Industry & Government: Co-operation to manage oil spill risks
Mr Archie Smith, CEO Oil Spill Response Limited
Abstract
There is a definitive increase in risk arising from the rise in Oil export trafficfrom Northern Russia, particularly Sakhalin, the Barents Sea and the Baltic
ports. The oil industry takes these risks very seriously and is committed todoing whatever it can to mitigate them. This will include preventative actions,improving preparedness and maximising the response capability. Industry
cannot do this effectively in isolation and must therefore engage the relevant
governments in ensuring that any action is co-ordinated and that interestedparties co-operate wherever possible. This keynote paper sets out some of
the issues arising, identifies areas of conflict and highlights some of therealities of government/industry co-operation.

Overview
stAs the World moves into 21 Century the dependence upon hydrocarbons as the main sourceof energy remains high. As production from older sources begins to diminish, oil companies
are carrying out new exploration into more remote and less accessible areas to meet theWorld’s needs.
One of the most major new areas of exploration, and now production, is Russia. Estimates ofRussia’s oil reserves vary from around 50 billion to 150 billion barrels but are generally
accepted to be circa 60 billion barrels. The peak daily output for 2004 was approaching 9.3
million barrels. It is now the second largest oil-producing country after Saudi Arabia(http://www.eia.doe.gov/emeu/cabs/russia.html).
The majority of Russia’s reserves arelocated between the Ural Mountains and the Central Siberian Plateau. Almost a quarter ofthe reserves (14 billion barrels) is located on Sakhalin Island on the East Coast of Russia.
Moving into more remote regions can have many difficulties and associated risks. There may
be very limited infrastructures either due to challenging topography or a lack of investment.
The availability of a skilled local labour force may be limited due to the remoteness andinhospitable aspects of the region. The terrain and/or climates may be strenuous to operate
within, for example, extreme heat or cold, mountainous or marshy terrain. Such regions areoften so remote that the distance to transport to export markets can be almost prohibitive.
Each of these factors increases the difficulty for an oil company to operate in such a region.
This in turn increases the risk of accidents and spills and can hinder the effective
recovery/response to such an event.
Russia suffers many of these difficult circumstances. There is snow cover for up to six monthsof the year across many regions with temperatures dropping as low as –45oC. Much of theground is frozen solid for a large proportion of the year. The vast scale of the region meanthat there are large, uninhabited areas through which oil exports pass.

RiskTransportation
Oil exported from Russian fields is distributed globally (see figure 1).
CIS* Crude oil export destinations, 2003

Other Central Europe
16%

Greece4%
Poland9%

Other West Europe
4%

Italy
13%

Other
5%

Scandinavia
4%
Netherlands
6%

China
2%
Japan
0%

Spain
4%

US
4% Turkey
2%
France9%Germany
18%*CIS refers to all the countriesof the former Soviet Union excluding
Estonia, Latvia and Lithuania
Figure 1 – Crude oil exports destinations, 2003 (adapted from http://www.eia.doe.gov/emeu/cabs/russia.html)

There are three main methods of transportation – pipeline, river barge and railway (see figure2).
Oil export methods - Russia (Jan-Sep 2004)

Railway33%

Pipeline
60%

Barge
7%

Figure 2 – Oil export methods – Russia, Jan-Sep 2004 (adapted from http://www.eia.doe.gov/emeu/cabs/russia.html)

Most of these methods also involve the use of for final trans-shipment. The methods used toexport oil from Russia depend upon the means available, geographical location of the field
and the final destination of the oil.

i)Pipelines

Approximately 60% of oil produced in Russia is exported by pipeline. This figure is onlyrestricted by the capacity of the pipeline. Pipelines pass through very remote and often
uninhabited areas of Russia. Russian pipeline terminals are located on the Baltic Sea atPrimorsk (Russia) Ventspils and Butinge(Lithuania), where it is transferred to tankers for thejourney to its destination. This route takes the tankers through the Baltic Sea, North Sea andEnglish Channel, a very constricted and busy shipping lane increasing the collision risk.
South East Russian terminals are located at Supsa in Georgia, Yuzhnaya Ozereika andNovorossiisk in Russia and and Ceyhan in Turkey. Vessels loading at Supsa,Yuzhnaya
Ozereika and Novorossiisk pass through the Black Sea and then into the Mediterranean andvessels from Ceyhan pass only through the Mediterranean.
The Supsa/Yuzhnaya
Ozereika/Novorossiisk route takes vessels through the very of the narrow shipping channelsof the Bosphorus and Dardanelles increasing the risk of collisions or groundings (see figure 3).

