The continuing expansion of extractive industries and their effect on the environment throughout the world has made the need for sound environmental assessment more pressing than ever. 

What are the issues?

In the diverse projects and plans we’ve been involved with in the past 25 years several recurrent issues have emerged:

  • High impact projects demand hi-tech expertise.
    Although oil and gas exploitation has far-reaching impacts on interconnected ecosystems and local and national economy, specific technical knowledge for assessing the impacts of oil and gas projects is often not available locally.
  • Investment projects often take place prior to policy development
    National sector strategies tend to lag behind private sector projects, and governments often have limited capacity to appraise projects, grant licences and enforce licence conditions.
  • Equity issues unaddressed
    Commonly, benefits are only reaped by a small  group, while many people are exposed to adverse effects of the projects. Compensation for individuals and communities is therefore often an issue.
  • Source of conflict and controversy
    Exploitation can generate large revenues to foster growth and reduce poverty. However, when governance is weak and regulatory capacity inadequate, the result may be poverty, corruption and conflict.
  • Oil and gas sector decency
    If conditions are clear from the outset, the sector is willing and able to apply advanced and best available technologies to minimise risks and impacts.
  • Multi-sector involvement
    Taking the interests and development potential of other sectors such as coastal management, tourism and fisheries into account at an early stage increases the chances of identifying new opportunities and balancing short- and long-term interests. This is particularly important because oil and gas exploitation usually generates short-term benefits with long- lasting effects on the social and natural environment and the economy.

Role of ESIA and SEA

ESIA and SEA can address most of the issues mentioned above. They guarantee:

  • a solid assessment of environmental and social issues
  • a well-structured public and government debate on these issues
  • a mechanism for taking the results of assessment and debate into account in decision making.

The sector can therefore benefit greatly from applying ESIA and SEA because they can enhance the legitimacy of the sector’s investments, which are usually considerable. Whereas ESIA is limited to the scope of a single project, SEA aims at nationwide development programmes, plans and policies. SEA in the oil and gas sector can help reduce risks and ensure preparedness by:

  • developing different scenarios for slow, medium or high pace exploitation, e.g. over 10, 20 or 30 years, in combination with different programmes for revenue management
  • including alternatives in pacing concession rounds and awarding production licences
  • assessing the probability and related impacts of, for example:
    • development of LNG production in the future
    • the port developments necessary to accommodate such activities and their effects
  • the need for oil/gas related waste treatment and disposal
  • developing guidance on assessing the environmental pros and cons of technological methods for:
    • gathering seismic data (air guns, dynamite)
    • drilling and testing wells (horizontally or vertically)
    • developing a newly discovered gas or oil field
      At project level too, this guidance can be used for choosing the most suitable alternatives for each set of environmental conditions (e.g. open water, near shore, near protected areas).

These and other functions of SEA are illustrated with cases from Ghana, Mauritania and Bolivia.