Approach to Oil and Gas Development - Essay Example

? THE ROLE OF NGO’S AND GOVERNMENTS ON OIL DEVELOPMENT by of the of the of the School 30 March 2013 Introduction There are selective nations that are currently holding large oil and gas reserves across the world. In Venezuela, Saudi Arabia, some western countries in Africa, Canada, US, Russia, Middle East nations such as Kuwait and Iran among others (Roggenkamp et al, 2012), the governments have a role to play in the development of the gas and petroleum industry, and ensure that the nations obtain maximum benefits economically and socially, under safe leadership of the nations’ environmental concern and natural resources. First of all, development of oils and gas reserves involve the not only the governments alone, but the land owners and the involved private organizations dealing with well development after exploration, production, and refining before distribution. The governments do not have to seek advice from outsiders in addressing the issues to do with land that may arise between the land owners and the oil industry, because the rules and regulations lie within their local to the federal government power. With respect to the land use management practices within the oil and gas industry’s established scope of regulations, the landowners can be compensated for the intended activity to occur. International Approach to Oil and Gas Development International bodies and government have been concerned with regulating oil and gas exploration and production. The United Nations Environmental Programme is concerned with encouraging environmentally safe industrial development (E & P Forum/UNEP, 1997). The Industry and Environment Office of the UNEP advocates for environmental ethics inclusion in industrial development, supports aggressive approaches to environmental protection, and encourages global information exchange. In 1974, organizations in the petroleum industry and oil companies formed a global association known as the E & P forum (E & P Forum/UNEP, 1997). Under the forum, the interests of governments, UN specialist agencies and other foreign bodies are represented. Consequently, industry guidelines, checklists, and codes of practice have been developed and information disseminated to the relevant nations, industry positions on issues have been established, and the activities of relevant organizations have been and continue to be monitored. Outsiders Advice to Governments of Oil or Gas-Producing Nations Over the past decades, there have been profound development issues raised regarding the oil and gas industry over the percentage of ownership, regulations effects, and the management. Most oil and gas producing nations own the resources, issue the licenses for development activities, and engage in monitoring and control of the process and production. However, most emerging nations with resource reserves have to seek advice on the way forward to finance and manage oil and gas activities. This touches on legal advice, sector restructuring, standard regulations with respect to international environmental and countries’ internal laws, fiscal and contractual services, and privatization where needed (Wawryk, n.d.). The governments should not shy away from seeking advisory services right from upstream, midstream, to downstream because it lowers the cost of production on the governments side, while avoiding to strain the public sectors. The most important factors lie in the domain of legal and business issues that deal with strategic transactions and environmental policies. With respect to the recent trend in environmental degradation, the developing world, which holds the largest proved oil reserves has been reported to have ineffective environmental laws; hence in their endeavor in development of gas and oil reserves, the governments have to enquire from the standards and operating practices across the globe, to plan ahead and implement correct measures to minimize environmental damage in their resources development (Wawryk, n.d.). Most of these environmental policies are developed by the non-governmental and intergovernmental organization, world conservation unions, and other oil industry association bodies. External advisers from the oil and gas industry also offer the governments’ considerable information over the available technologies that aid the oil and gas reserves identification, development, and production, while improving conservation of the natural resources and environmental protection. Depending on the delineation wells, investment, regulations in place, and economic situation among other factors, the external bodies advice the governments on the development projects. They seek to understand the exploration and drilling technologies such as 3D seismic, the old vertical drilling techniques, modern horizontal, multilateral, extended reach, and complex path technologies, which can be more effective in resources recovery and ensure economic gain for the involved stakeholders. According to Bariyo, “the Ugandan government has hired U.S.-based investment firm Taylor-DeJongh to advice on the construction of a $2 billion oil refinery” (2013). It is also essential that governments get to enquire of the exploration, development, production, distribution, and marketing rights and agreements between the contractors, investors, stakeholders, and governments in other nations, before engaging in any agreements. This would help the government get a clear understanding or evaluation over the distribution of the revenue generated, and the taxation method to prevent price inflation and conflicts within the nation and parties involved. Although most governments struggle with external debts, the revenue generated from the oil and gas industry should be heavily intended on settling their debts, but put effort at ensuring nation’s development without overspending. Company Support in Development of Local Communities Oil and gas companies may bring positive or negative impacts in an environment they operate; hence they need strong collaboration with both the government and the local communities to overcome any disruption in the resources activities. The first support is employing and training the local people to work in the companies instead of in sourcing skilled labor from abroad (IPIECA, 2013).. The people from the local communities who lie idle get engaged in productive work that can give them an income, sometimes better that what the public sector can offer them. Hiring the workers not only trains the unskilled, but boosts the lives of the local communities for the better. The training improves education among the people, who can get to serve in higher positions in the company, ranging from management to technical work that is available. The companies should buy the supplies and services locally to promote enterprise development in the regions, and also help in accelerating the transfer of advanced technologies and skills in a local content (IPIECA, 