Biodiversity: Breaking New Ground

A Proactive Approach to Conservation

Biodiversity issues may shape the future of global exploration for the oil and gas industry.

Proponents of the industry's current biodiversity initiatives believe two things.

First, that a significant number of future exploration prospects will be in environmentally sensitive areas.

Second, that the industry's ability to operate in those areas will depend not only on politics and economics, but also on its past success in protecting biodiversity.

Or, its failure to do so.

The petroleum industry has struggled with biodiversity since it emerged as a key concept more than a decade ago.

Today, efforts center on developing formal standards and processes for work in biodiversity-sensitive areas.

Biodiversity Defined

For much of the oil and gas industry, biodiversity remains a hazy concept.

"The big point is, there's an increasing awareness of biodiversity," said Christopher Herlugson, a biodiversity specialist and senior adviser-environmental impact for BP International in Houston.

"I think a lot of people don't understand it, so they're afraid of it," he said. "It's about being smart in the way you operate."

Biodiversity can be difficult to define, even for those who deal with its day-to-day importance.

As a concept, it includes three main aspects, according to Patrick O'Brien, consulting environmental scientist for ChevronTexaco Energy Technology in Richmond, Calif.

O'Brien said biodiversity involves:

  • Species diversity — the total number of species in life on Earth.
  • Genetic diversity — "basically the complex of all genetic material available."
  • Ecological diversity — "all interactions organisms have within their environment and with each other.

"It's a very, very broad concept," he said. "The difficulty is, how do you translate that world view down to what it means to drill an oil well in a particular area?"

While biodiversity involves a new, proactive approach to conservation, it also can be seen as an extension of past environmental efforts.

"We've been doing biodiversity for a long time, just under different names. Now the industry is getting more pressure to go beyond the letter of the law in doing things that will have a positive effect on biodiversity," Herlugson said.

No one should doubt that oil and gas operations in biodiversity-sensitive areas will have an effect, according to Herlugson.

"In the extractive industries, there's always going to be an impact," he said. "Some impacts are going to be very transitory, some are going to last 30-plus years."

NGOs and Others

Identifying the major players in biodiversity can feel like swimming through alphabet soup. In the petroleum industry, two important coalitions operate through non-governmental organizations, known as NGOs.

Image Caption

Biodiversity issues may shape the future of global exploration for the oil and gas industry.
Photos courtesy of Center for Environmental Leadership in Business at Conservation International

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Biodiversity issues may shape the future of global exploration for the oil and gas industry.

Proponents of the industry's current biodiversity initiatives believe two things.

First, that a significant number of future exploration prospects will be in environmentally sensitive areas.

Second, that the industry's ability to operate in those areas will depend not only on politics and economics, but also on its past success in protecting biodiversity.

Or, its failure to do so.

The petroleum industry has struggled with biodiversity since it emerged as a key concept more than a decade ago.

Today, efforts center on developing formal standards and processes for work in biodiversity-sensitive areas.

Biodiversity Defined

For much of the oil and gas industry, biodiversity remains a hazy concept.

"The big point is, there's an increasing awareness of biodiversity," said Christopher Herlugson, a biodiversity specialist and senior adviser-environmental impact for BP International in Houston.

"I think a lot of people don't understand it, so they're afraid of it," he said. "It's about being smart in the way you operate."

Biodiversity can be difficult to define, even for those who deal with its day-to-day importance.

As a concept, it includes three main aspects, according to Patrick O'Brien, consulting environmental scientist for ChevronTexaco Energy Technology in Richmond, Calif.

O'Brien said biodiversity involves:

  • Species diversity — the total number of species in life on Earth.
  • Genetic diversity — "basically the complex of all genetic material available."
  • Ecological diversity — "all interactions organisms have within their environment and with each other.

"It's a very, very broad concept," he said. "The difficulty is, how do you translate that world view down to what it means to drill an oil well in a particular area?"

