NON-TECHNICAL SUMMARY
INTRODUCTION
This is the Non Technical Summary of a Social Impact Assessment (SIA) for an offshore multiple well exploration drilling programme (the Project) . The programme will be conducted within the Sigguk exclusive licence 2008/10 (Sigguk Licence) off the north west coast of Greenland between June and October 2010, with a two month contingency window over November and December, in case relief well drilling is required. It is important to note that Project drilling activities may require all or only part of this period.
This SIA considers issues as they relate to the exploration drilling programme in the Sigguk License area. Further revisions of the SIA, with additional data collection and stakeholder consultation, will therefore be produced for any further exploratory drilling outside of the Sigguk 2010 campaign, or for any future stages of the exploration and potential development phases of work.
This SIA has been produced by Environmental Resources Management (ERM) on behalf of Capricorn Greenland Exploration-1 Ltd ( Capricorn ), a subsidiary of Cairn Energy PLC ( Cairn ). It has been undertaken in accordance with applicable Greenland legislation and standards, international guidance and the corporate policies and expectations of Cairn .
SIA STANDARDS AND PERMITTING
The regulatory framework for offshore oil and gas activities in Greenland is currently being revised. The Bureau of Minerals and Petroleum (BMP) is the main implementing agency for laws relating to hydrocarbon exploration, and has been consulted throughout this SIA process.
SCOPE
As well as the SIA, a separate Environmental Impact Assessment (EIA) has been produced for the Project by ERM on behalf of Capricorn. Physical and biological environmental factors are therefore excluded from the SIA and covered by the EIA.
The geographical scope of the SIA includes the municipality of Qaasuitsup, with particular attention paid to the towns of Ilulissat and Aasiaat, where some on-shore Project facilities may be located. Where information is available, it is also included for the towns of Qeqertarsuaq, Kangaatsiaq, Uummannaq, Upernavik, and Qasigiannguit.
The municipality of Qeqqata is also considered in this report, in terms of impacts to Sisimiut, from where significant quantities of Greenland-based services and materials will be sourced, and Kangerlussuaq, which will be the transit gateway for rotational workers entering and leaving Greenland.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 i
Figure 1 (below) illustrates the Project area considered as part of this SIA.
Figure 1 Project-Affected Area
Source: nunagis.gl (2010)
PROJECT PROPONENT AND SIA PRACTITIONER
Project Proponent
Capricorn Greenland Exploration-1 is a subsidiary of Cairn Energy PLC based in Edinburgh, UK. Cairn is an independent, public oil and gas exploration and production company quoted on the London Stock Exchange.
SIA Practitioner
ERM is a leading global provider of environmental, health and safety, risk, and social consulting services, with 137 offices in 39 countries employing approximately 3,300 staff. ERM has worldwide expertise in environmental and social impact assessment for offshore oil and gas projects, including operations in Arctic waters.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 ii ASSESSMENT METHODOLOGY
Overview of the Impact Assessment Process
This SIA has been undertaken following a systematic process that predicts and evaluates the probable impacts of the Project on aspects of the socio-economic environment; it identifies measures to mitigate adverse impacts, and to maximise benefits, as far as is reasonably practicable.
The overall approach is shown in Figure 2. Screening and Scoping for the SIA (and EIA) has been underway throughout Project planning and has involved consultation with the Greenland Government and key stakeholders, review of legislation and international standards and examination of previous studies. Engagement with the authorities and key stakeholders, affected populations in the Project area and Non-Governmental Organisations (NGOs) has continued throughout this process, as has interaction with the Capricorn Project Team.
Figure 2 Overview of IA Approach
Screening
Scoping
Assessment Stakeholderengagement
Predict magnitude of impacts
Evaluate their significance
collection and new and surveys) new collection Investigate options for mitigation Baseline studies (existing data (existing studies Baseline
Reassess residual impact (as required)
Management Plans/ Mitigation Register Interaction with project planning and design and planning project with Interaction
Reporting and Disclosure
Baseline Data Collection
To provide a social baseline against which potential impacts can be assessed, the SIA provides a description of the conditions that exist in the absence of the Project. The baseline identifies and assesses all stakeholders (also called “receptors”), as well as resources identified as having the potential to be significantly affected by the proposed Project.
In preparing this SIA, a range of existing information sources and existing studies have been used. A comprehensive literature review has been conducted using reports prepared by government agencies; Greenlandic and
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 iii Danish research organizations, results from previously conducted studies in Greenland, and other published sources.