Figure 3 – Shipping route from Supsa oil terminal, Georgia to export markets

Each of these routes pass through the Mediterranean, which is a very busy shipping route
increasing the risk of a collision. The Mediterranean is an enclosed Sea with a highdependance upon its beaches to attract tourism thus any pollution incident in this area would
have major impacts.
There is currently work being carried out to develop oil terminals at Arkhangelsk andMurmansk to provide ice-free routes through which to export from the North West of Russia.
This would reduce the risk of ice-damage to vessel hulls but there is some perception that theshipping route would put Norwegian coastlines at risk. This route, however, has very little
shipping traffic so the risk of a collision is very low.
The main oil fields in the East of Russia are found on Sakhalin Island. The pipeline routes on
the Island run from Northern fields to the terminals in the South (see figure 4).

Figure 4 – map showing location of pipelines on Sakhalin Island(http://www.hydrocarbons-technology.com/projects/sakhalin2/sakhalin26.html)

From the southern terminals oil is shipped to East Asian destinations via the Sea of Japanand East China Sea which is one of the most heavily congested shipping routes anywhere in
the World. Oil is also exported from Sakhalin to the US. Any tankers on this route wouldcross the Sea of Okhotsk and pass between the Kuril Islands. The Kuril Islands are a chain of
volcanic islands along the edge of the Pacific rim (see figure 5).

Figure 5 – map of the Kuril Islands, Sea of Okhotsk(http://www.askasia.org/image/maps/kuril1.htm)

The passages are narrow and treacherous for large vessels, greatly increasing the risk of agrounding. These islands are currently under consideration for World Heritage status so an oil
spill in this region would have a major impact upon the wildlife and habitats surrounding theislands (http://www.greenpeace.org/russia_en/campaigns/intro?campaign_id=154523).
ii)

River transportation

Oil that is produced from central Russian fields is transported to the coast by river tankers orbarges during summer months but only if there is no pipeline nearby and access to a river ispractical. The Volga is heavily used to move around half of all river freight within Russia(http://www.volgawriter.com/VW%20Volga%20River.htm) and is being used more frequently
to move oil cargoes. The Volga empties into the Caspian Sea but there are canal links to theBaltic Sea to permit shipping traffic to gain access to the Mediterranean to reach the export
markets. Tankers and barges using these routes are, again, at higher risk of collision due tothe busy and narrow shipping channels.
iii)

Railway

Carriage of oil by rail tankers from production sites to loading terminals has increased greatly
in recent years. This has been necessary to overcome the limited capacity of the pipeline
stnetwork. From 1 January 2005 7 million tonnes of Lukoil’s oil will be transported by rail toVysotsk terminal per annum (http://www.eatu.org/eng/newsweek.php#doc7407). Ilinka
terminal in Astrakhan receives up to one million tonnes of oil per annum from rail tankers.
Each train is made of up to 50 tankers. Once at the terminal the oil is loaded onto marine
vessels for trans-shipment (http://www.lukoil.com/static_6_5id_256_.html). Rail transportationis also used to export oil directly to international destinations. Lukoil will use rail links toexport 3 million tonnes of oil to China in 2005
(http://www.eatu.org/eng/newsweek.php#doc7407). Rail routes take oil through some of theremotest areas of Russia thus if there was a train incident it may take a substantial amount oftime to get response equipment and personnel to site.

Oil Industry response to risks
The Oil Industry takes these risks very seriously and is committed to doing whatever it can tomitigate them. This will include preventative actions, improving preparedness and maximising
the response capability. The risks and problems associated with oil spills, however, cannot
be diminished solely through government legislation either. Neither party can work effectively
in isolation and must therefore engage one another to ensure that any action is co-ordinatedand that interested parties co-operate wherever possible. There are many methods throughwhich Industry and Government can co-operate to mitigate the impact of a spill (see figure 6).