While biodiversity involves a new, proactive approach to conservation, it also can be seen as an extension of past environmental efforts.

"We've been doing biodiversity for a long time, just under different names. Now the industry is getting more pressure to go beyond the letter of the law in doing things that will have a positive effect on biodiversity," Herlugson said.

No one should doubt that oil and gas operations in biodiversity-sensitive areas will have an effect, according to Herlugson.

"In the extractive industries, there's always going to be an impact," he said. "Some impacts are going to be very transitory, some are going to last 30-plus years."

NGOs and Others

Identifying the major players in biodiversity can feel like swimming through alphabet soup. In the petroleum industry, two important coalitions operate through non-governmental organizations, known as NGOs.

One is the Energy and Biodiversity Initiative (EBI), convened and managed by the Center for Environmental Leadership in Business (CELB), itself a division of Conservation International (CI).

In addition to CI, the EBI's members are:

  • Shell.
  • BP.
  • ChevronTexaco.
  • Statoil.
  • The Nature Conservancy.
  • The Smithsonian Institution.
  • IUCN-The World Conservation Union.
  • Fauna & Flora International.

The other is the industry's Biodiversity Working Group, established by the International Petroleum Industry Environmental Conservation Association (IPIECA) and the International Association of Oil and Gas Producers (OGP).

These organizations working on approaches to biodiversity are both pro-environment and pro-development — good news for the petroleum industry.

"We don't want to put ourselves in a position that's oppositional to industry," said Assheton Carter, CI's director, energy and mining. "But we want to work on those issues that are common to both industry and conservation."

Biodiversity Initiatives

Last fall, the EBI issued an initial report, "Integrating Biodiversity Conservation Into Oil & Gas Development," which made a dozen recommendations for melding biodiversity protection with oil and gas operations.

Carter said oil companies can evaluate the report's findings and begin to refine a more global approach to biodiversity conservation.

"Large multinational companies are more likely to work on one standard across their group of peer companies, because it's very difficult to have different standards," he said.

Kit Armstrong is adviser-global policy & strategy in ChevronTexaco's Health, Environment & Safety Department in San Ramon, Calif.

She's active in both the EBI and the Biodiversity Working Group administered by IPIECA.

"The working group's current work program has been largely focused on three areas," she said. Those are developing regional workshops; trying to share best practices in biodiversity management; and promoting consideration and uptake of the tools developed by the EBI.

Herlugson agreed that oil companies need a more formal approach to protecting and fostering biodiversity.

"We are trying to put some processes in place that the industry can call on," he said. "Our stakeholders want to understand how we make decisions that will have environmental consequences."

At this point, the industry is beginning to envision an overall approach to biodiversity through studies, reports and analysis of projects in sensitive areas.

"The next stage is to make that more systematic," Carter noted.

"Over the next few years, we should start to develop biodiversity measures, metrics and performance indicators," he added, "and work out how best to report that."

Showcase Projects

Instead of relying on theoretical approaches, some companies support demonstration projects that bring biodiversity issues into the development process.

Herlugson said BP has a detailed Biodiversity Action Plan for its Tangguh LNG project in and around Bintuni Bay in Papua, Indonesia.

"Berau Bintuni Bay is a biologically diverse and physically dynamic environment located on the southern edge of the Birds Head peninsula. An old-growth mangrove stand area — globally considered as the most extensive, best developed and least disturbed in Southeast Asia, and currently proposed as a strict nature reserve by the Indonesian government — is located 80 kilometers to the east of the Tangguh site," Herlugson said.

In the 1990s, exploration found two super-giant gas fields in Papua, Wiriagar Deep and Vorwata.

When BP assessed an LNG project in Papua, it considered biodiversity effects across the Bintuni area, according to Herlugson.

The company identified several biodiversity concerns, including impacts from illegal logging and prawn fishing to the extensive mangrove stand, well outside the area influenced by Tangguh.

