Russians Call for Stronger Regulation of Ships After Major Oil Spill

Although Russia will likely become wealthy over the long-term because of its oil reserves, the Russian government is going to slow that process to make sure no more oil spills happen like the one that caused $267 million in damages to the Kerch Strait earlier this month. A major oil spill in the Baltic Sea polluted a 30-mile stretch of water, killing birds and fish.

As a result, Russian officials will limit oil products shipped by river in 2008 by disallowing barges that are more than 25 years old. Because Russia has an industrial economy dating back to the Soviet Union, much of the oil industry’s equipment is aging.
“The fleet must be young. We will subject ship owners to such conditions that it will become unprofitable to use barges older than 25 years,” Alexander Davidenko, head of RosRechMorFlot, the river navigation agency, told Reuters.

According to oil industry spokespersons, this move will cut shipments by 70-80 percent below the customary 5-million ton level. The oil industry is not happy, suggesting that the government may be overreacting to the spill by over regulating the industry without doing sufficient research. They believe that there may be other ways to deal with the fallout without requiring major investment in new equipment.

Many of the oil companies we deal with have already put in place an integrated EHS software platform that enables managers to monitor and report such spills and correct problems with equipment before those problems erupt into crises.

Even though major oil spills are rare, organizations still need to be prepared to provide rapid and robust emergency response in order to minimize the potential ecological impact from these kinds of incidents. There’s plenty of motivation to do so, as investors are always closely examining companies’ ability to prevent or mitigate operational risks. Having a proactive crisis response plan, supported by a crisis management technology, can go a long way to protect the interests of the company and the community.

There are also rumors of a coming ban on floating storage facilities. When Russian rivers freeze in the winter, oil is stored in floating facilities until the spring thaw when it can be transported again. These facilities, if they are monitored correctly with crisis management reporting systems that support measures to prevent spills, could have their useful life extended without endangering rivers and seas.

If oil company barges would use the right kind of reporting and monitoring systems, it would be good news to the developed world, because we need the oil and the Russians need to sell it.

Add comment November 26th, 2007