Monday, November 19, 2007

Putin's Power Grab

The Russian president's global ambitions—and his drift toward totalitarianism—hinge on the staggering energy reserves of the onetime Siberian gulag of Sakhalin Island. Royal Dutch Shell knows the drill.

...Sakhalin Energy has brought a lot more than wintertime strawberries to this far-flung redoubt of the Russian Federation. Among the island’s nearly 600,000 residents, unemployment is at only 1.5 percent. Why? Sakhalin sits above one of the largest hydrocarbon deposits in the world. An estimated 90 trillion cubic feet of untapped natural gas and 12 billion barrels of crude oil lie beneath the ocean floor here.

The plant where Lekomtseva works is just one part of an oil and gas project known as Sakhalin II, which is, at more than $20 billion and counting, the largest foreign investment ever made in Russia. Indeed, it’s the most expensive project to produce and transport energy ever undertaken anywhere in the world....