Reuters: Shell Sakhalin Whale Risks Need More Study – Report: "An international consortium should consider suspending a huge energy project off Russia's Sakhalin island pending fuller studies on saving a rare whale species, a key environmental panel said on Wednesday": “For Shell, still struggling to rebuild investor confidence after admitting last year it had exaggerated its oil reserves, the project is key to increasing output and replacing reserves.” (ShellNews.net) Posted 17 Feb 05

By Richard Waddington and Robert Evans

GENEVA (Reuters) - An international consortium should consider suspending a huge energy project off Russia's Sakhalin island pending fuller studies on saving a rare whale species, a key environmental panel said on Wednesday.

In a cautiously worded report, the expert team -- set up by the IUCN-World Conservation Union at the request of the Royal Dutch/Shell-led Sakhalin Energy Investment Co. (SEIC) -- said more information on the risk to the whales was needed.

"Given the potential effects...the most precautionary approach would be to suspend present operations and delay further development of the oil and gas reserves in the vicinity of the gray whale feeding grounds," the report declared.

But if this proved impossible "for some reason," then SEIC should err on the side of caution when it came to assessing the risks, particularly to female whales.

The report was commissioned last year after the International Whaling Commission warned energy exploration could kill off the 100 or so remaining gray whales on the oil-rich shelf near Russia's Pacific coast.

Even if one female whale over and above the recent average was lost a year, the species could be driven quickly to extinction, said the panel of 13 international marine scientists.

Speaking in Moscow, Natural Resources Minister Yury Trutnyev said Russia must strengthen environmental requirements for all offshore energy projects. "I can guarantee that nothing will threaten the existence of the gray whales," he added.

The Sakhalin oil fields hold 1.2 billion barrels of crude oil and 500 billion cubic meters of natural gas -- among the largest reserves under development in the world.

INVESTOR CONFIDENCE

For Shell, still struggling to rebuild investor confidence after admitting last year it had exaggerated its oil reserves, the project is key to increasing output and replacing reserves.

SEIC welcomed the report and said it was confident it could develop an "acceptable way forward" for the $11.5 billion project taking account of the panel recommendations.

In a statement, it said it would look at alternative pipeline routes but made no comment on possible suspension.

Environmentalist group WWF welcomed the panel's findings and urged the European Bank for Reconstruction and Development (EBRD), a key financial backer, to halt funding for the project.

"Investors should think carefully about backing a project that puts shareholder value above the survival of an endangered species," said Igor Chestin, director of WWF-Russia.

While applauding SEIC's substantial investment in whale research, the panel said there were "important gaps" in information provided by the group, which left "considerable uncertainty" on whether risks had been properly assessed.

The consortium, which also includes Japan's Mitsui and Mitsubishi Corp, had been over-optimistic in weighing the risk to whales from noise during the construction phase, it added.

And because insufficient detail was provided, it was not clear if measures to avoid collisions between ships and whales would work, the panel said. Only "relatively superficial consideration" had been given to the threat of disruption to the whales' prime food supply.

The experts said one of three pipeline routes proposed by SEIC, the most southerly and longest, offered the best chance of avoiding damage to the whales' habitat during construction. But even that posed a threat from oil spills and pipe ruptures.

http://www.reuters.com/newsArticle.jhtml?type=scienceNews&storyID=7650402