In order to supplement published information and data, a social baseline data gathering mission was undertaken in February 2010. Consultations undertaken as part of this mission are summarised in Table 1 below.
Table 1 Summary of Stakeholder Engagement
Location Stakeholders Engaged
• GA, NuSuKa, SIK • Greenland Travel Companies • Greenland Training Institutions • Air Greenland • Royal Arctic Line • Local Non-Government Organizations Nuuk • Beredskabskomiteen • KANUKOKA • Fishing Associations • Ministries of Internal Affairs; Environment and Nature; Financial Issues; Infrastructure; Housing and Traffic; Fishing, Hunting and Agriculture; Health and Social Affairs; Industry and Labour; Education, Culture, Church and Science; BMP • Town administration • Port Authority • Sisimiut Airport Authority (GLV) • Chamber of Commerce • Fire and Police • Training Institutions • Municipal Administration and Offshore Group • Police station • Ilulissat GA and Chamber of Commerce • INI • Small business owners • Local tourism operators • Chamber of Commerce Aasiaat • Local unemployed residents • Local fishermen and hunters • Town administration Uummannaq • Small business owners • Citizens • Qasigiannguit Town administration • Head of Culture • Qeqertarsuaq Town administration • Small business owners
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 iv Figure 3 Public Consultation in Uummannaq (February 2010)
Source: ERM 2010
Following publication this non-technical summary (NTS), as well as the summary for the EIA, the findings of the Social and Environmental Impact Assessments will be communicated and verified through a public hearing process, during which time stakeholders will have the opportunity to query and comment on the report. This is expected to take place in mid-March 2010.
Assessment of Impacts
The assessment describes what will happen by predicting and quantifying as far as possible the magnitude of impacts. The term ‘magnitude’ is used as shorthand to encompass all the dimensions of the predicted impact including:
• the nature of the change (what is affected and how); • its size, scale or intensity; • its geographical extent and distribution; • its duration, frequency, reversibility, etc; and • where relevant, the probability of the impact occurring.
Magnitude also includes any uncertainty about the occurrence or scale of the impact. An overall grading is provided to determine whether an impact is of negligible, small, medium or large magnitude.
The next step in the assessment process is to explain what the magnitude of an impact means in terms of its importance to people and the environment. This is referred to as Evaluation of Significance.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 v
Magnitude and sensitivity are considered in combination to evaluate whether an impact is significant and if so its degree of significance (see Figure 4).
Figure 4 Evaluation of Significance
Magnitude of Impact
Small Medium Large
Not Significant
Minor
Moderate
Major Value/Sensitivity of Resource/Receptor Value/Sensitivity High Medium Low
Mitigation and Residual Impacts
Impacts from both routine and non-routine Project activities are considered, taking into consideration existing mitigation measures within Project design. Where the assessment results in significant impacts, methods for practical and affordable mitigation are identified.
SOCIAL SETTING
Employment and Training
Employment and training of the population is considered to be a key priority by the Government of Greenland, and this was reflected in consultations with all stakeholder groups.
A range of training facilities exist in the Project area, including local Piareersarfiit, targeted training programmes provided through employee and business associations, as well as highly developed facilities such as the Sisimiut Building and Construction School ( Figure 5) . At the national level, other training facilities for training opportunities include the Metalwork and Industry school (in Nuuk), the Food Service and Preparation School (in Inuili), and the School for Merchant Mariners (in Paamiut).
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 vi Figure 5 Sisimiut Building and Construction School
Source: ERM 2009
Access to education and training opportunities is challenged by poor attendance, low availability of trained teachers, and challenges in the social background of students. Students who are unable to access education and training and are therefore unable to acquire basic qualifications and skills face greater difficulties in qualifying for and maintaining stable employment.
Hunting and Fishing Activities
Hunting and fishing remain the dominant livelihood activities in the Project area, and provide an important source of income and subsistence as well as a critical aspect of Greenlandic cultural identity. Changes in climate, economy and aspirations of young people are resulting in progressive decline in hunting and fishing as the primary economic activity for families.
The majority of local fishing vessels are small-scale operations, though large commercial companies also work in the waters off the Project area. As demonstrated in Figure 6 , fishing activities are focussed primarily along the inshore areas, which are accessible to both commercial and small-scale fishermen. Deeper waters are fished by commercial trawlers, and the area near the drilling licence is fished for halibut and, to a lesser extent, shrimp.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 vii Figure 6 Fishing in Project Area
Source: ERM 2010
Although less significant as a commercial activity, hunting is an important source of income, through sale of meat and skins, as well as subsistence and culture in Greenland. Significant species include muskox, reindeer, seabirds, seals, walrus and whales.
