the profit was equal to 282 billion USD which was divided among oil companies (43 %). the State of Alaska 33 %, and the Federal Government (24 %). The Alaska State gets 12 % annually from the oil industry. Besides, a special permanent fund is established on Alaska, which received a part of oil revenues. The fund's money is invested in the shares. The local population receives the dividends from these shares. For example, in 2000 each Alaska inhabitant including infants received $1976.

Let's take Russia-China oil pipeline as example of solving the financial issues by the Russian oil industry and local authorities. Nobody mentions dividends. The project only describes the rules of the calculating income tax, value-added tax. uniform social tax. but they are not taken into consideration in the total sum of payments. Besides they are not distributed among the regions. So. it can happen that income tax will be paid again at the place where the companies are registered i.e. in Moscow. Therefore, the main payments to the local budgets will be natural-resource payments of tax and compensation nature. So, that's the practice of the Russian authorities.

The environmental NGOs, however, are constantly accused in all sins: they have spies employed, they get money from western oil companies, which are afraid of competition. Many examples can be mentioned also in Murmansk region from mass media. While the oil companies presented as most environmentally friendly. Bellona-Murmansk and the other local environmental NGOs united in one coalition are not against exploration of the local deposits, but in favour of doing that with minimal impact for the nature: prepare well emergency services and infrastructure to decommission the waste of this industry. Unfortunately, we cannot see this today.

How cynic one should be to accuse NGOs. population and scientists, who work together on environmental expertise of the oil projects, with lack of patriotism, work for competitors, if environmentalists demand better attitude to their land, fair profit distribution from usage of their natural resources. They do not ask to forbid completely oil industry and transportation, but require just better means of oil extraction and fair profit distribution.
In response they get information concealing ("classified" or "commercial secret"),

paid articles and reportage, paid opinion polls, own public evaluation. As a rule, those are afraid who has something to hide. It's not worth looking for internal or external enemies. We are not against oil and gas extraction, we are for constructive dialogue. Before making decision about oil projects we have to arrange public environmental expertise and public hearings, as well as investment projects analyses. If this is not done, then someone will get profit out of it, it means that there are some violations of the law and regulations, which can lead to environmental catastrophes.

We invite oil companies and government bodies to the dialogue. Only examination of the problem from all sides with various organisations and specialists input we can get the result, which will not make us ashamed in front of future generations.

ARCTIC SHELF OIL AND GAS CONFERENCE 2004