Rosneft, the Russian oil company worth an estimated $60 billion, is headquartered in a palace across the Moscow River from the Kremlin. Poised to become the face of Russia's oil country, Rosneft, is situated on a sprawling, inhospitable zone that experts say represents the world's worst ecological oil catastrophe.
Environmentalists estimate at least 1 percent of Russia's annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world's largest oil producer, responsible for 13 percent of global output.
Russian state-funded research shows 10-15 percent of Russian oil leakage enters rivers; and a 2010 report commissioned by the Natural Resources Ministry shows nearly 500,000 tons slips into northern Russian rivers every year and flow into the Arctic.
The oil seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters.
It's part of a legacy of environmental tragedy that has plagued Russia and the countries of its former Soviet empire for decades, from the nuclear horrors of Chernobyl in Ukraine to lethal chemical waste in the Russian city of Dzerzhinsk, and paper mill pollution seeping into Siberia's Lake Baikal – which holds one-fifth of the world's supply of fresh water.
Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But, they are more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined, they spill far more than anywhere else in the world, scientists say.
"Oil and oil products get spilled literally every day," said Dr. Grigory Barenboim, senior researcher at the Russian Academy of Sciences' Institute of Water Problems.
Greenpeace estimates that at least 5 million tons leak every year in a country producing about 500 million tons a year. Dr. Irina Ivshina, of the government-financed Institute of the Environment and Genetics of Microorganisms, supports the 5 million ton estimate, as does the World Wildlife Fund.
Billions of dollars being spent developing Russia’s Arctic shelf for offshore drilling is a massive environmental worry. The risks of drilling in the Arctic are extremely high, and there are thousands of miles of leaky pipelines to build across some of the world’s most pristine environments. If you thought Deepwater Horizon was bad, cleaning up a spill in the Arctic is unimaginably more difficult.
A report by The Russian Economic Development Ministry estimated spills at up to 20 million tons per year – that estimate is considered conservative. That estimate appears to be based partly on the fact that most small leaks in Russia go unreported. Under Russian law, leaks of less than 8 tons are classified only as "incidents" and carry no penalties.
An enormous offshore Arctic oil boom is coming, and it’s being led by a government-owned agency in one of the most corrupt countries on Earth.