Local Business Activity
The largest companies in Greenland tend to be Government-owned (such as Royal Arctic Line, Air Greenland, Royal Greenland and KNI A/S) – with some exceptions (such as Polar Seafood). Generally, however, the majority of private businesses in Greenland are small, with few medium-sized enterprises. Within the project area, the main sectors of business are construction and repair. Tourism is also important locally, although its contribution to the national economy is so far modest at the national scale. Within the project-affected area, tourism activities include dogsledding and skiing in the winter, hiking, whale watching, kayaking and sailing in the
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 viii fjords in the summer, along with sports fishing and excursions to historical settlements and archaeological sites. Higher-level tourism infrastructure has been developed in the larger towns of Sisimiut, Ilulissat and Kangerlussuaq.
The majority of businesses are associated within Chambers of Commerce or similar businesses organizations. These structures promote economic and industrial development in the municipalities, through training and capacity building, encouraging collaboration.
Infrastructure
Towns and settlements in Greenland are not commonly connected by road. Instead, passenger and goods are transported by sea or air. Because of the importance of ports and airports as hubs of transport and commercial activity in Greenland, impacts to these are carefully considered.
Ports are an important gateway for marine traffic in Greenland; the larger ports, in particular, receive passenger vessels, cargo vessels, fishing trawlers, cruise vessels, small scale fishing boats, foreign vessels and vessels that need tank water and fuelling.
All towns and settlements will have a port of some level; however the main commercial ports in the Project area are located in the largest towns of Sisimiut, Ilulissat and Aasiaat.
Figure 7 Port of Sisimiut
Source: ERM 2009
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 ix The port of Sisimiut (Figure 7) is the major port of the region, and will be used by the Project for storage and loading of supplies for the drill ships (through a contract with Royal Arctic Line). Currently, it is used by commercial fishing fleets, supply vessels, passenger ferries, and international cruise ships. Stakeholders have reported that traffic through this port is a serious issue, and raised concerns that Project activities might create further congestion. Port Authorities in Sisimiut reported that there is already a high likelihood of delays to port access at all times of the week (including Sundays), with delays reaching 12- 24 hours. Because the port is run by Royal Arctic Line, the issue raised was less about meeting the Project needs, and more about potential challenges faced by other port users.
Air Greenland is the only air carrier in Greenland. As the national aviation company, Air Greenland provides both commercial flight services and well as social transport needs for the country, including transport of goods and supplies and medical response/ transport.
Nearly all towns and settlements will have at least a helicopter pad, while most towns have at least a small airport. Airports in Greenland are managed by the Airport Authorities, which are responsible for the staffing and scheduling of national airports. In some towns, limited air tower controllers restrict the opening hours of airports, which can affect air travel to and from those areas.
The Aasiaat airport, which currently operates a six hour window, will have its capacity supplemented to meet Project needs for crew transport and emergency response. The airport authorities have indicated that they plan to reallocate four tower controllers from elsewhere in Greenland during the period of exploration drilling, to allow the airport to operate 24/7. There are no plans to develop airport infrastructure specifically for this Project; staff at airports from which supplemental operators have been drawn will be expected to compensate for the reduced manpower with overtime.
Greenland lacks the equipment and infrastructure necessary for high level emergency response or SAR. In recognition of this, Capricorn will establish oil spill equipment adequate to respond to a significant oil spill on the west coast. This means that in the already unlikely event of an oil spill, response could be immediately initiated, and access to response equipment would not be delayed.
Any significant non-routine event, including both oil spills and emergencies, would require a coordinated response among national authorities, who would need full awareness of Project-specific emergency planning provisions. In recognition of this, a contingency committee was created in 2000 to oversee emergency planning in mineral and petroleum projects. The committee represents the key organizations that would be implicated in the event of an emergency, including the police, Danish High Commission, Department of Health, Department of Environment, the national contingency committee, the Danish Maritime Authority, and the navy. In the context of a major event, the
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 x committee ensures that relevant parties remain updated on the situation and that response is undertaken in a coordinated way, incorporating the capacities of all parties.
The contingency committee would be provided with the opportunity to review and comment on the health and safety plan of the Project. Training and emergency response simulations will ensure that the relevant personnel at both state and company level understand procedures in the event of an emergency, and gaps in capacity can be identified and addressed in advance of an actual event.
