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. Last Updated: 07/27/2016

Sakhalin Abuzz About Looming Energy Boom

PRIGORODNOYE, Far East -- All that is left of Prigorodnoye is three families and the ruins of a kelp processing plant.

The village is a dot on a green stretch of coast on the island of Sakhalin, off the Far East coast. It began losing population several decades ago, but the process accelerated in the last 15 years as economic collapse engulfed Russia.

One of the remaining residents, Alexandra Nikolayevna, a lively woman of 72, has not surrendered to economic hardship. She has tended her large garden, milked her one cow and coexisted with the smattering of dachas nearby since she moved here in 1952.

But change is speeding toward her. In the next four years, two groups of foreign oil companies will inject $13 billion into the region's tiny economy. The sum -- 72 times the size of Sakhalin's annual budget -- will go toward developing oil and gas.

At Prigorodnoye, companies plan to build a giant new natural gas processing plant. It will be the first of its kind in Russia and one of the largest in the world, and it will look like a steel footprint over this hilly strip of coast.

She has already seen a harbinger: This winter a small group of men, some foreign, camped out in trailers along the beach. They measured and dug holes. She greeted them with wary optimism.

"People have been waiting for this factory for 15 years," said Alexandra Nikolayevna, who, a bit distrustful of strangers, gave only her first name and patronymic.

Little seems to have changed on Sakhalin since Russia obtained the island from Japan in the late 19th century. It has remained a remote border post without much of an economy. Most roads are dirt. The airport in the northern part of the island is unusable in the rain.

Early visitors were struck by its wildness. Anton Chekhov, who visited here, wrote in the summer of 1890: "The residents live their sleepy, drunken lives and in general live hungrier and more naked than God created them."

Their lives had a feeling of "something not Russian," he observed.

Alexandra Nikolayevna heats her home with wood and coal. She has no running water. She has electricity, but power failures are frequent. A shutdown before the New Year left her celebrating by candlelight.

The region's governor, Igor Farkhudinov, says the energy project will change all that. As part of the development, oil companies will build bridges, pave more than 20 roads and run a gas pipeline down the island's long backbone.

"We have colossal problems," Farkhudinov said in an interview. "For us, it's very important to have transport infrastructure, airports and roads. We want to be able to drive from the north to the south all year round."

Local environmentalists are wary. The offshore drilling threatens a nearby population of gray whales, said Dmitry Lisitsyn, chairman of Sakhalin Environment Watch.

"These projects do not have adequate protections," Lisitsyn said. "We don't want to have to wait for an oil spill to get a decent protection system in place, like in Alaska."

The oil companies deny that their project will pose any danger to the whales, and contend that it will improve life for the island's 591,000 residents. The development "will be a complete jump into the future" for residents, said Rein Tamboezer, country chairman in Russia for Shell Exploration and Production Services, the lead company in one of the projects.

But Alexandra Nikolayevna seems content in the present. She cares for her cow and occasionally walks the 18 kilometers to the next large town to buy staples. She likes to recall the papery Japanese houses that were here when she arrived and the Soviet-era parades along the beach decades ago.

Some people here say they crave the future. In Okhotskoye, another village on the southeastern coast, the women standing behind a worn wooden sales booth, peddling crabs, could talk of nothing else. Galina Fyodorova, 55, chatted with customers about what the big foreign companies would bring.

She longs for a life that is more predictable. The economic collapse of the last decade scrambled her life. The cannery where she was a manager closed four years ago. Her son disappeared after getting involved in a shady business. Now she survives on what she grows in her garden and the crabs she catches.

"We sell them, but we can't afford to eat them," she said matter-of-factly.

Other villagers cling to the past. Fyodorova's neighbors display their pining for the Soviet days with a large portrait of Leonid Brezhnev nailed to the outside of their house.

But things are about to change. As thousands of new workers flood onto the island, prices are likely to rise, making it harder for those not working on the new projects.

Jeff Valkar, director of the American Russian Business center financed by the U.S. government in Yuzhno-Sakhalinsk, the island's capital, compares the approaching boom with the one in Alaska in the late 1970s after the pipeline was opened, when prices jumped and crime soared.

"The society here doesn't know how to prepare itself for what's coming," Valkar said. "There are many remnants of the Soviet past in the mentality and culture of people here. They're not really ready for this."

But Alexandra Nikolayevna is already preparing. She has been told that she must move by fall. She surveys the green hills, the buttercups in her pasture and the small trees that grow away from the wind as if brushed and shakes her head.

"They asked me if I approved of the project," she said, wiping her hands on her rough blue smock. "I told them, 'Yes, I approve.' But I'm sad to leave. I spent my life here."