Interdisciplinary Studies on "Economic Development and the Environment"
in the Northeast Asian Sea Region*

Abstract
Preparations for the Sakhalin-I and Sakhalin-II projects based on the Production Sharing Contract have been aimed at developing oil and gas reserves on the continental shelf in the Okhotsk Sea, northeast of Sakhalin Island. 1999 will mark the beginning of the long-term oil and gas development projects starting with crude oil production. As the development plans become realized, the trade-off between sustainable economic development and environmental protection has become a primary issue. Severe marine conditions, especially during winter, when ice floes cover the sea, increases the chances of causing an oil spill. If an oil spill were to occur, fishing and tourism in the coastal regions of the Okhotsk Sea would be severely damaged. Therefore, it is necessary to scientifically examine the region's environmental and meteorological conditions and to examine appropriate measures to deal with marine pollution caused by an oil spill.
Introduction

A series of preparations has been under way aimed at developing large-scale oil and gas reserves on the continental shelf in the Okhotsk Sea, northeast of Sakhalin Island for the next century. As the development plans become reality, the trade-off between sustainable economic development and environmental protection has become a primary issue.

Scientific studies on marine conditions in the Sea of Okhotsk have only begun recently and many phenomena still remain unexplained. How oil and gas development in the area will affect the environment has not been explored at all. Therefore, this research project was designed to examine issues associated with oil and gas development on the Sakhalin continental shelf from the specialists' viewpoint in the fields of natural and social science.

First, this research analyzed the progress of oil and gas development off the coast of Sakhalin. Secondly, the effects and possible solutions for dealing with an oil spill were explored: how the oil would spread; how marine pollution could be minimized; and how the spilled oil under ice floes could be recovered. The research then focused on how shellfish would be affected by oil and gas development due to an increase in mud in seawater, since the Okhotsk Sea off the coast of Hokkaido is rich in scallops.

Oil and gas development on the Sakhalin continental shelf has provided Hokkaido's local industry with opportunities to participate in the project. On the other hand, if an oil spill were to occur, fishing and tourism in the coastal regions of the Okhotsk Sea will be severely damaged. Overemphasizing anticipated risks without appropriate information would make local residents more anxious and nervous than necessary. In order to facilitate communication with the public, during the course of the research, we held an on-the-sea seminar on the Oshoro Maru, a training ship owned by the Faculty of Fisheries, Hokkaido University, and explored issues related to economic development and the environment. Discussing the matters with the public achieved some results.

Takashi Murakami, a professor from the Slavic Research Center, an energy economics specialist, led this research project. Other participants included: Professor Fumikazu Yoshida from the Faculty of Economics, an environmental economics specialist; Professor Takemichi Hatakeyama from the Faculty of Law, an environmental law specialist; Professor Hiromitsu Kitagawa and Professor Hiroshi Saeki from the Graduate School of Engineering; Professor Masaaki Aota and Professor Masaaki Wakatsuchi from the Institute of Low Temperature Science; Professor Etsuo Yamamura from the Graduate School of Environmental Science; and Professor Shigeru Nakao from the Faculty of Fisheries.

This paper first describes the present situation of oil and gas development on the Sakhalin continental shelf. It then presents data on the ice floes' trajectory in the area and examines methods to recover spilled oil under floating ice. Finally it explores the effects of oil and gas development over shellfish in the sea region.

1. Present Status of Oil and Gas Development on the Sakhalin Continental Shelf

As Figure 1 shows, oil and gas development projects are planned in six sections on the Sakhalin continental shelf. Among the six projects, Sakhalin-I and Sakhalin-II are at the development stage. Contracts were signed between the Russian Federation and investors under the Production Sharing Contract (PSC) enacted by Russian legislation. The PSC, which has been in force since 1996, requires an individual review by the Lower House before proceeding with the development. An exceptional measure was applied to Sakhalin-I and Sakhalin-II, since the contracts for these projects were signed before the PSC was enacted. Sakhalin-III, in which western investors are expected to participate, has already acquired parliamentary approval. Sakhalin-IV, V, and VI are still at the planning stage, and require approvals from the reviewing committee of the Lower House in order to move to the development stage.