THE PROJECT
Capricorn has a working interest in a total of eight exploration licences off the south and west coasts of Greenland, although the current drilling programme and the remit of this SIA is concerned solely with the planned exploration programme in Block 1, Sigguk . The drilling programme is planned to take place over four months, with a two month contingency for relief well drilling in case of a major unplanned event (see Table 2 below).
Table 2 Outline Drilling Schedule
2010 May June July August Sept Oct Nov Dec
Mobilisation
Drilling (4 wells)
Relief Well
The programme will involve the drilling of four wells, with the possibility of drilling up to a further two wells in the same block within the existing project schedule should initial drilling go faster than expected and if it proves operationally worthwhile, and pending additional environmental approvals.
The drilling programme itself will employ a range of state-of-the-art technology and operating standards to meet the challenges of drilling in the offshore Arctic environment. Two mobile offshore drill units (MODUs) (Figure 8) will be employed in order to provide a high degree of operational and safety contingency. A number of vessels will be employed to provide support and emergency cover for the operations, including supply boats, support vessels and ice breakers. A ‘wareship’ will provide offshore storage and contingency accommodation off the coast at Aasiaat, with helicopters and fixed wing aircraft used to transfer personnel to and from the field area, the support facilities and the international airport at Kangerlussuaq. Existing onshore facilities at Nuuk, Aasiaat, Sisimiut and Ilulissat will be utilised for material lay down, helicopter operating base, handling of some wastes, supply of fuel, water and materials and limited onshore accommodation for up to 12 project personnel.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 xi The two MODUs are the Stena Forth , a modern drill ship designed to work in deep water and harsh conditions including broken ice, and the Stena Don , a dynamically-positioned semi-submersible drilling unit also designed for work in harsh environments. As both MODUs remain on station using thrusters there is no requirement for anchoring during normal operations.
Figure 8 Stena Forth Drillship and Stena Don Semi-Submersible Drilling Rig
Source: Photo courtesy of Stena
The planned drilling depths are between 3,000 and 4,000m below seabed. The drilling process uses drilling bits of different sizes to drill a series of holes from the seabed to the planned well depth. The Project plans to use only substances categorised as those which Pose Little Or No Risk (PLONOR) to the Marine Environment, or that are ranked in the least potentially harmful hazard band (Gold or E).
Rock cuttings from the drilling process will be circulated back to the drilling unit where the muds are separated for reuse and the treated cuttings are discharged to sea. Between 500 and 740m 3 of cuttings are expected to be produced from each well. Once each section of the hole has been drilled, the drill string will be lifted out and casing will be lowered into the hole and cemented into place.
If drilling results indicate the presence of hydrocarbons, the wells may be tested. Testing is used to establish reservoir and fluid characteristics such as pressure and flow rate. If required, there will be a controlled flow of hydrocarbons back to the drill unit where they will be tested and flared, which would involve periodic flaring over approximately 5 days. The likelihood of flaring being undertaken is estimated at less than 6% per well. Any flaring will require permitting by the Greenland authorities. A monitoring programme and an oil recovery vessel with full dispersant capability will be on standby throughout the process in case incomplete combustion of the flare leads to ‘drop out’ of any unburnt oil onto the sea surface.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 xii Following completion, the wells will be plugged and activities suspended. Each well will have an industry standard wellhead at the surface, with a protective cover to prevent damage to or from the wellhead due to snagging or collision with vessels, trawling equipment or icebergs. Once all wells have been drilled, the MODUs and support vessels will demobilise to their next job or home base and leave Greenland waters.
SUMMARY OF IMPACTS AND MITIGATION
The proposed exploration activity has the potential to create a variety of social impacts during the five months that it will be active. The sources identified in this assessment are typical of offshore exploration operations around the world.
As currently proposed, there are no unusual or unique sources of social impacts associated with the drilling programme. An overview of the main areas of impact, related operations and mitigation measures is shown in Table 3 below.
Overall, the drilling programme is predicted to have a slightly positive social impact for Greenland. Negative social impacts are predicted to be not significant or minor, and most of these impacts will be managed through standard operating procedures.
The main reasons that the drilling programme is predicted to have minimal negative social impacts are that
• Most of the drilling activities are located at significant distance (approximately 150 kilometres offshore) from existing Greenlandic communities; and
• The Programme is of a very short duration (five months).
