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.'"