Daily Archives: September 20, 2006

Blog vs. Blog: Just the Facts, Please

Here’s what wacky Wally Shed of the Accidental Russophile recently wrote to La Russophobe in a comment on this blog: “This will be the last time you’ll hear from me on this embarassment that you call a ‘blog’.” This came after he called La Russophobe an “idiot.” Which came just before he attacked La Russophobe for “hatemongering.” Isn’t that ironic. As for the first sentence, here are some statistics comparing the “embarrassing” La Russophobe to Wally’s cauldron of outrageous America-bashing propaganda, enabling the rise of dictatorship in Russia.

As of 9am E.S.T. Wednesday September 20:


11,500 visits in six months or 1,918 visits per month


11,793 visits in seven months or 1,710 visits per month


182 links from blogs in six months or 30 links per month.


134 links from blogs in seven months or 19 links per month


33 linking blogs in six months or 6 linking blogs per month


52 linking blogs in seven months or 7 linking blogs per month

In other words, in every category La Russophobe either vastly exceeds or nearly matches Wally’s blog, which is much older than hers. So if this blog is an “embarrassment” then what can we say about the Wallygator’s efforts? Ultraembarrassing? Wally’s counter registers only slightly more total visits than La Russophobe even though Wally’s blog has existed 30% longer than hers has, and he has signifantly fewer views of his profile.

So La Russophobe can’t help but wonder . . . is he jealous, or is he just trying to wipe the truth off the face of the earth? In a post about American propaganda on Russia, Wally vehemently condemns American “ignorance.” In a post about Russian propaganda on America, he asks the reader to decide whether Russian propaganda is right or wrong. So La Russophobe will let the reader decide about Wally’s motivations.

Neo-Soviet Russia Obliterates Property Rights, Alienates Entire World

Previously, La Russophobe reported on how Russia was breaching its contract with the Exxon oil concern, alienating vast swaths of power in the United States. Now, the Moscow Times tells us that this was only part of a wholesale obliteration of property rights, just as in Soviet Times. The state is taking control, and the consequences be damned. It’s not the least bit surprising, of course, that a proud KGB spy like Vladimir Putin would pursue such a policy; but that the Russian people would favor with such support as Putin gets in the polls a leader who is merely repeating the mistakes of a failed past is quite shocking, and that the Russian government, one of the world’s most offensive polluters, would seek to use environmentalism as a pretext for these neo-Soviet acts is truly disgusting.

Just as in Soviet times we must now begin asking: Who’s next?

The Natural Resources Ministry’s decision to revoke approval of Shell’s Sakhalin-2 project provoked sharp criticism Tuesday from the European Union and Japan, amid signs that the move was part of a broader attempt to put a state stamp on foreign-run energy projects.
EU Energy Commissioner Andris Piebalgs warned against the creation of an unstable investment environment that could halt future energy projects and disrupt global oil supplies. He took “this announcement very seriously indeed,” Piebalgs said in a statement, adding that he would soon discuss the issue with Industry and Energy Minister Viktor Khristenko.

Shinzo Abe, Japan’s government spokesman and the man tipped to succeed Prime Minister Junichiro Koizumi later this month, said the decision, which effectively suspends all work on the multibillion-dollar project, could harm diplomatic relations between the two countries, Reuters reported.

The Natural Resources Ministry canceled its approval of the Sakhalin-2 project on Monday, citing environmental violations during the construction of an oil and gas pipeline on Sakhalin Island. Shell, with a 55 percent stake in the Sakhalin Energy holding, is the project’s operator on behalf of minority shareholders Mitsui and Mitsubishi of Japan.

Japan, heavily dependent on energy imports, is to be the top customer for Sakhalin-2, which will be the world’s largest liquefied natural gas, or LNG, project once it comes on stream.
The head of the Paris-based International Energy Agency, Claude Mandil, also warned that the move against Shell could deter investment, Reuters reported.

The revoking of environmental approval was the culmination of months of steadily increasing state pressure on project operator Sakhalin Energy, which announced last year that the estimated cost of the project had doubled to $20 billion. Under its production sharing agreement, or PSA, with Sakhalin Energy, the government must wait until investors recoup their costs before taking in revenue from the project.

The move against Shell comes as PSAs increasingly come under fire as the state seeks to maximize revenue from high oil prices.

Economic Development and Trade Minister German Gref said Tuesday that PSAs were outdated investment mechanisms, and while the state would continue to honor its three existing PSAs, none would be signed in the future, Reuters reported. “We can support far from all proposals regarding greater costs. In our opinion, some of them are not very well considered. There is room for improvement,” Gref said, Itar-Tass reported. “As far as the existing agreements are concerned, we shall be obliged to ensure their observance.”

ExxonMobil has also been under fire for its involvement in Sakhalin-1. The head of Russia’s environmental watchdog in the Far East Federal District, Alexander Poleshchyuk, said the terminal should undergo more checks before being given the green light, Reuters reported.

Total is the operator of the country’s other PSA, the Kharyaga oil project in the Nenets autonomous district.

