The Sakhalin Oil and Gas project off the coast of Russia’s Far East has slogged along for more than 10 years. Recently, amid funding failures and questions around the impacts of the project, NGOs worldwide have come to the aide of the local population fighting against the largest oil and gas project in human history.

Yesterday, the Russian Ministry of Natural Resources, of which environmental watchdog Rosprirodnadzor is a part, ordered Royal Dutch Shell to stop laying pipe due to high risks of mudslide. The Russian government also said:

…Shell should halt construction of the link until it can complete environmental and safety studies at the end of the month. The government plans to sue the company to enforce the demand, said Oleg Mitvol, deputy head of the ministry’s environmental monitoring agency.

The Russian gov’t is moving in and filing suit for lots of reasons but one of them appears to be skepticism around the overall cost of the project. Last year, Shell suddenly stepped forward to say that total costs had doubled over $20 billion blaming it on “blaming the increase on currency swings and rising prices of commodities such as steel.”

RAN continues to put pressure on the funding behind the project. Where is the $20 billion coming from? Who in the world has the ability to lend that much money for a project as unsustainable and unstable as Sakhalin I and II? The banking industry. ABN Amro, the largest Dutch bank, RBS (Royal Bank of Scotland), Credit-Suisse First Boston are just three of the larger financial institutions thinking of, or already are, supporting the project. The record profits are too tasty to pass up.

The Western Grey Whale, salmon and other marine species are severely threatened by oil and gas drilling.

The waters around Sakhalin are important migration, rearing, and spawning areas for key commercial species such as salmon, crab, pollock, and herring, on which the fishing industry of Sakhalin depends, as well as for saffron cod, which plays an essential role in the traditional food of the native Nivkh people.

All the energy coming out of Sakhalin (in the form of oil and gas) is being exported. None of it is being kept for the needs of the local populous. In 2000, the oil and gas industry accounted for over 57% of Sakhalin’s industrial output. Now, it accounts for almost 80%. What happens when Exxon-Mobil and Shell suck out all of the natural gas and oil? They leave. What they leave behind is an unbalanced, wrecked economy that will struggle to find its new industry.

Not only is the Sakhalin project a direct threat to the environment and species in the region, it also threatens the growing but fragile economy that the local people depend on. What we should be doing is funneling the billions of dollars banks like RBS and CSFB away from oil and gas and back into renewable energy. Whether its funding research to increase the efficiency of solar or wind power, or its supporting the startup renewable energy groups, the motive is progress, to move beyond oil.