Sunday, November 11, 2007

Disatrous Oil Spill Between Russia & Ukraine

Source: Bloomberg, "Russian Tanker Splits, Spills 1,300 Tons of Fuel Oil (Update4)"

On November 11th, a Russian tanker spilled 1,300 tons of fuel oil in the Kerch strait, between Russia and Ukraine, while at anchor in the strait. The initial tanker accident occurred at 3:35 a.m. on Noveember 11th. Fortunately, the crew of 13 escaped injury. The storm also sank two transporters, the Volnogorsk and the Nakhichevan, which were each carrying about 2,000 tons of sulfur.

As to the effects of the spill, the head of a Russian environmental group believes the spill will have serous consequences for the marine ecosystem due to the toxicity of the spilled oil. It may take several months to remove the oil, but the oil that sank will be “very hard” to clear.

Some analysts find concern in Russia’s “aging infrastructure and the effect of minimal investment in upgrading and maintaining it since the end of the Soviet Union.'' Further, “years of under investment don't just mean a low level of production growth in oil and gas, but the increased risk of transportation infrastructure failure.''

In comparison other large oil spills, The worst spill in U.S. history was from the Exxon Valdez, which leaked 37,000 tons of crude oil into the Prince William Sound, Alaska, in 1989. In addition, the tanker Erika spilt 20,000 tons of heavy fuel oil off the coast of France in 1999, and the Prestige leaked 63,000 tons of heavy fuel oil off northern Spain in 2002.

Questions for discussion: (1) What impact do you think the oil spill will have? (2) Are you concerned about Russia’s “aging infrastructure”?

1 comment:

KNYAZ' said...

Instead of oil and petrol, Russia must start sending to Ukraine PEA SOUP by gas pipeline. Then Ukrainians will understand the value of the GAS and the value of the RUSSIA.