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Oil and Gas Pipelines Social and Environmental Impact Assessment: State of the Art

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Oil and Gas Pipelines Social and Environmental Impact Assessment: State of the Art Oil and Gas Pipelines Social and Environmental Impact Assessment: State of the Art Compiled and edited By Robert Goodland Comments to: [email protected] May 2005 Robert Goodland served the World Bank Group for 25 years, retiring in 2001 as their Environmental Advisor. He is Past President of IAIA. He has published about 20 books on environment and sustainabilityof major infrastructure projects. © Robert Goodland, McLean, Virginia USA For IAIA 2005 Conference International Association of Impact Assessment 1330 23rd Street South, Suite C Fargo, ND 58103 USA www.iaia.org [email protected] 1 Contents Acknowledgments 3 Foreword 4 Chapter 1 Perspectives on the Assessment of Pipelines: Robert Goodland 5 Chapter 2 Africa 15 Case 1 Chad-Cameroon Oil Pipeline: Rosa Orellana 16 Case 2 World Bank Safeguard Policies in Four African Pipelines: Chad-Cameroon, Songo Songo, SASOL & the West African Gas Pipeline: Robert Robelus 32 Case 3 SASOL Natural Gas Project: Ensuring Environmental Quality During Project Execution: Bianca Steinhardt 45 Case 4 The West Africa Gas Pipeline: Charlie Wolfe 56 Chapter 3 South America 66 Case 5 Ecuador: Crude Oil Pipeline: Kevin Koenig & Atossa Soltani 67 Case 6 Bolivia-Brazil Gas Pipeline Project (GASBOL): George Ledec & Juan David Quintero 79 Case 7 Peru: Camisea Gas and Gas Liquids Project: Aaron Goldzimer 90 Chapter 4 Asia 99 Case 8 Baku-Tbilisi-Ceyhan Oil Pipeline: A Decade of Environmental and Social Assessment of Pipelines in the Caspian Sea: Lessons and Challenges: Ronald Anderson 100 Case 9 Russia: Sakhalin II: Behemoth with a Bad Attitude Shuns Best Practices, Riskng Billions: Doug Norlen 109 Case 10 Myanmar-Thailand: Yadana Gas Pipeline: Katharine Redford 122 Chapter 5 Environmental Review of MDB Hydrocarbon Projects: Lessons Learned from US Government Experience: Leslie Johnston & Keith Kozloff 131 Chapter 6 Conclusion: The Future Assessment of Pipelines: Robert Goodland 142 Endnotes 148 Literature cited 156 Abbreviations & Acronyms 166 List of Figures 168 2 Acknowledgments The value of this book lies in its emphasis on case studies of ten major international oil and gas pipelines. I warmly thank my hands-on practitioner friends for supplying these ten case studies. Their personal experience shines through: Rosa Orellana, Robert Robelus, Bianca Steinhardt, Charlie Wolf, Kevin Koenig & Atossa Soltani, George Ledec & Juan-David Quintero, Aaron Goldzimer, Ron Anderson, Doug Norlen and Katie Redford. Thanks to Leslie Johnston and Keith Kozloff for their helpful account about how the US Government arrives at its position on each pipeline project. I would like to thank the Netherlands Environment Assessment Commission for a wonderful experience as a member of their 2004 team working on the Baku-Tbilisi-Ceyhan pipeline. Our 17-year-old son Arthur unfailingly fixed my computer errors 24/7. My wife, Jonmin, put up with six months of silences while I grappled with the manuscript. Mary Paden of Alexandria, Virginia worked her magic in transforming the manuscript into a professional book. Warm personal thanks to all. This is my fifth, and probably last, gift of a book to the International Association of Impact Assessment, to strenuously encourage it to improve the effectiveness of impact assessment in all its forms. 3 Foreword This is the only book so far to tackle the social and environmental impacts associated with oil and gas pipelines. Now that pipeline construction is burgeoning worldwide, these fundamental precautions of pipeline project design and operation have become increasingly important. Especially useful is that this book is thoroughly grounded in detailed case studies of ten recent major pipelines in developing countries by experienced and hands-on practitioners. These pragmatic voices enhance the value of this book. The impacts of pipelines a priori should be minor. Why then are so many recent pipelines so controversial? For example, two gigantic pipelines, BP’s Sakhalin I and Shell’s Sakhalin II, have become sharply controversial and could be stalled. This book suggests that social and environmental assessments have not yet become the norm, some assessments are weak, some assessment teams try to protect the multinational proponent rather than the impacted people or the environment, and the mitigation measures provided in the assessments are not always systematically implemented. Developing countries will benefit greatly by leap-frogging the errors made by industrial countries and learning from industrial country mistakes. Following the advice in this book will greatly enhance development effectiveness, save many scarce resources, and protect vulnerable people. The Independent