Figure 6 – Methods of preparedness, prevention and response

The Oil Industry has worked hard in the region to overcome risks of spills from operational
processes at all stages of the oil chain i.e. from sources to destination. As mentioned above,these measures take three forms; prevention, preparedness and response but none of thesecan work in isolation – they must all be applied together at all stages.
i)Prevention

The best method through which to mitigate risk is to prevent it wherever practically possible.
Major oil companies pride themselves on the quality of their engineering and continually finetuning and improving their designs to help achieve this. Prevention methods involve
modifications to structures (‘hard’ methods) or processes (‘soft’ methods) to reduce thechance of spills.
Engineering - An example of an engineering modification is the use of specialist ice-classvessels that break through ice, stern-ahead thus minimising the risk of damage to their cargotanks. Such vessels are used on routes that become ice-bound for long periods of the year
for example, routes from the Baltic and North Seas to Finland(http://www.fortum.com/news_section_item.asp?path=14022;25730;551;14466).
Anotherexample to overcome ice issues is to use subsea pipelines that run from the source to afloating storage and offloading unit (FSO) in an area that does not become ice-bound. This
prevents the need for tankers to enter hazardous water, avoiding damage and thus accidental
spillage (http://www.sakhalinenergy.com/common/cmn_sakhalin.asp). The Oil Industry alsouses very sensitive leak detection systems in the pipelines so that even the smallest change
in pressure is seen as well as the location of the pressure drop. This allows operators topinpoint the leak and therefore react more quickly and efficiently on a pipeline that may be
hundreds to thousands of kilometres long.
Processes – An example of process modification to minimise spill risk is to ensure thatstandardised systems are utilised and enforced in all operational activities, for example, theuse of risk assessment forms before any new activity can take place. This method helps to
identify and deal with risks before they occur. Process engineering, weather mapping, route
planning are also good examples of preventative processes and show that the quality of a
project shows from its conception through the design phase and into operation. Government
and Industry must work together to continue to improve all these aspects.
ii)

PreparednessThe requirement for ‘preparedness’ was first formally laid out in the International Convention
on Oil Pollution Preparedness, Response and Co-operation, 1990 (OPRC). Any parties
signing up to this agreement must adhere to the following (table 1):
Table 1 - International Convention on Oil Pollution Preparedness, Response and Cooperation, 1990 (OPRC)
Parties to the OPRC convention are required to establish measures for dealing with
pollution incidents, either nationally or in co-operation with other countries.
Ships are required to carry a shipboard oil pollution emergency plan, the to be
developed by IMO. Operators of offshore units under the jurisdiction of Parties are also
required to have oil pollution emergency plans or similar arrangements which must beco-ordinated with national systems for responding promptly and effectively to oil
pollution incidents.
Ships are required to report incidents of pollution to coastal authorities and theconvention details the actions that are then to be taken. The convention calls for theestablishment of stockpiles of oil spill combating equipment, the holding of oil spill
combating exercises and the development of detailed plans for dealing with pollution
incidents.
Parties to the convention are required to provide assistance to others in the event of apollution emergency and provision is made for the reimbursement of any assistanceprovided.
The Convention provides for IMO to play an important co-ordinating role.
(http://www.imo.org/Conventions/mainframe.asp?topic_id=258&doc_id=682)

Industry spends a lot of time on preparedness issues including environmental risk
assessments, contingency planning, training and exercising.
There is a common
misconception that exercises must be very large and costly, however, even a table-top
exercise can create many lessons-learned for the participants. Governments should workwith Industry on these issues as they are already well established and have been proven towork again and again. Trying to compete only causes more problems. There should be agood understanding of issues from both parties.
iii)

Response

Industry has used an effective response structure for many years to maximum effectiveness(see figure 7). This method is efficient and effective so should continue to be used but always
taking into account and adapting it to local levels of risk.