The Sakhalin Energy PSA was signed in 1993, when the country was in the throes of political and social upheaval and eager to provide a sense of stability to wary foreign investors. The stability of recent years, underpinned by high oil prices, has changed that.

PSAs are most often used to cover high-risk ventures, stipulating their own tax and license regimes and thus protecting investors from changes in volatile national tax law.

“The brutality suggests this is more than just Gazprom entering the project,” said Adam Landes, oil and gas analyst with Renaissance Capital investment bank. “It is necessary to say at this juncture that Russia wants to change the economic terms of PSAs. “These deals were struck a decade ago, when Russia was in a very different position. Russia would not be offering now the terms it offered back then,” he said, adding that “this has happened the world over” since oil climbed to more than $60 per barrel.

Russia is the latest country to move toward regaining control of its energy industry, as governments scramble to fill state coffers with the huge windfalls that high oil prices provide.
In the most extreme recent case, Bolivia deployed its army this summer to wrest control of foreign-run natural gas fields after announcing it would nationalize its oil and gas industry.

In Chad, President Idriss Deby said last month that his government should hold a 60 percent share in oil production and levied hundreds of millions of dollars in back taxes against Chevron and Malaysia’s Petronas, which each hold a large share in the country’s oil industry.
“There certainly has been a notable trend around the world toward energy nationalization,” said Chris Weafer, chief strategist at Alfa Bank. “Yet this is something that has been a feature of energy-dependent countries over the decades.”

Russia is likely to avoid the inefficiency and underinvestment that have plagued so many countries’ nationalized industries by keeping foreign companies around as partners, Weafer said.
While the Kremlin is not seeking outright nationalization of the energy sector, it is trying to ensure that state-run companies have a much bigger say in the industry.

Analysts said the state was unlikely to revoke Shell’s license to develop Sakhalin-2, but would rather ensure that state-run gas giant Gazprom ended up with a significant stake in the project.
“The government will get direct control over the project in this way,” said Andrei Gromadin, an oil and gas analyst at MDM Bank. “This is a more effective and more direct tool than renegotiation of the PSA.”

Gazprom spokesman Sergei Kupriyanov said that Monday’s decision had halted its negotiations with Shell. Gazprom has sought a 25 percent stake in the venture in exchange for half of the Zapolyarnoye field in western Siberia.

The state will likely revisit its PSAs with ExxonMobil in Sakhalin-1 and with Total in the Kharyaga oil project to maintain a controlling stake, Weaver said. “With the other two PSAs, the state will wait for some opportunity to barter something in exchange for an equity stake,” he said.

And, as the government looks toward future projects, “Gazprom and Rosneft will have controlling stakes in projects, with foreign companies playing a supporting role,” Weafer said.
Oleg Mitvol, deputy head of the Natural Resources Ministry’s environmental watchdog, insisted state actions against Sakhalin-2 were driven by environmental concerns.

The Sakhalin-2 project has committed gross violations of the law, Mitvol told a news conference on Tuesday, backing up his point with photographs that he said showed pipelines on Sakhalin Island that crossed rivers and caused land erosion and the destruction of salmon spawning grounds.

“We are just doing what any country in the world would do,” Mitvol said. “If [someone had done this] in the United States, he’d be in jail. Here, he’s sitting in a Mercedes.”

BW Exposes the Horror of Flying Russian Style

Business Week magazine contains an article reviewing the increasingly terrifying prospect of boarding a commerical jet anywhere in Russia. As is often the case in Russia, the ultimate horror here is not even the sickening loss of life, but the even more sickening indifference to it on the part of both the government and the people. In Russia, individual human lives have lost all significance.

The Deadly Skies of Russia

Russia’s air safety standards are in the spotlight after a spate of recent accidents due to dangerous airports, tired pilots, and old planes.

With trademark black humor, Russian pilots call the Irkutsk airport the “Siberian Bermuda Triangle.”

The thick fog is ubiquitous; the slippery runways slope at odd angles; garages, sheds, and hangars sit precariously close by. Some superstitious locals also say the airport is cursed due to the presence nearby of a mass grave filled with the remains of victims of the Stalin-era terror. Whatever the cause – bad climate, poor infrastructure, or restless angry spirits – nearly one-fifth of the 26 major Russian airline accidents since the breakup of the USSR have occurred in Irkutsk.

Most recently, on 9 July, a Sibir Airlines Airbus A310 overshot a runway while landing, smashed through a concrete fence into nearby garages and burst into flames. Some 124 of the more than 200 passengers and crew on board were killed.Describing the accident as “ill fate,” Prime Minister Mikhail Fradkov told Transport Minister Igor Levitin to draft proposals to improve airport safety in Irkutsk.But while Irkutsk’s airport is certainly one of Russia’s biggest airline safety concerns, it is not the only one. Tragic incidents sometimes occur mid-flight, during what is normally the safest part of the trip.

