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Understanding Biodiversity Protection Opportunities in the Oil and Gas Industry John Candler P.E. 1 The Basics 2 The past……… We should drill at this location, the geology department says it looks like a promising new reserve! What about the environmental department? Are there any endangered species? What will they say? Don’t worry about those guys they will just have to make it work out. 3 The future…? We should drill at this location, the environmental department says it looks like its outside the new habitat reserve! What about the geology department? What will they say? Is there any oil or gas? Don’t worry about those guys they will just have to make it work out. 4 Definition: Biodiversity The term biodiversity, short for biological diversity, The Convention on Biological Diversity (CBD). The CBD defines biodiversity as: “The variability among living organisms and the ecological complexes of which they are part; including diversity within species, between species and of ecosystems.” 5 Source: Shell.com Location of biodiversity resources: Photosynthetic activity on land Source: World Atlas of biodiversity 6 Location of biodiversity resources: Flowering plant family diversity Source: World Atlas of biodiversity 7 Location of biodiversity resources: Current forest distribution Source: World Atlas of biodiversity 8 Location of biodiversity resources: Vertebrate family density Source: World Atlas of biodiversity 9 Location of biodiversity resources : Combined country level biodiversity resources Internationally protected areas over 100,000 ha 10 Source: World Atlas of biodiversity 11 Some regions with high oil production also have areas of high biological diversity 12 Regional location of biodiversity resources 13 Regional location of biodiversity resources 14 Regional location of biodiversity resources : Marine biodiversity resources 15 Protected Areas identified with yellow points Sourrce: Caribbean IPIECA IMAPS Why is it important? From a global perspective: – Biodiversity is fundamental to our existence. We depend on it for almost every aspect of our lives – Scientists have catalogued 1.75 million species but estimate that there are still millions more yet to be identified – These future options for biodiversity, and humankind’s possible use of it, drive many to argue that we should be cautious about how we manage and use it. From an E& P Business perspective: – Protecting biodiversity is crucial to the future of our operations. – Legal and regulatory requirements, – Strategic, operational, reputation and financial reasons – Recognition and reputation as a responsible operator build trust with regulators and key stakeholders. 16 Source: Shell.com Why worry? Much of the Earth’s great biodiversity is rapidly disappearing, Earth is now faced with the most severe extinction episode since the event that drove the dinosaurs to extinction 65 million years ago. Species are being lost to extinction at estimated rate of three species every hour. 17 Source:"Biodiversity," Microsoft® Encarta® Online Encyclopedia 2004 Shell.com What is being done by society? The world has responded to the possible loss of biodiversity and taken action Before governments, non-governmental organizations (NGO’s) grew aware of the issue. NGOs focused on biodiversity conservation. – World Conservation Union (IUCN) – World Wide Fund for Nature (WWF) Source Shell.com 18 IUCN: Protected Area Management Categories : CATEGORY Ia: Strict Nature Reserve: protected area managed mainly for science CATEGORY Ib Wilderness Area: protected area managed mainly for wilderness protection CATEGORY II National Park: protected area managed mainly for ecosystem protection and recreation CATEGORY III Natural Monument: protected area managed mainly for conservation of specific natural features CATEGORY IV Habitat/Species Management Area: protected area managed mainly for conservation through management intervention CATEGORY V Protected Landscape/Seascape: protected area managed mainly for landscape/seascape conservation and recreation CATEGORY VI Managed Resource Protected Area: protected area managed mainly for the sustainable use of natural ecosystems 19 Source: www.unep-wcmc.org Why should you care about IUCN categories? The ICUN passed a recommendation at its 2000 Conservation Congress. It called upon governments to prohibit mining (including oil and gas operations) from protected areas in ICUN categories I-IV Source SPE : 86577 20 IUCN: Protected Area Management Categories : CATEGORY Ia: Strict Nature Reserve: protected area managed mainly for science CATEGORY Ib Wilderness Area: protected area managed mainly for wilderness protection CATEGORY II National Park: protected area managed mainly for ecosystem protection and recreation CATEGORY III Natural Monument: protected area managed mainly for conservation of specific natural features CATEGORY IV Habitat/Species Management Area: protected area managed mainly for conservation through management intervention CATEGORY V Protected Landscape/Seascape: protected area managed mainly for landscape/seascape conservation and recreation CATEGORY VI Managed Resource Protected Area: protected area managed 21 mainly for the sustainable use of natural ecosystems Source: SPE 86577 Issues with IUCN protected areas ICUN has been advocating a global system for classifying protected areas Some organizations are using the categories to determine land use options and push companies to adopt the ICUN 2000 resolution and make blanket prohibitions about where they will not operate. This was not the intent of the categories If the system is to be taken up by governments and provide a level playing field it will need to be modified The categories could be strengthened by introducing a consistent, open, transparent and inclusive process involving key stakeholders such as local communities, government agencies, and industry. Just as NGOs are stakeholders about energy projects, industry should be seen as a legitimate stakeholder in designation of protected areas. 22 Source: SPE 86577 Key threats to biodiversity Habitat loss Changing land use Over harvesting/exploitation Alien species Pollution Climate change Human population growth The potential threat from oil and gas development – Long-term energy scenarios show global energy demand expecting to triple or even quadruple by the year 2050. A significant portion of this demand is expected to be met with oil or gas. Source: Shell.com 23 Biodiversity and the oilfield 24 Impacts of the oil and gas industry Oilfield range of negative direct impacts on species and ecosystems, such as: – Soil, air and water contamination, – Habitat fragmentation, – Deforestation and erosion. Oil and gas development in undeveloped areas can also indirectly lead to further secondary impacts, resulting in: – Immigration and spontaneous settlement, – Land conversion for agriculture, – Building of infrastructure. Many of the direct primary impacts of an oil or gas project can be reduced (if not fully overcome) through careful management and technology. Some of the secondary impacts present a larger challenge to industry and to society as a whole. 