08ASTANA2523, KAZAKHSTAN: ARTICLES ACCUSE OIL COMPANIES OF CAUSING

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Reference ID Created Released Classification Origin
08ASTANA2523 2008-12-22 10:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2239
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2523/01 3571005
ZNR UUUUU ZZH
O 221005Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4178
INFO RUCNCIS/CIS COLLECTIVE 0954
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0356
RUEHKO/AMEMBASSY TOKYO 1062
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0524
RUEKJCS/SECDEF WASHDC 0430
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1018

UNCLAS SECTION 01 OF 03 ASTANA 002523 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, IIP, EEB/ESC, OES/PCI 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV SENV KPAO KZ
SUBJECT:  KAZAKHSTAN:  ARTICLES ACCUSE OIL COMPANIES OF CAUSING 
ENVIRONMENTAL DAMAGE TO CASPIAN REGION 
 
ASTANA 00002523  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On October 30, the Russian-language, independent 
weekly newspaper "Svoboda Slova" launched a series of inflammatory 
articles written by journalist Igor Larra called, "Defending the 
Caspian."  The paper has published three full-page articles to date, 
each one accompanied by sensational headlines (e.g., "Caspian Sea - 
or Dead Sea?" and "Dress Rehearsal for the Apocalypse") and 
disturbing photographs (e.g., babies with deformities, a mushroom 
cloud).  Despite a low circulation of 85,000, "Svoboda Slova" is 
popular among a politically-active segment of the population in 
Kazakhstan and exerts some influence over public opinion.  Linsi 
Crain, Deputy Manager for Government and Public Affairs of 
TengizChevrOil (TCO), and Richard Fritz, Public Relations Manager of 
Agip Kazakhstan North Caspian Operating Company (KCO) provided post 
with their reactions to the series of articles.  END SUMMARY. 
 
OCTOBER 30 ARTICLE LAUNCHES SENSATIONAL SERIES 
 
3.  (U) The October 30 article notes that Kazakhstan is "entirely 
dependent" on oil and gas revenue and claims that international oil 
consortia Tengizchevroil (TCO) and Agip Kazakhstan North Caspian 
Operating Company (KCO) will produce 100 million tons of oil from 
the Caspian shelf by 2015 and as a result produce 520,000 tons of 
"dangerous waste," such as sulfur and hydrogen sulfide.  The article 
claims that extensive drilling has damaged the soil and water 
resources of the Caspian region and alleges that there is 
"practically not a single well" that meets environmental standards. 
 
4.  (U) Citing 2006 data from the Atyrau oblast Department for 
Environmental Protection, the article claims the amount of 
pollutants in the Ural River, including sulfates, iron, zinc, and 
copper, has reached critical levels.  "Everyone in the region is 
sick without exception:  people, livestock, fish, and plant life." 
The article asserts that locals in the area are two to three times 
more likely to suffer from liver, heart, and lung disease, citing a 
report from the Institute for Social Health.  According to the 
article, from 1993 to 1994, the average life expectancy in the 
village of Sarykamys -- located 15 kilometers from Tengiz -- has 
dropped from 56 to 46 years and asks rhetorically, "Will TCO 
relocate these villagers as well?  How far will they have to go?" 
 
5.  (U) Under the heading, "Monster Ball," the article describes 
cases of babies born with birth defects such as Down syndrome and 
Hutchinson-Gilford Progeria (a rare rapid ageing disease) and claims 
that an employee of TCO recently gave birth to stillborn Siamese 
twins.  The article directly blames "the intensive oil production" 
in Atyrau oblast for these birth defects and declares that oil 
production in the Caspian has had an "extremely negative influence 
on the environment." 
 