These oil and gas developments off the coast of Sakhalin will be conducted on a long-term basis. Furthermore, a large amount of resources are reserved off the coast of Magadan Oblast, in the northern part of the Okhotsk Sea. Developing resources in these areas and the effects on the marine environment are of importance to the coastal regions and necessitate research of a long duration. 1999 will mark the beginning of the long-term oil and gas development projects with crude oil production starting in the Sakhalin-II area.

1-1. Sakhalin-II Project

The Sakhalin-II project includes the development of the Lunskoye and Piltun-Astokhskoye fields which were discovered in 1984 and 1986, respectively, in the northeastern part of the Sakhalin continental shelf by the former Soviet Union. The Lunskoye Field, which is rich in gas resources, has 379 billion cubic meters of estimated gas reserves, 31 million tons of gas condensate, and 60 million barrels of oil. The Piltun-Astokhskoye Field has been estimated to hold 690 million barrels of oil, 6 million tons of gas condensate, and 76 billion cubic meters of natural gas.

The Sakhalin-II investors have established a consortium company, Sakhalin Energy Investment Co. Ltd., based in Bermuda. Investors include Marathon Oil Co. (from the United States, 37.5% investment share), Royal Dutch Shell (25%), Mitsui & Co., (25%), and Mitsubishi Corp. (12.5%). The total investment will amount to 10 billion dollars.

An official agreement for the project became effective on June 19, 1996, and full-scale preparations have begun. The first stage of Sakhalin-II is to run until 1999, with the completion of a platform, Molikpaq, to be built in 1998 in the Astokhskoye Field. For five years from the year 1999, oil production will be conducted for six months a year when there are no ice floes in the Okhotsk Sea. Oil will be transferred from the Molikpaq to a storage tanker through pipelines on the bottom of the sea, two kilometers beneath the platform. Once every six days, a shuttle tanker will carry the oil from the storage tanker to the market. By the year 2005 when full-scale gas and oil production is planned, two platforms in the Piltun-Astokhskoye Field and one platform in the Lunskoye Field are scheduled for completion. At its peak, oil production is anticipated to reach 9 million tons per year, and the natural gas production of 15 billion cubic meters (1.5 billion cubic meters per day or 6 million tons per year on the LNG basis) is expected.

1-2. Sakhalin-I Project

The beginning of the Sakhalin-I project goes back to 1975, twenty three years ago. In that year, the former Soviet Union and Japan signed a general agreement on oil and gas development on the Sakhalin continental shelf. After experiencing the 1973 oil shock, Japan began to explore means of diversifying its sources of energy supplies and showed an acute interest in resource development in Siberia. The Soviet Union, on the other hand, was in need of Western technology for offshore oil and gas development. Both sides' saw mutual advantages and the project came into reality. The Chajvo and the Odoptu fields were discovered in the northeastern part of the Sakhalin continental shelf. However, the relatively small scale of reserves and the severe marine conditions in the area made development costly. The global market price of oil had to be at least 24 dollars per barrel to justify the project. In the 1980s, international oil prices declined, which halted the project. During the standstill period, the Soviet Union independently continued to explore oil and gas in the area.

It was the Sakhalin-II project that led to a reevaluation of Sakhalin-I. Exxon decided to participate in Sakhalin-I as a new investor. The Arkutun-Daginskoye Field, which had been discovered by the Soviet Union, was added as another development site. Commencement for the project was declared on June 10, 1996, and a final study has been under way. The Arkutun-Daginskoye Field potentially holds a large amount of estimated reserves; 1.94 billion barrels of oil, 26 million tons of gas condensate, and 287 billion cubic meters of natural gas. Compared to this, the Chajvo and the Odoptu fields are relatively small. Chajvo has 130 million barrels of oil, 6 million tons of gas condensate, and 97 billion cubic meters of natural gas. The Odoptu Field is estimated to hold 220 million barrels of oil, 1 million tons of gas condensate, and 41 billions cubic meters of natural gas.

