President Putin to the rescue: hands (and pipelines) off Lake Baikal

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“President Putin has listened to the voice of the public. There is some hope that we’ll have a full-fledge civil society after all.” Alexei Kozmin, member of the Irkutsk regional legislature, made this comment to Nezavisimaya Gazeta regarding the news that the route of the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline will be changed.

Indeed, plans to have the oil pipeline run along Lake Baikal’s shores turned into a scandal of nationwide magnitude, if not more.

In vain did Transneft President Semyon Vainshtok declare, in an interview with Nezavisimaya Gazeta, that his company “cares just as much as the environmentalists do” about the fate of Lake Baikal, and that “since we would be held accountable for any accident, we will take unprecedented safety measures to guard against the possibility of any oil entering the lake.” Vainshtok said that “the political component of the controversy” isn’t a focus for Transneft: “For example, we might be told tomorrow to shift the pipeline route by 700 kilometers, in order to make the project less controversial. But mountain-climbers have never been known to build pipelines. There are steep mountains in that area, with an almost vertical 80-degree ascent. No amount of technology would be enough to build a pipeline there.”

But the financial aspect of the matter was undoubtedly the main argument: Vainshtok assured Nezavisimaya Gazeta that changing the route would cost at least $900 million. Or, as members of the Irkutsk regional legislature put it, “only $900 million more” than the basic project cost.

Vainshtok took strong exception to that wording: “There’s no ‘only’ about $900 million. If you take a $6 billion project and add $1 billion to its cost, that’s not ‘only’ a billion. The location in question has no roads or electricity powerlines. Those factors largely determine project feasibility.”

Then again, according to the Izvestia newspaper’s sources, the cost of building the pipeline (along the initially-planned route, close to Lake Baikal) will be even higher: $11.5 billion. Izvestia quotes Transneft staff as saying that any other options would raise fundamental doubts about the project’s profitability – although it would take at least 15-18 years to become profitable, even according to the initial plan.

Here are some more figures from Semyon Vainshtok: the transport tariff should be $38.80 per ton of oil, from Taishet to the Pacific. At present, transporting oil to China by rail costs $96 per ton.

These figures explain “why this project is facing such fierce resistance,” says Vainshtok: “If you try to tell me that the young people waving ‘No to the pipeline! Yes to Lake Baikal!’ banners are assembling on their own initiative, I won’t believe you. Some of them don’t even know where Lake Baikal is.”

But the rallies in defense of Lake Baikal continued. Kommersant reports that Yabloko and the Union of Right Forces (URF), the perennial opponents, joined forces to organize a protest rally outside the residence of presidential envoy Petr Latyshev, with eye-catching slogans like “Putin, drink oil!” and “Putin will go, but Lake Baikal will remain!”

Protestors in Irkutsk were even less restrained in their expressions: a demonstration drew thousands of people, who marched along city streets shouting “Vainshtok, enemy of the people!” and even “Don’t let them shit in Lake Baikal!”

Alexei Kozmin, legislator and leader of the Irkutsk region’s URF branch, told Kommersant: “If the president doesn’t listen to us, we don’t need such a president.”

Not surprisingly, as the Vremya Novostei newspaper points out, members of United Russia “prudently declined” to take part in the Irkutsk protest rally, “saying that they would take a number of measures separately from other political forces against plans to build the ESPO pipeline near Lake Baikal.”

In the meantime, a non-governmental organization called the Baikal Environmental Wave described Vainshtok’s assurances about the pipeline being completely safe as “blatant lies.” The Irkutsk-based group applied the same description to numerous statements by Transneft spokespeople to the effect that the protests against ESPO construction are “funded by foreign organizations that don’t want China to become stronger.”

Another rally in defense of Lake Baikal took place in Moscow, at Vorobievye Gory (Sparrow Hills). According to Kommersant, this rally also included comments like “if this oil pipeline is built, we should rally in the streets and call for Putin’s resignation.” There were suggestions that it’s time to hold Russia’s first environmental referendum, and that such an event would certainly be good for the image of its organizers.