NOVEMBER 6 ARTICLE CONTINUES DIATRIBE 
 
6.  (U) "Svoboda Slova" continued its "Defending the Caspian" series 
with a second installment in the November 6 issue.  This article, 
co-authored by Vitaliy Smirnov of the private enterprise Best 
Business Asia and Makhambet Khakimov of the non-governmental 
organization Caspian Defense, features a large drawing of a mushroom 
cloud over the Caspian Sea, headlined with the phrase, "Tengiz and 
Kashagan:  A Disaster from God -- or from the Oil Business?"  The 
article says that more than 1,000 wells have been drilled in the 
Caspian region and claims that some have been leaking oil into the 
Caspian Sea and regional water table.  The article expresses 
particular concern about leaks from abandoned wells and cites 
"official data" (no specific source is provided) that only 20 wells 
of the 1,000 have been sealed and abandoned.  Although the majority 
of the wells were drilled during the Soviet era, the authors single 
out the new wells drilled by TCO and KCO as the "most ,pMhIQ the 
 
ASTANA 00002523  002.2 OF 003 
 
 
authors claim that intensive oil exploration is slowly killing the 
Caspian Sea and that drilling expansion will signal its death knell. 
 It claims that the 1986 explosion at well number 37 of the Tengiz 
field killed hundreds of thousands of birds, had a dramatic, adverse 
impact on the health of the population
, and was no less a natural 
disaster than the Chernobyl nuclear accident that happened that same 
year.  Another heading shouts, "Life Threatening!" and claims that 
oil exploration is "killing every living thing in the region at this 
very moment."  Citing Dr. Muftakh Diarov, a member of Kazakhstan's 
National Academy of Science and Director of the Atyrau Center for 
Environmental Studies, the authors claim that Tengizchevroil 
produces two to four kilograms of sulfur and other "dangerous waste" 
for every ton of oil produced.  They blame TCO's open-air sulfur 
storage for irreparably damaging the environment and endangering the 
lives of local citizens and wildlife. 
 
DEFENSE RESTS WITH NOVEMBER 20 ARTICLE 
 
8.  (U) On November 20, "Svoboda Slova" published the third and 
final installment of its project, "Defending the Caspian."  The 
article is the transcript of an interview with Dr. Diarov, who says 
he fears that ongoing exploration for oil in the Caspian Sea will 
release a "fire genie in a bottle that, sooner or later, will 
explode and kill the entire north Caspian."  Diarov claims that the 
north Caspian region is prone to earthquakes and notes that much of 
the drilling taking place occurs at very deep levels and under very 
high pressure. In support, he cites Seismology Institute data 
forecasting major earthquakes at 7.0 on the Richter scale in Atyrau 
oblast, where both Kashagan and Tengiz are located.  He warns that 
"incompetent drilling at Kashagan could trigger a massive earthquake 
and terrible fire."  Diarov claims that none of the participants in 
the "project of the century" have experience working under similar 
environmental and geological conditions. 
 
9.  (U) Diarov despairs that the government of Kazakhstan will 
support drilling and exploration until disaster strikes, blinded to 
the danger by the revenue it receives from the rich subsoil 
resources.  However, he stops short of accusing the president of 
complicity in this crime:  "I have the distinct impression," he 
said, "that President Nazarbayev simply is not aware of the true 
danger of the coming ecological crisis.  Someone must be keeping the 
facts from him, because he reminded a group of foreign investors in 
June that they should first and foremost take care of the Caspian 
and guarantee its ecological health and stability."  Diarov comes to 
the conclusion that the citizens of Kazakhstan must take matters 
into their own hands and rely on their own strength by raising 
awareness of the environmental damage done to the Caspian region and 
turning public opinion against further drilling. 
 
10. (U) Under the headline, "Caspian Sea - or Dead Sea?," Diarov 
predicts that the Caspian will experience a "complete degradation of 
its ecosystem in 30 or 40 years."  He claims that tens of millions 
of birds will perish, entire species of fish will disappear, life 
expectancy in the region will fall to 35 to 40 years, and the 
psychological health of local residents will be at risk.  Diarov 
claims that his environmental research shows that as a direct result 
of drilling for oil over the past 10 years, the frequency of blood 
disease and related illnesses among those living in the Caspian 
region is four times higher than the average levels for those in the 
rest of Kazakhstan.  Diarov is particularly distressed that oil 
companies have conducted "disinformation campaigns" to sway public 
opinion in their favor and convince them that their exploration 
activities are not harmful to the Caspian environment.  He dismisses 
the companies' environmental monitoring as "unprofessional" and 
claims that people do not have the real facts and therefore do not 
know the real danger they are in.  Ending on a cynical note, he 
repeats an old Soviet proverb, "Whoever pays the piper, picks the 
tune." 
 
