Massive oil spills in the Arctic Circle in Russia have raised fears of unprecedented damage to the environment. In late May, 20,000 tons of diesel spilled into the Arctic Circle, prompting Russian President Vladimir Putin to declare a state of emergency. The oil spill has polluted local rivers and reached underground. According to Russian officials and international environmental organizations, the effects could be felt “for decades.” Emergency agencies in Russia are working to reduce the impact, but the impact could go far beyond the environment. Russian private business, future construction and President Putin’s support could all be affected by this catastrophe.
The power plant supplies electricity to the city of Norilsk, a major industrial center in Siberia, and is owned by a subsidiary of the world-renowned nickel and palladium metal manufacturer Norlsik Nickel.
Among the major shareholders of the Norilsk Nickel Company are Oleg Deripaska, another Russian billionaire, along with Vladimir Putin, Russia’s richest man. Norilsk Nickel has been hit by an oil spill before. Four years ago, the Daldican River turned red after a similar accident. According to state media reports, the latest oil spill has polluted an area of 350 square kilometers. The Russian branch of the environmental agency Greenpeace says the oil spill is the worst environmental catastrophe in the Arctic in 30 years.
Environmentalists have compared it to the crash of an ExxonMobil oil tanker off the coast of Alaska in 1989, when the tanker went underground and spilled about 37,000 tons of crude oil into the Pacific Ocean.
Criticism of President Putin has weighed on the share price of norilsk nickel. In a televised speech, Putin criticized a company for delaying reporting the accident. Shares of Norilsk Nickel fell more than 9.5% but then recovered.
The crash also sparked a debate in the Russian media over the need to revise the privatization process in the 1990s. In this privatization, a small group of merchants bought the country’s most lucrative industries and became elite.