The ground for a referendum has been prepared rather well: the prospect of an environmental disaster due to shortages of fresh water (Lake Baikal has 80% of natural fresh water resources) is being mentioned in the media more and more often in relation to the situation in China – in north-eastern China, directly adjacent to the Russian border.

“China’s population is growing,” says Novaya Gazeta. “But China’s water supplies are dwindling. Its deserts are expanding. The Chinese are taking measures against this, of course: saving water, planting trees. But these measures haven’t had much of an impact as yet.” According to those who have been there, Beijing “rather resembles Moscow when it’s shrouded in smoke from peat fires.” And any Beijing resident, says Novaya Gazeta, can “argue convincingly that daily showers are extremely bad for your skin.”

The reasons why northern China’s deserts are growing, says Novaya Gazeta, are deforestation and “the radical engineering measures taken to transform rivers and swamps, right up to drying them out in favor of intensive cultivation of every suitable patch of land.”

Novaya Gazeta reports that there’s already talk of evacuating some residents from the Lao and Yellow river basins: “That seems to be where most of China’s 30 million environmental refugees have come from.” The environmental disaster zone is steadily expanding to the north and north-east, with a direct impact on Siberia, since Russia “has already been placed in the position of a poor relation on the Irtysh River, where a new reservoir needs to be built because more water is being taken from the river’s upper reaches, in China.”

The Amur River seems to be next in line, where there are plans for joint Russian-Chinese construction of dams and reservoirs. For China, these might well become a reserve source of fresh water for its dehydrated regions.

As Novaya Gazeta points out, so far “we are maintaining the impression that we’ll keep on supplying China with natural resources until the very last.” Indeed, Russia still has plenty of water – look at Lake Baikal alone.

But environmentalists are worried – even though, as Kommersant puts it, “past experience shows that even if the greens march along Red Square in columns 20 people wide, they’d still be arrested.”

Meanwhile, “so many people stand to benefit politically from the decision to transfer the pipeline route that it’s hard to understand how Mr. Vainshtok has managed to hold his ground until now.”

The resolution of the Lake Baikal drama came as a surprise to everyone. It happened when President Putin met with Siberian regional leaders at the Kedrovyi center near the city of Tomsk.

Vremya Novostei reports that during the meeting with President Putin, Governor Alexander Tishanin of the Irkutsk region “cautiously mentioned that there is still some public concern in the region about the environmental consequences of building an oil pipeline so close to Lake Baikal.” Tishanin saw this in March when he participated in an anti-pipeline rally in March, “personally calling on the federal authorities to review the project’s geography.”

However, says Vremya Novostei, Tishanin immediately received a harsh reprimand from Leonid Potapov, governor of Buryatia: “If you’re so concerned about Lake Baikal, why don’t you shut down your pulp and paper mill! We haven’t had any such protest rallies in Buryatia, because we explain everything to the people! And besides, there are far too many political egos involved in this issue. Let’s stop all this and get on with building the pipeline.”

“While Potapov’s expressions seemed rather risky, he wasn’t actually risking anything,” says Kommersant correspondent Andrei Kolesnikov. “It was clear that the decision about building the pipeline had already been made.”

And then it suddenly turned out that President Putin had a different view of the situation. First, Putin asked Vainshtok whether it’s “technically possible to shift the route northward.” When the stunned Transneft chief replied (“You’ve stumped me”), Putin immediately said: “If you’re already wavering, that means it is possible.”

President Putin’s subsequent words, according to Vremya Novostei, sounded like a command: “The route should pass to the north of the area indicated at present. If there’s even one percent of danger there, we must think about that percentage.”

Vainshtok attempted to resist: “But you do understand that it would have to be a long way to the north…”

Putin’s answer to that was “worthy of being included in upper management textbooks,” says Vremya Novostei observer Arkady Dubov. Putin told Vainshtok: “I said, move it north. How far to the north – that makes no difference. In thinking of future generations, we need to rule out dangers completely, not just minimize them.”