INTERNATIONAL OIL COMPANIES RESPOND TO ALLEGATIONS 
 
11.  (SBU) Linsi Crain, Deputy Manager for Government and Public 
Affairs of TengizChevrOil (TCO), said TCO strongly disputes the 
 
ASTANA 00002523  003.2 OF 003 
 
 
"unfounded accusations" made by "Svoboda Slova" and offered a number 
of facts and figures to rebut the charges.  For example, according 
to Crain, TCO has spent $1.8 billion on environmental projects over 
the past nine years, including $680 million as a part of its 
three-year Environmental Protection Plan adopted in 2007.  TCO plans 
to spend an additional $900 million on environmental protection 
projects over the next three years. 
 
12.  (SBU) As a result of this investment, according to Crain, TCO 
has reduced emissions by more than 50% from 2003 levels and has 
reduced natural gas flaring by 12% per year over the past four 
years.  By the end of 2009, according to Crain, TCO will eliminate 
all routine gas flaring.  Crain also disputed the charge that TCO 
accounts for more than two-thirds of all emissions for all 
industries in Atyrau oblast.  According to Crain, "Svoboda Slova" 
based this figure on the seven largest stationary installations and 
did not take into account emissions from hundreds of smaller 
stationary sources or mobile sources within the oblast, which 
produce more than 40,000 tons of waste each year. 
 
13.  (SBU) Crain also cited several ongoing studies by the World 
Health Organization in partnership with Kazakhstani research 
institutes on the state of public health in the Kulsary district of 
Atyrau oblast.  According to Crain, none of these studies 
demonstrated any relationship between TCO emissions and the overall 
health of the local population.  Moreover, Crain told Energy Officer 
that the Ministry of Environmental Protection endorsed the findings 
of the Sulfur Coordination Council that sulfur produced and stored 
by TCO has had "no significant impact" on the health of local 
residents. 
 
14.  (SBU) Richard Fritz, Public Relations Manager of Agip KCO, the 
consortium that operates the Kashagan oil field, also strongly 
denied the allegations raised in the "Svoboda Slova" series.  Fritz 
said that Agip KCO has gone to great lengths to protect the Caspian 
ecosystem and follows a strict, "zero discharge policy," under which 
no waste water or runoff water is returned untreated to the Caspian 
Sea.  Fritz furthermore told Energy Officer that Agip KCO also 
removes and safely disposes of the cuttings and drilling mud, in 
accordance with Kazakhstan's environmental regulations.  Fritz 
admitted that Agip KCO has only spent 6% (approximately $3.25 
million) of the funds budgeted for environmental protection, but he 
explained that this was due to the local government's delayed 
approval of the company's Environmental Protection Plan.  Fritz said 
once the plan is approved, Agip KCO will spend 100% of the funds 
allocated for environmental protection. 
 
15.  (SBU) COMMENT:  The "Svoboda Slova" series shows that 
Kazakhstan's print media can be just as controversial, if not as 
scandalous, as the tabloids sold in grocery-store checkout lines in 
the United States.  Indeed, it i
s not uncommon for 
small-circulation, local newspapers to make populist accusations 
against international companies in Kazakhstan.  Regional governments 
in Kazakhstan, which collect all of the revenue from environmental 
fines of companies operating in their oblast, have been known to 
pressure local newspapers to write investigative articles accusing 
companies of violating environmental laws.  However, it is unusual 
for a well-established, national publication such as "Svoboda Slova" 
to publish a multi-part series this inflammatory.  Post has not 
found any evidence that this series of articles was sponsored or 
encouraged by other foreign government agencies.  Nevertheless, the 
stories continue and companies remain under attack, unfairly charged 
and prosecuted in the court of public opinion.  END COMMENT. 
 
HOAGLAND

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