Extractive Industry Review of the World Bank Group's Oil, Gas, and Mining Portfolio, which I led between 2001 and 2004, recommended that natural gas be used as a bridging fuel on the tortuous and overdue path to renewable energy systems (as amplified in www.eir.org). This book clarifies how to accelerate that transition with the lowest impacts. My main message to the oil and gas industry, pipeline proponents, pipeline financiers and development colleagues is to use this book to design out the more serious impacts of your pipeline schemes, reduce any big risks, and mitigate the rest. You will end up with safer and non-controversial pipelines at greatly reduced overall cost. His Excellency Dr Emil Salim First Minister of Environment and Population, Indonesia Chair: United Nations Environment Summit, Rio de Janiero Eminent Person: The Independent Extractive Industry Review of the World Bank Group’s Oil, Gas, and Mining Portfolio 4 Chapter 1 Perspectives on the Assessment of Pipelines Robert Goodland [email protected] Editor and Compiler About the Author Robert Goodland has been involved in the social and environmental assessment of five pipelines: Thailand’s Yadana Gas, Chad-Cameroon Oil, Ecuador’s OCP, Peru’s Camisea gas, and the BTC oil pipelines. He served the World Bank Group for 25 years, retiring in 2001 as their Environmental Advisor, where he drafted and persuaded the Bank to adopt most of its social and environmental “Safeguard” Policies. He was a member of the Extractive Industry Review (2001-2004), consultant to the World Bank’s Inspection Panel, Metropolitan Chair of the Ecological Society of America, and Past President of IAIA. He has published about 20 books on environment and sustainability of major infrastructure projects. His PhD on Brazilian ecosystems is from McGill University in Montreal. 5 This book focuses on the social and environmental impacts of pipelines in developing countries. It shows the state of the art on how to prevent or minimize impacts of pipelines, and fully mitigate any residual impacts. The emphasis is on gas pipelines more than oil pipelines. The book is aimed at the hydrocarbon industry and pipeline corporations, and countries which depend on pipelines or who are contemplating a major national pipeline, as well as their environmental professionals, and the economic development community. The case studies of ten major recent pipelines show best practice in the social and environmental assessment of pipelines. Four case studies are from Africa, three from South America, and three from Asia. Ten case studies cannot fully represent the whole. Even so, practically all major or recurring issues of pipelines are covered by this case study approach. The strength of the case studies is that all are written by practitioners who were personally involved either with the assessment, or with seeing that the social and environmental precautions are being prudently implemented. As can be seen from the case studies, the issues span the spectrum on the social side from slavery (Case 10) and vulnerable ethnic minorities (Cases 1, 5, 6 & 7), through forced displacement. Pollution, climate change, biodiversity conservation, and post- construction restoration recur on the environmental side. Most impacts are fairly well known, although often inadequately mitigated. This leads to major controversies, such as the endangerment of the Pacific Gray Whale in the Sakhalin case study (Case 9). The Environmental Significance of Natural Gas More electricity is generated from coal than from oil and gas combined. The impacts of coal are so severe that any trend away from coal and towards gas will be massively beneficial to society and the environment. Emil Salim’s independent Extractive Industries Review recommended accelerating the inevitable transition towards renewable energy, while using natural gas as a bridge to that very difficult transition. Coal burning is the worst culprit in emitting GHG. Burning coal1 emits 24 kg of carbon per Gjoule, whereas oil emits 19, and natural gas only 14. More than 60 counties already have over 2000 km of pipelines (Figure 1). About 10,000 kms of new pipelines are planned for this decade, with 2500 km in 2005 alone at a cost of $27bn (Oil & Gas Journal, Feb.’05). Most of this action will be in developing countries. Natural gas looks set to become the world’s most important energy source within a couple of decades. This turnaround is a huge benefit for health and environment. Until fairly recently, gas was seen as a nuisance and was ‘flared’ and wasted. It is now increasingly piped from well to port where it is frozen into a liquid (liquefaction to LNG), shipped to markets in refrigerated tankers, where it is warmed back into gas to be injected into local pipelines. The US consumes 25% of world gas, but 96% 6 is imported from developing countries. The industry expects to invest
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