"It's one of the largest intact mangrove ecosystems in the world, a world-class ecosystem that's in the vicinity of our project," Herlugson noted.

He said BP has worked through the Conservation Training and Resource Centre in Bogor to develop appropriate management and protection measures for this important area.

Carter sees this extended approach as a vital part of biodiversity planning for oil and gas companies.

"It's thinking how their entry point into an area is going to affect the biodiversity linkages in the entire ecosystem. That means they have to think outside their concession," he said.

Several other oil companies are involved in projects, programs and special studies that focus on biodiversity issues.

For example, the Shell Foundation has funded a $2.8 million biodiversity project in Gabon, conducted by the Smithsonian Institution's Monitoring and Assessment of Biodiversity Program.

Biodiversity Issues

Evolving issues related to biodiversity also affect the oil and gas industry.

The most controversial might be the concept of "no-go" areas, where exploration and development of any type would be permanently prohibited.

"The problem for companies is that the protected-area system is not well-defined in terms of geography or the criteria it uses," Carter said. "Not all of these areas were set aside for biodiversity.

"At the same time," he added, "there are areas that aren't protected that are extremely valuable for biodiversity."

Companies don't want to begin exploration activity in a region, only to have it declared off-limits later because of biodiversity concerns, Carter acknowledged.

"What we've come up with in the EBI is what we call 'site selection,' a decision-making tool so companies can ask the right questions about biodiversity before entering an area," he said.

Another issue involves secondary impacts from oil and gas operations.

"Those tend to be the consequent effects that happen because an oil and gas activity is in the area," Armstrong said.

A development project may cause a large number of outside workers to relocate to an area, disrupting the local society and infrastructure.

"What some people call 'boom towns' can get created," she added. "You have people looking for food. They may be poaching. There may be deforestation."

That type of indirect effect could be secondary in occurrence but primary in importance for biodiversity planning.

The third issue reflects friction between agencies and organizations devoted to conservation and those that support development.

"There's a growing resistance to development, just because it's development," Herlugson said. "We need to educate the public."

Public agencies, NGOs and oil companies can fall into the trap of thinking that biodiversity and development are opposing choices, according to Carter.

They see a division between human and economic development, especially at the community level, and the conservation of biodiversity  — thinking that it's one or the other, that there's a trade-off," Carter explained.

"But, really, you're pushing at the same results, because the poorest people on Earth depend enormously on their natural resources," he said.

Biodiversity Scorecard

How effective is the industry's effort to deal with biodiversity concerns?

"I would say that it's beginning seriously," Carter said. "A year or two ago, I would have said it's just beginning. Now the oil companies realize they have to get serious."

"It's too early to say that the industry has moved to a more systematic approach," Armstrong agreed.

"I see some folks in the industry who decided a number of years ago that biodiversity was going to be a key corporate issue.

"There are other companies who tend to work more quietly about such things, but the movement is substantial," she added.

Then, she said, "there are companies that have not even yet begun to think about biodiversity issues."

An important step comes with bringing biodiversity awareness into the management, planning and decision-making systems within companies, O'Brien said.

"That's almost as big an effort, although not as visible, as anything else we're doing in the field," he noted.

Companies active in biodiversity initiatives have been willing to share results with the rest of the industry, and for good reason, according to Armstrong.

"Even the best can be dragged down by public perception of the worst. The leading companies have an interest in promoting biodiversity awareness among their colleagues," she said.

Carter thinks the industry will take another year to refine and begin adopting a more systematic approach to biodiversity conservation, like the one outlined in the EBI report.

"In the long term," Carter said, "companies are thinking: 'How can we demonstrate that we can be responsible actors, and not be excluded from these sensitive areas?'

"'If we demonstrate that we can extract oil and gas and at the same time minimize our harm to biodiversity — and hopefully provide some positive returns to conservation — then we're more likely to have long-term access to the land.'"