Enviros Warn of Gas Project's Impact on Endangered Whales

YARMOUTH PORT, Massachusetts, November 25, 2003 (ENS) - A coalition of conservationists is urging the Export Import Bank of the United States to deny financing to an international oil consortium project that threatens the critically endangered western Pacific gray whale. Scientists estimate there are only some 130 of the whales remaining in the world and fear the project will harm the waters around Russia's Sakhalin Island - the species' only known summer feeding ground.

Every year, from May to November, the entire known population of western gray whales comes to feed off the northeastern shores of Sakhalin Island, located off the eastern coast of Russia just north of Japan.

This habitat is slated for increased oil exploration and drilling activities under a proposal by the Sakhalin Energy Investment Company (SEIC) - a consortium led by oil giant Royal Dutch Shell and including Japanese companies Mitsubishi and Mitsui. The consortium does not currently have any American companies.

The consortium began exporting oil from a massive field offshore of Sakhalin Island in 1998.

SEIC says it exported some 10.7 billion barrels of oil from the area in 2002 and it is keen to tap into the massive gas reserves of the region.

The consortium is now seeking public financing for the second phase of the project, which includes plans to build four pipelines and to construct one of the world's largest production plants for liquid natural gas (LNG).

The western Pacific gray whale has been decimated by hunting and conservationists fear expansion of oil and gas production in the species' primary feeding ground could drive the species into extinction. (Photo courtesy U.S. Fish and Wildlife Service)

But the coalition of 11 environmental groups says these plans will harm the whales and "pose an unacceptable risk to the region's environment and economy."

In a letter sent today to Export Import Bank President and Chairman Phillip Merrill, the environmental coalition urges the bank to "conduct the rigorous and objective review of environmental impacts that U.S. law and the Bank's policies require."

"We believe that the environmental risks posed by the project's second phase ... indicate ... that funding it would be inconsistent with Bank policies and with U.S. law," the coalition wrote.

The pipelines and the LNG facility are located within the gray whale feeding grounds and the coalition says the project will negatively impact the endangered whales and the surrounding ecosystem.

"All this activity would take place in a fragile and biologically rich environment, which, in addition to numerous marine mammals, supports one of the most economically robust fisheries left in Russia," the coalition says.

The waters around the island are key migration paths and habitat for commercial species such as salmon, crab, Pollock and herring.

A spokesman for the environmental coalition said it does not know the exact figure the consortium has requested from the Export-Import bank, but believes it is in excess of $100 million. The SEIC could not be reached for comment.

The Export Import Bank is the official export credit agency of the United States, with the mission to "assist in financing the export of U.S. goods and services to international markets."

The coalition is lobbying the bank because the federal agency is required by the National Environmental Policy Act to consider the environmental impacts of its actions, including those that take place outside U.S. territory. It also has obligations under the Endangered Species Act and Marine Mammal Protection Act to protect the endangered whales.

The western Pacific - or Korean-Okhotsk - gray whale is listed as endangered under the ESA in 1970 and as critically endangered by the World Conservation Union-IUCN.

The project includes infrastructure to allow the export of liquified natural gas to Asia. (Photo courtesy Energy Department)

The environmentalists called attention to a list of environmental conditions for the Sakhalin project published in January 2003 by a coalition of 50 non governmental organizations with memberships in Russia, the United States, Europe, and Asia.

They believe the oil consortium has little interest in protecting the whales, and say it failed to satisfy environmental conditions of the first phase.

The environmentalists cite potential impacts on the whales such as disturbance from intense noise, contamination from oil and chemical spills, entanglement in cables, and physical habitat alteration such as that caused by dredging.

They informed Merrill of documentation from a joint team of scientists from the United States and Russia that indicated a number of whales appeared to have been displaced from their main feeding area while seismic surveys were conducted, along with evidence that worsened malnourishment that was observed in more than a quarter of the population in 2000.

Whether the Export Import Bank, which could consider the funding as early as next month, will be swayed by the environmentalists' concern is far from clear. The oil consortium has refuted criticism of its environmental record, and cites its own studies that the first phase of activity had minimal impact.

Consortium officials say they have spent millions of dollars on to monitor and mitigate the effects of its projects on the whales - and earmarked an additional $5 million this year for whale research.

Environmentalists say the consortium has not directly addressed their concerns, but the development of Sakhalin gas and oil reserves has strong support from business interests and the Russian government. The area around the 600 mile long island is estimated to contain as much as 50 billion barrels of oil and some 200 trillion cubic feet of natural gas.

Recent price spikes of natural gas have prompted increased interest in world LNG supplies, and the consortium also touts the $10 billion phase two of the Sakhalin project as the single largest foreign direct investment project in Russia.

The coalition who sent today's letter to the Export Import Bank include: the Center for Biological Diversity, Defenders of Wildlife, Earth Island Institute, Environmental Defense, Friends of the Earth, Greenpeace USA, International Fund for Animal Welfare, Natural Resources Defense Council, Pacific Environment, Sakhalin Environment Watch and World Wildlife.