In conclusion, says Kommersant, Putin “thanked Transneft personnel for the work they have done, and even expressed the hope that building this pipeline would make it possible to improve the environmental situation in the region.” That’s because transporting oil by rail along the lake-shore (even closer to Lake Baikal than the proposed pipeline route) is no less dangerous, while “the proposed pipeline construction solutions are verified and well-founded,” making it possible to rule out that danger: “The pipeline should be built to the north, beyond the water catchment area.”

And then there was the finale. Vremya Novostei reports that “throughout the remaining few minutes of the meeting, Mr. Vainshtok sat with his head in his hands.” Then he went out to face the press (a courageous decision, undoubtedly), and described Putin’s decision as “wonderful.”

With military-style severity, he added: “I’m a soldier, the President is the Commander-in-Chief, and his orders are not open to debate.”

Moreover, says Kommersant, Vainshtok even assured journalists that it still remains to be seen who benefits from this, since President Putin’s orders will shift the pipeline closer to the oil-fields, and this will reduce the company’s costs.

Journalists quoted Vainshtok’s own earlier statement back at him: if the pipeline takes the route demanded by the defenders of Lake Baikal, that would increase costs by $900 million and make the project unprofitable. Vainshtok replied: “We’re certain that the new route will be shorter than you say.”

Whatever that phrase might mean, Vremya Novostei notes that it signalled the end of the battle for Lake Baikal between the environmentalists and the state: “President Putin sided with the former.”

Then again, as Kommersant points out, the list of those who might claim to have saved Lake Baikal from Transneft chief Semyon Vainshtok seems to be “very long, and it’s rather strange to include Vladimir Putin on the list: Putin had plenty of time to intervene in the situation earlier – for example, before the anti-ESPO demonstrations in Irkutsk.”

All the same, as Izvestia says, this seems to be yet another instance of Putin using the infallible “good Tsar versus bad, greedy nobles” technique.

Naturally, Izvestia reminided its readers of the benefits monetization saga a year ago: widespread protests stopped after President Putin intervened, reprimanding ministers and (as citizens believe) forcing the government to increase payments.

Something similar has happened this time as well: with this decision, President Putin is forcing “the arrogant oil company” to reroute its pipeline, thus demonstrating once again who is really thinking of the public good.

What’s more, says Izvestia, Putin has managed to deprive the opposition of a valid pretext for unification: the masses were prepared to rally beneath the “Save Lake Baikal!” banner, and party bosses were planning even larger protests. But now President Putin has ruined everything. It’s a setback for presidential hopeful Mikhail Kasyanov, who had already started using the Lake Baikal issue.

Besides, says Kommersant, “let’s not forget German Chancellor Angela Merkel, with whom Vladimir Putin was also meeting in Tomsk.” Until now, Europe had been convinced that the ESPO project couldn’t possibly be changed.

Kommersant says: “Over the past two weeks, many senior state officials, including President Putin, have mentioned repeatedly that energy resources are sure to be redirected away from the West, which isn’t playing fair with us, towards the East, where at least Chinese President Hu Jintao is honest. The demonstrative correction of ESPO plans might well be a signal to Chancellor Merkel: we’re prepared to bargain, and the redirection of Russian oil to China is a negotiable issue.”

And environmental issues are popular in Germany, after all: “You don’t have to be Joschka Fischer to understand that Merkel cannot fail to approve of Putin’s concern for Lake Baikal.”

As Kommersant also points out, “the month or two that Transneft will need to draw a new route on the map” brings us up to the G8 summit in St. Petersburg.

And there will be a pretext to demonstrate to President George W. Bush that Russia is a country capable of reaching agreement: “If there’s something to agree upon – for example, that the ESPO project needs to be recalculated yet again. Maybe it isn’t profitable at all? Maybe China won’t even want to buy oil at the prices necessary to guarantee environmental safety for Transneft’s project?”

What a marvelous opportunity to reassure the West, which has been so concerned about diversifying energy suppliers in the name of reducing “energy dependence on Russia.”

In short, the environment is all very well – but politics takes precedence, as usua

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