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Forbes Magazine
December 24, 2001
A Bridge Too Far
By Benjamin Fulford

Sakhalin, located only 35 miles away at its closest, would seem to be a perfect source of clean fuel for environmentally conscious and energy-starved Japan. But Tokyo and Moscow are still fighting a four-century-old battle over some smaller islands. The four Kurile islands north of Japan, most recently a prize of World War II, remain in Russian hands after 56 years of negotiations. (The two nations have never signed a peace treaty.) Japanese politicians regularly rant about the situation, and the nation's corporations shy away from most Russian trade.

Result: Not only is Japan left more exposed to the vicissitudes of Mideast oil, but Russia's undeveloped east is neglected by the region's biggest potential investor.

Japanese companies spend $1,500 to ship a 20-foot container to Europe's giant markets. If they used the trans-Siberian railroad, they could cut the 18,000-mile journey to Europe in half and pay only $1,020 per container, something their Chinese and South Korean competitors have already figured out. Add a bridge from Japan to Sakhalin to the planned one from Sakhalin to the Russian mainland to allow direct ground transport, and savings would be even greater. Don't bet on its happening anytime soon, though.

Even if that dispute could be settled, other obstacles lie between Sakhalin gas or oil and the Japanese. A pipeline could go under the ocean to Hokkaido in northernmost Japan, then split into lines running along the Pacific coast to Tokyo and Osaka and the Japanese seacoast to Niigata. But ultracheap Japanese government financing would be needed, at a time of staggering public debt.

Then there are the required payoffs, legal and otherwise. Fishermen will have to be compensated for any disruptions caused in the laying of the pipe. "Each minnow will be worth $100, and everybody in the region will suddenly declare he is a fisherman," says Takeshi Matsui, an official at Shell in Japan.

Yakuza gangsters also could be counted on to buy up land over which the pipeline would run. This would be sold to the government at a high price, the profits to be shared with the ruling Liberal Democratic Party. Ditto the assorted construction work. No wonder a pipeline to China via the Russian mainland looks like a better bet.

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