For many of the same reasons, the Programme is not anticipated to have a large and positive social impact. Although some economic benefits are anticipated for Greenlandic enterprises, notably for Air Greenland, Royal Arctic Line and their suppliers, local employment effects will be muted because the ships and crews will be mobilised from outside Greenland. Other opportunities for business development are likely to be limited to purchases of fuel, water, food and some consumables to support the drilling operations.
Opportunities to enhance the positive social impacts of the exploration programme, for example through training, are limited by its short time frame and the specialist nature of the work. These limitations could change if the current exploration programme is successful and leads to long-term development of offshore hydrocarbon resources, which is outside the remit of this current assessment.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 xiii Table 3 Summary of Main Impacts, Significance and Management Measures
Potential Source/significance of Management Measures Impact impact Local One direct recruit and • Consideration given to recruiting Greenlandic labour if employment support for existing current staffing arrangements change. Greenlandic jobs in • Recommend undertaking preliminary workforce transportation and assessment during this phase of work to understand services. existing workforce capacity and gaps to be addressed Skills and No formal knowledge • Recommend undertaking an assessment of Greenlandic training transfer activities are training programmes and institutions to develop currently being understanding of training capacity and where support planned. could be provided if the Project proceeds to development. Commercial The 500m exclusion • Location and movements of drill rigs and associated fishing. zone around drilling vessels will be communicated to fishing and other operations and vessel vessels in the area with a dedicated communication movements to and from programme; the exploration area. • Designated vessels will monitor the exclusion zones and ensure that any approaching vessels are guided away from the rigs; • The drill ships and support vessels will be illuminated as required under the Navigation Act • Safety protocols will be established for radio communication with vessels entering the safety and security zone around the drill ships. • Recommend that Project vessels that could come into contact with local boaters have access to a Greenlandic speaker to ensure effective communication. Whale Drilling activities could • Area within which whales could be affected is expected Hunting disrupt whale to be limited movements in the area • Further consultation will be undertaken to determine if the potential impact on whales can be monitored during the period of operations.
Greenlandic Purchases of goods and • Air Greenland and Royal Arctic Line are expected to be enterprises services from contracted to provide transportation, supply, storage Greenlandic enterprises and support services to the exploration operation. • Local purchases of accommodation, foodstuffs, water, fuel and other supplies will be prioritised. Tourism Exploration related • No exploration related activities to take place in tourist activities in tourist areas. areas. • Accommodation of onshore workers will provide business to tourism and hospitality enterprises Housing Living and • Drilling crews will be accommodated offshore with no accommodation impact on municipal housing. arrangements for • Onshore workers (up to 30 aircrew in Ilulissat and 12 drilling crews operations personnel in Aasiaat) will stay in hotels, with no added pressure on municipal housing. • Contingency accommodation arrangements for delays in transfer of offshore workers will be provided by the wareship moored in Aasiaat and existing accommodation facilities in Kangerlussuaq, preventing unplanned presence of large numbers of offshore workers in Greenlandic communities.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 xiv Potential Source/significance of Management Measures Impact impact Port Supply boats entering • Early and ongoing consultation with local authorities facilities port at Sisimiut may and other key stakeholders. displace other shipping • A schedule of regular vessel movements to and from the port and drill ships will be provided to port administration • Recommend that the Project consider alternatives to Sisimiut port where appropriate Airport Requirement for • Early and ongoing consultation with local air traffic services increased capacity at authorities and other key stakeholders Aasiaat could deprive • A schedule of regular scheduled flights to and from key other towns of air airports in Kangerlussuaq, Ilulissat and drill ships will traffic controllers, be provided to air transport authorities needed to keep airports open and operating Emergency Limited local capacity • Oil spill response equipment will be stored in Greenland response for emergency to allow immediate mobilisation to respond to a structures response, potential that significant spill offshore west Greenland. services could be • National structures will be engaged in health and safety overwhelmed planning for the Project, including drills. Local Interaction with drilling • Contact between drilling crews and Greenlanders will culture and crews be minimised by maintaining crews at sea for the community duration of the drilling programme. • Crews will be transferred directly between drill ships and airport at Kangerlussuaq
The management measures outlined in the SIA have been developed from extensive industry experience with offshore exploration drilling, and are tried and tested. Furthermore, the management systems required to implement the measures are well understood and known to be effective. Every attempt has been made to ensure positive social impacts for Greenland from the exploration programme and there is a high level of confidence that potential negative social impacts can be successfully minimised through the implementation of the management measures outlined above.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 xv