25 Source Shell.com Industry management techniques to enhance biodiversity Address biodiversity issues early on Consult with biodiversity experts Integrating biodiversity into the impact assessment process Carry out Biodiversity Baseline Assessment and Monitoring Studies Following up impact assessment with management systems Build biodiversity into performance monitoring Establishing a Biodiversity Working Group Providing communication tools to help raise internal awareness 26 Source:Shell.com Methods of advancing biodiversity protection on a project basis Minimize discharges Minimize Foot print Minimization of habitat disturbance, Creating new habitat to offset habitat taken during operations, Prevention of introduction of invasive species, Restricting development of new areas through controlled access. 27 Source Shell.com Two visions of current oilfield practices Bp.com The Wilderness Society 28 Habitat fragmentation as a function of roads servicing an oilfield Direct impacts 4% 250 Ft zone = 52% ¼ mile = 97% 29 Case histories of biodiversity management in exploration and development projects 30 Case histories of biodiversity protection Management of E&P operations in mangrove ecosystem (Indonesia) Management of pipeline installation. (NW shelf of Western Australia) 31 Indonesia case history Operational situation: – – Operating production operation in dense mangrove area for 30 years. Operations cover 2% of the delta plain areas. – – 5 districts, many villages, 50,000 total inhabitants. Previously used trawl nets from fishing that were prohibited in the 1980’s Social situation: Population switched form fishing to shrimp culture in the 1980’s culture. Currently have 73% of the mangrove system in shrimp culture. Biodiversity challenge: – – – – In the last decade, rapid increase of local population and deforestation due to shrimp culture development. Impacts to the mangrove ecosystem have caused degradation of water quality, decreasing shrimp and fish productivity ,increasing occurrence of disease on shrimps, increases in erosion, coastal abrasion. Land disputes with shrimp farmers. In the occurrence of increased shrimp disease and decreasing harvest the local population had a tendency to place blame on the exploration and development operation. 32 Indonesia case history Operational management steps: – – – – Minimize land clearing for operations Re-vegetate cleared land Conduct shrimp pond training for local population Construct shrimp pond pilot project that preserved mangroves Management of social environment – – – – Participate in community development Develop system for management of environmental claims Promotion of community environmental awareness Involvement of local community in exploration and development operations. 33 Indonesia case history Results of management efforts: – The programs have been successful and the relationship between the company and the community has improved. – Through participation in environmental awareness the local community has gained knowledge in the methods of sustainable management of shrimp culture activities and mangrove preservation. – Besides being involved in monitoring process the local community are also employed in the E&P industry according to their skill level. Conclusion: – E&P operations in sensitive social and mangrove ecosystem requires an integrated approach to minimize social and environmental impacts. – The actions take have also improved communication with communities as well as solving disputes and claims. 34 Source: SPE 56578 Offshore Australia case history Operational situation: – Lay two pipelines in the North West Shelf of Western Australia – Use of barge with 8 anchors to lay pipe Biodiversity challenges: – Sensitive coral resources 237 sensitive seafloor areas along first pipeline route, 1,150 sensitive seafloor areas along the second pipeline route 35 Offshore Australia case history Management steps: Novel application of remote sensing data. Development of effective method of mapping seafloor resources using GIS system Extensive route planning that considered avoidance of sensitive areas. Innovative anchor management system Computer navigation system for barge. Real time diver monitoring of anchor locations Development of monetary incentive program for contractor measured against a numerical target for damage to coral areas. Awareness training for operational personnel 36 Offshore Australia case history Results of management steps: – After 786 anchor moves: – 2 our of 237 areas slightly damaged on first pipeline route. – 2 out of 1,150 areas slightly damaged on second pipeline route Conclusions: – By demonstrating through performance that the industry can preserve the natural environment the regulators and wider community are provided confidence that the petroleum industry can contine to develop oil and gas resources in sensitive marine environments. Source : SPE 86581 37 Additional opportunities in the oilfield Waste minimization Beneficial reuse of drilling fluids and cuttings Use of directional and extended Reach drilling Management techniques for reduction of road impacts 38 Directional and extended reach drilling Specifically identified and Promoted in the National Energy Policy Chapter 5 “Energy for a New Century” 39 Beneficial reuse of drill cuttings Bean Study Biomass 7 Biomass (g) 6 5 4 3 2 1 0 top soil agriculturally active non-agriculturally 10% treated active diesel cuttings in topsoil Soil Types 0% 10% Treated cuttings 25% Treated cuttings 40 Conclusions The issue of biodiversity is going to become increasingly important to E&P operations. Operators are currently developing technology and management systems around the world that allow for E&P operations in sensitive areas will mitigate impacts on biodiversity resources. Biodiversity protection can have many pathways Taking a seat a the table with NGOs to become more a part ( camel usage to monetary incentives for contractors) of the solution and less a part of the problem will result in a greater long term business success. 41 Conclusions Ignoring biodiversity issues and failing to integrate biodiversity protection measures will result in: – Degraded company reputations – Aggressive efforts by NGOs to stop all drilling and production efforts in disputed regions. – Damage to biodiversity resources for future generations. 42 The future We should drill at this location, the environmental department and the geology department both say it looks good! The environmental department has a biodiversity protection plan in place. The geology department has identified promising reserves at this location. 43 Final Thought 44