The most recent such accident took place on 22 August, when a Pulkovo Airlines Tupolev Tu-154, en route from the Black Sea town of Anapa to St. Petersburg, crashed north of the Ukrainian city of Donetsk killing all 170 people on board.And while the Sibir and Pulkovo airlines disasters attracted international headlines, Russia experienced a series of smaller incidents this past summer that got less attention. On 10 July, just a day after the Irkutsk crash, another potential catastrophe was averted when another A310 was forced to make an emergency landing in Simferopol after a dangerously sharp drop in the oil level of one of its engines. On the same day, a Tu-134 Russian Navy plane was forced to land in the Crimea after one of its engines burst into flames.On 27 July two Russian military jets – a MiG-29 fighter and a Be-103 – crashed.

A day earlier, a Yak-26 aerobatic trainer crashed in the Razan region.So why do airlines suffer so many deadly crashes? Analysts cite a variety of reasons including ageing fleets, poorly trained and unqualified pilots, bad airport infrastructure, and corruption.


A technician who worked on the Airbus A310 that crashed in Irkutsk told the newspaper Komsomolskaya Pravda that the aircraft’s thrust-reverse had malfunctioned prior to takeoff.According to Aleksandr Bocharov, spokesman for the Airbus office in Russia, an A310 “can operate” safely “for 25 years and a total flying time of 59,000 hours.” Whether or not the A310 – which had undergone regular maintenance in Germany one year before the crash and was scheduled for maintenance in 88 days – had exceeded its recommended flying time, experts say this is a common problem for Russia’s cash-strapped post-Soviet airline industry.

When the Soviet Union broke up in 1991, so did the state airline Aeroflot, which budded off 500 smaller, regionally-based companies. The smaller of these had little choice but to stick with their ageing Soviet-era fleets. The larger ones could only afford to purchase older foreign aircraft.Eager to unload their older planes, foreign manufacturers offer aircraft to Russian companies on flexible and attractive conditions: easy credit, installment plans, large discounts, and leasing. Russian airlines tend to economize in procuring and maintaining their fleets at the expense of safety, an industry official said, speaking on condition of anonymity due to the sensitivity of the topic.

One exception is the national carrier Aeroflot, which is planning to spend $3 billion for 22 long-haul aircraft. On 15 September, however, Aeroflot announced that it was indefinitely postponing a decision on whether to buy Dreamliners from the U.S. firm Boeing or A350s from its European rival Airbus. “The date of the new board meeting is not set yet.

The final decision is being put off,” Aeroflot’s Deputy Director General Lev Koshlyakov told Reuters.But even if all of Russia’s airlines could afford to make such a purchase, it would not make the skies safer, according to experts. According to some estimates, 70 percent of Russian air crashes involve human error. Just as Russia’s fleet of aircraft is ageing, so are its pilots – and there are few younger cadres to replace them.The average age of a Russian pilot is 42, which means that a significant number are over 50. Some medical experts have suggested that a significant number of Russia’s older pilots should be grounded for health reasons.

According to the Russian Aviation Workers’ Trade Union, airlines face a shortage of skilled pilots as the younger generation is not going into the profession due to low salaries. Moreover, Russia has just two schools training civilian pilots.Compounding these problems is the decrepit state of Russia’s airports.

According to the air transport research organization Skytrax, Russia has three of the world’s most dangerous airports: the infamous Irkutsk field, Adler, and Petropavlovsk Kamchatsky. In Adler, the airport for the Black Sea city of Sochi, aircraft must perform a complicated – and terrifying – loop maneuver in order to land on a small strip between the mountains and the sea. Moreover, the airport lacks standard radio and lighting equipment. In Petropavlovsk Kamchatsky on the mountainous Kamchatka peninsula, takeoffs and landings are complicated by extreme turbulence, high hills, and volcanoes.

Overall, 39 Russian airports are in need of emergency repairs on runways. Part of the problem is that runways and landing strips at Russian airports are constructed from concrete blocks. On older runways, the center of these blocks tend to sink and form a bowl that accumulates water, leading to hazardously slippery runways flooded with puddles.And then there is plain old fashioned crime and corruption. Police in Moscow, for example, recently caught workers at the Vnukovo Aircraft Repair Works using uncertified parts stolen from the Saturn plant in Rybinsk. Investigators later discovered that many of these faulty parts had been installed on aircraft engines.


Attempting to reassure the public, some Russian airline executives have suggested that the rise in accidents is not really a cause for concern. Russian authorities register many thousands of road accidents every year, they say. Accidents occur on the railroads, on boats, and at factories as well. This is the price people have to pay for the industrial revolution.

The Russian government was only slightly less cavalier. It promised to pay 100,000 rubles ($3,700) to victims’ families in the A310 crash in Irkutsk, and 50,000 rubles to survivors. But despite mounting evidence that airlines’ habit of buying second-hand aircraft from abroad is harming airline safety, Transport Minister Levitin said the government does not plan to initiate more comprehensive controls on the process.

“The mechanism works and we will not change it,” he said, adding that the A310 that crashed in Irkutsk had been regularly maintained and passed all safety tests.But a looming lawsuit may cause the foreign companies supplying Russian airlines to exercise more caution.

The American law firm Speiser Krause has agreed to represent 27 families who lost relatives in the Irkutsk crash. The firm, which claims that a problem in the aircraft’s reverse braking system caused the crash, is preparing to sue U.S. and British companies that manufactured parts for the A310 for $800,000 to $1.5 million in compensation per victim.