Two major differences between the Sakhalin-I and Sakhalin-II projects are that Sakhalin-I is not being run by a consortium company as Sakhalin-II is, and that Russian parties are participating in Sakhalin-I as investors. Financial resources for the project come from SODECO JAPAN (30%), EXXON from the United States (30%), Sakhalinmorneftegas from Russia (23%), and Rosneftj, another Russian investor (17%). In 1998, in the first stage of development, two wells will be drilled for evaluation. The results will determine if the project will be pursued further. Oil production is planned to start in 2003, at the second stage of the development plan, and natural gas production will commence in 2005. At its peak, it is expected that 24 million tons of oil and 20 billion cubic meters of natural gas will be produced yearly.

1-3. Sakhalin-III Project

The Sakhalin-III project covers four blocs of areas excluding the four fields covered by the above mentioned two projects. The bidding results were announced in December 1993. Exxon tendered for Bloc-1 and Bloc-2, and the Mobile-Texaco group acquired a bid for Bloc-4. There was no bidder for Bloc-3. The project is now waiting for the necessary legislation and tax deals to be prepared. Rosneftj and Sakhalinmorneftegas have decided to take part in Bloc-4 as investors.

2. Drift Ice in the Sea of Okhotsk

How ice floes, formed off the northeastern coast of Sakhalin Island, drift in the oil and gas development fields is of great importance to the coastal regions of the Okhotsk Sea. If an oil spill accident were to occur, ice floes would bring the oil to the coastal areas. The trajectory of drift ice in the area has been observed first-hand from the shore, ships and planes, or with short-term radar and satellite observation. However, a long-term study had never been conducted.

During the period from November 1993 to July 1994, a research group led by Professor Masaaki Aota of the Sea Ice Research Laboratory, Hokkaido University followed the trajectory of floating ice in the western part of the Okhotsk Sea. This research, utilizing four satellite-linked buoys, was conducted with cooperation from the Research Institute of Sakhalin Oil and Gas Company Ltd. and NHK (Nihon Hoso Kyokai: Japan Broadcasting Association).

The first buoy, named Amur was released on November 9, 1993, at the beginning of the ice formation season from the north of the Amur River's mouth, north of Mamiya Strait. The second buoy, the Shantar, was launched on November 23, 1993 on the southern coast off Shantar Island located at the northwest border of the Sea of Okhotsk. Both buoys reached the coast of Moskarivo in Sakhalin Bay and terminated their transmission signals.

The Odopt, the third buoy, was placed on an ice plate in the Odoptu Field, 40 km away from the shore northeast of Sakhalin on January 9, 1994. The fourth buoy, the Chaivo was placed on an ice plate on January 11, 1994, 40 km away from the shore in the Chajvo Field located 120km south of the Odoptu Field. The two ice plates were about 60cm in thickness.

The two buoys started to move soon after they were placed on the ice plates, and continued to float alongside the east coast of Sakhalin until they crossed 47 North Latitude off the eastern coast of South Sakhalin. The Odopt passed 47 degree mark on February 3, passed 35 km north of Shiiretoko Cape, floated southeast to reach the Okhotsk Sea side of Kunashiri Island on February 15 and stayed there until April 30 when it stopped its transmission signals. The Chaivo departed from the ice field and floated eastward, then moved towards the southeast while turning clockwise until it reached 50 km north of Etorofu Island on February 7. It headed east from March 7, reached Etorofu Strait on March 12, and started to drift in the Pacific Ocean on March 15. It then floated southwest in accordance with the Kurile Current, passed Erimo Cape in the middle of April, and started to head northwest. It approached the coast of Shizunai, Hokkaido, stayed near the coast until July 22 and stopped transmitting signals.

The above observation shows that the sea ice formed off the north-eastern coast of Sakhalin floats southwards alongside the south-eastern coast of Sakhalin and reaches off the coast of Hokkaido. The average speed of drift ice in this sea area is 39 cm per second, and a coefficient of wind force and a deflection angle were 2.6 percent and 20 degrees left, respectively. If an oil spill accident were to occur, oil would probably hit the coast of Hokkaido.