Figure 7 – the Oil Industry tiered response concept

Tiers 1 and 2 should be adjusted to meet the requirements of the region. Tier 3 responseorganisations are used when the regional capability has been exceeded.
Spill response methods must be relevant to the region and practical, for example,
governments cannot legislate for spilled oil to be completely recovered within 24-hours as thisis not only impractical but impossible. Much of Russia’s coastline is ice-bound for long
periods of the year making conventional response methods ineffective. Many systems forrecovering oil from under ice have been proposed but as yet nothing has been confirmedsuccessful. It must be accepted that offshore recovery of oil is generally only 10% effective
and that the equipment necessary for that type of operation is hugely expensive for example
response vessels, large skimmers and ocean booms. An alternative method is to use
dispersants. These are, however, only effective on medium to light oils but the cold waters to
the north and east of Russia could cause spilled oil viscosity to increase too high fordispersants to be a practicable option. In most situations the oil will end up impacting theshoreline. Equipment for local stockpiles should, therefore, comprise a greater proportion of
more cost-effective shoreline equipment that can be rapidly deployed in the event of a spill.
The majority of the environment at risk from spills in Russia is inland. These areas also suffer
being frozen for long periods of time so if a spill occurs in some cases it can only berecovered during the summer months. Local response personnel must be trained intechniques specific to inland response.
Co-operation
As it has already been mentioned above, any effort to reduce the risk of spills throughprevention, preparedness and response techniques are only fully effective if all stakeholders
are working in co-operation with one another. This is essential between the oil industry andgovernments. If parties work in isolation there is no synergy in the event of a spill,exacerbating the problems and issues. Regional working groups must be formed comprising
oil industry and local/national governments from each neighbouring country to work together
and draw on each other’s knowledge and expertise. The International Petroleum IndustryConservation Association (IPIECA) and the International Maritime Organisation (IMO) jointly
run the Global Initiative programme to help industry and governments to set such groups up.
This is currently being carried out successfully in many regions, for example WACAF (Westand Central Africa), NOWPAP (North West Pacific Action Plan) and OSPRI (Oil Spill
Preparedness Regional Initiative - covering the Black and Caspian Seas and Central Eurasia).
Groups like these make joint decisions on best practices relevant to the region through writing
National Plans, exercising and training together and deciding upon the level of response
capability required. Joint incident command structures are formed, defining each party’s role

during a spill. This prevents conflict in spill situations. Working in this way also prevents
unnecessary expenditure on expensive response equipment. Regional or ‘Tier 2’ stockpiles
are formed and funded by both parties. Alternatively, mutual aid relationships can be formed
whereby each member of the group can call upon the resources of other members.
Summary
The development of newer, more remote oil fields to maintain the current level of hydrocarbon
consumption poses a high level of environmental risk. Risks arise at each stage of the oilchain from production through transportation to refining and the end user. The oil industry
aims to mitigate these risks through adapting engineering and systems to the physical andpolitical idiosyncrasies of each region. Success in minimising the risks can only be achieved
if a co-operative approach is taken using the opinions of all stakeholders at each stage of thedecision making. This is best achieved through the formation of regional forums and working
groups. Spill risks cannot be prevented through legislation – plans must be practical andrealistic. The Oil Industry has spent many years investing and researching all areas tomitigate risk – Governments can gain maximum benefit from this experience and should workwith the Industry and not against it.

References
Websites and access date:
http://www.eia.doe.gov/emeu/cabs/russia.html
11 February 2005
http://www.eia.doe.gov/emeu/cabs/russia.html
11 February 2005
http://www.hydrocarbons-technology.com/projects/sakhalin2/sakhalin26.html
14 February 2005
http://www.greenpeace.org/russia_en/campaigns/intro?campaign_id=154523
14 February 2005
http://www.volgawriter.com/VW%20Volga%20River.htm
14 February 2005
http://www.eatu.org/eng/newsweek.php#doc7407
15 February 2005
http://www.lukoil.com/static_6_5id_256_.html)
16 February 2005
http://www.fortum.com/news_section_item.asp?path=14022;25730;551;14466
16 February 2005
http://www.sakhalinenergy.com/common/cmn_sakhalin.asp)
16 February 2005
(http://www.imo.org/Conventions/mainframe.asp?topic_id=258&doc_id=682)
17 February 2005