2013).. Engineering, construction, and other operational services can be provided by the skilled personnel within the regions, as they perfect based on experience. The local businesses could also get contracts for the supplies of materials needed in the industry, especially when it comes to hardware and than software. Companies could also set up small organizations to develop their supplies within the local area they operate in, if the supply need is not available within but abroad. Supporting community development works involves them in the community welfare by identifying the potential benefits of the local communities, and promoting them for sustainable social value. They can implement the social and community investment programmes targeting on factors like health care, drilling boreholes, and education to yield long term community benefits, either by establishing their own foundations, partnering with the local specialized community development departments, or contract national NGOs (IPIECA, n.d.). Like any other business, the companies need strong and established communities, hence they try to address some challenges facing the communities, which ought to be handled by the host governments. Supporting energy development, upgrading roads and infrastructure, and sometimes compensating the displaced individuals in the communities are some activities that the companies burden themselves with, though they are government roles. They do not replace the role of the government, but work to make a difference in the local setting to benefit the people, government, and their daily operations. Responsibility for Environmental Management Environmental degradation is one major source of conflict between the local communities and the oil and gas companies, emanating from oil spillage that affects farmlands and sea water that most communities depend on, noise and air pollution due to heavy activities, and the harmful flaring gases respectively. The governments and oil companies have made efforts to implement environmental regulations within their reach to prevent damage to resources that people use, the wildlife and the habitats. These regulations have been effective in developed nations unlike the developing countries, because the management organizations have been weak, at times corrupt to deny the communities right to a safe environment. Even with the much effort, little has been done and certain factors like accidents, which heavily contribute to environmental pollution, cannot be completely prevented in production and distributions of the resources to the consumers. Some governments have effective regulatory framework, but lack sufficiently organized administrative structure, human and financial resources for effective regulatory compliance, enforcement and governance (Alba, 2010). Right from exploration and development, the government makes consultation with oil and gas industry specialists in experienced and developed nations, on the use of environmental friendly technologies in the companies, and upgrading of the technologies, though expensive but safer for the ecosystem especially in refining and pipeline distributions. Such technologies can reduce high consumption of resources, reduce environmental damage in oil and gas activities, and comply with the standards of the environmental law. Some environmental issues cannot be solved by compliance alone, but should involve proper management, which can be achieved through environmental training on policies, legislation, waste control, and general pollution prevention, from a practical point of view for application in a government’s oil and gas companies, in support of international environmental law. Foreign specialists advice governments on engaging in consistent trainings and workshops, to improve the countries capacities in monitoring and follow up to enforce compliance to environmental conservation policies. The NGOs have been partnering with the governments of oil producing nations or companies to aid in environmental cleanup, with transparency and cost effective means open to the public. They have aided in the determination of decision making with respect to the public interest, and without favoring the involved parties on issues of green house gas emissions, water, and air quality. They also engage local governments, to prevent reaching agreements over environmental management that would contradict the international environmental laws (like acts that address, water, air, energy, negligence, waste disposal, storage, use of surface for resource developments, damages, nuisance, and other miscellaneous issues)with local ones (E &P Forum/UNEP, 1997). Conclusion Although NGOs have had a contentious relationship with oil and gas companies, they have progressively advised the governments on environmental management, engaged in project consultation, and community development. They have always applied the rule of transparency, ensuring projects and financial information disclosure to the government and the general public (eisourcebook.org, n.d.). They offer the concerned parties, consultation services, partnerships, and expertise in environmental management planning and implementation, deliver information on environmental safety, and enforce accountability for the oil and gas companies. Reference List Alba, E. M., 2010. Environmental Governance in Oil-Producing Developing Countries. [Online] available at: http://siteresources.worldbank.org/EXTOGMC/Resources/336929-1266963339030/eifd17_environmental_governance.pdf [Accessed 30, March 2013]. Bariyo, N., 2013. Uganda Hires US Firm Taylor-DeJongh to Advice on Oil Refinery. [online] Available at: http://www.downstreamtoday.com/news/article.aspx?a_id=38740&AspxAutoDetectCookieSupport=1 [accessed 29 March, 2013]. eisourcebook.org, n.d. Oil & Gas and NGOs: New Rules of Engagement? n.d. [online] Available at: http://www.eisourcebook.org/cms/Oil%20&%20Gas%20and%20NGOs,%20New%20Rules%20of%20Engagement.pdf [Accessed 1 April, 2013]. E & P Forum/UNEP, 1997. Environmental Management in Oil and Gas Exploration and Production: An Overview of Issues and Management Approaches. Oxford: Joint E&P Forum/UNEP Technical Publication. IPIECA. n.d. Social Development: Stakeholder Communities Prosper From Local Economic Growth. [online] Available at: http://www.ogp.org.uk/files/7113/3544/4521/ipiecaogpfactsheetsocialdevelopment.pdf [Accessed 29 March, 2013]. IPIECA. 2013. Social and Economic Development. [online] Available at: http://www.ipieca.org/topic/social-responsibility/social-and-economic-development [Accessed 1 April, 2013]. Roggenkamp, Martha M. et al, ed., 2012. Energy Networks and the Law: Innovative Solutions in Changing Markets. Oxford: Oxford University Press. Wawryk, A. S., n.d. International Environmental Standards in the Oil Industry: Improving the Operations of Transnational Oil Companies in Emerging Economies [Online] Available at: http://www.dundee.ac.uk/cepmlp/journal/html/Vol13/article13-3.pdf [Accessed 29 March, 2013]. Read More