3. Recovery Methods for Spilled Oil under Ice Floes

In a severe marine environment such as the Sea of Okhotsk, once crude oil is spilled into water covered by ice floes, volatilization, degeneration and degradation of crude oil tends to occur slowly. On the other hand, the toxicity of volatile ingredients is preserved, and oil can become trapped within drift ice, which becomes an additional source of huge disasters. Therefore, it is important to recover spilled oil as quickly as possible.

One recovery method, suggested in Norway, involves drilling into ice floes, pumping up spilled oil together with seawater, and separating it later. It is difficult to apply this method in the Okhotsk Sea where the size of ice floes varies and their thickness is uneven. Professor Hiroshi Saeki from the Graduate School of Engineering, Hokkaido University, a member of our research project, is developing a new recovery method. In his method, ice floes and spilled oil are to be separated, and ice floes are pulled away by icebreakers so that spilled oil will stay behind to be recovered.

In order to develop this method, Professor Saeki has conducted two series of experiments. First, he explored how fast ice floes have to be pulled away in order for ice and oil to become separated. In his second series of experiments, a compressor sent air under ice plates to form a layer of air between ice and oil. The air layer was assumed to facilitate the detachment of ice plates and spilled oil and to prevent oil from becoming trapped in ice floes. In these experiments, ice plates were placed on reposed seawater and oil was inserted underneath the ice. Since crude oil has toxic ingredients and its chemical ingredients change over time, gear oil with a grade of 32 on the ISO viscosity index was used as a safer and more stable alternative.

These experiments have shown that oil separates from ice plates when the ice was pulled at a speed faster than thirteen centimeters per second. It was also revealed that the greater the friction coefficient is, the more difficult it becomes to separate the ice from the oil. Moreover, if an air layer was inserted between ice and materials trapped under ice, the materials separated at a much lower speed; lower than two to three centimeters per second. This suggests that it is possible to separate ice floes and trapped oil by pulling the edges of an ice boom at the speed of one knot. An even air layer under the ice also promotes separating ice and oil when the thickness of ice plates is uneven. If volatile ingredients evaporate, they will be trapped in the air layer, and toxic ingredients in the trapped oil will be reduced.

4. Oil and Gas Development and Marine Resources

The Sea of Okhotsk is rich in shellfish, especially in scallops. The development of oil and gas resources in the area could be potentially harmful for marine life by increasing the mud content in the seawater. There was a case in the United States where surf clams lost their market values once oil development started. A trial oil excavation caused an increase of mud in the seawater, which resulted in retarding the growth of American surf clams.

In August 1992, a huge rainstorm, said to come only once every 50 to 100 years, hit Tomakomai, Hokkaido, and brought a large amount of soil via the Mukawa River into the coastal regions. The mud content in the seawater increased to a level higher than that caused by oil and gas development. Professor Shigeru Nakao from the Faculty of Fisheries, Hokkaido University, observed that the high level of mud in the water decreased scallops' growth rate.

In order to reveal how the mud increase in the seawater affected bivalves, Professor Nakao conducted experiments on scallops and surf clams observing their eating and digestion with different levels of mud in the seawater. His observations revealed that bivalves filter both suspended mud particles and food. However, they do not consume the mud particles. Before the mud particles could reach the bivalves' mouth, the particles became surrounded by mucus and were exhaled. These mucus-covered particles are called pseudofeces. When the seawater's mud content increased, the bivalves' food consumption rate decreased and their pseudofeces production rate increased. This decrease in energy input and the energy demand required to produce the mucus surrounding the mud particles resulted in a decreased growth rate and malnutrition.

It has been revealed in other observations that not only shellfish but also other marine resources such as salmon are affected by an increase of mud in the seawater. If oil and gas development increases the muddiness level of the seawater, it could adversely affect the marine environment.

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* Originally printed in Special Reports on the Regional Studies of North-East Eurasia and North Pacific in Hokkaido University, 1999:5-11, edited by the Ad hoc Committee of the Regional Studies of North-East Eurasia and North Pacific, Hokkaido University.

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