Four major international oil companies joined with five conservation-oriented nongovernmental organizations (NGOs) to form the Energy & Biodiversity Initiative (EBI), a collaborative group that has developed industry guidelines for integrating biodiversity conservation into all upstream oil and gas operations from initial site selection through final decommissioning.
The group's members include BP PLC, ChevronTexaco Corp., Statoil ASA, Shell International Ltd. of the Royal Dutch/Shell Group, Conservation International, Smithsonian Institution, Flora & Fauna International, Nature Conservancy, and IUCN-The World Conservation Union, which has 78 governments, more than 110 government agencies, and more than 730 NGOs among its worldwide affiliates.
Their collaborative report, Integrating Biodiversity Conservation into Oil and Gas Development, contains guidelines for building biodiversity protection into the entire spectrum of upstream operations. Biodiversity encompasses all life on earth at the genetic, species, and ecosystem levels. "It also includes the processes that link these levels together and enable them to function," said EBI.
The group plans to make the first public presentation of its principles, guidelines, and suggestions at the World Parks Congress in Durban, South Africa, Sept. 8-17, said Assheton Stewart Carter, director of energy and mining at the Center for Environmental Leadership in Business, a division of Conservation International that was created in partnership with Ford Motor Co., in Washington, DC.
"This marks the first time that guidelines highlighting biodiversity have been produced for the oil and gas industry, especially at this scale. This also marks the first time that this type of multiorganizational collaboration has taken place—both inside and outside of the oil and gas industry," said EBI officials. That four major international oil companies "chose to sit down together" to help develop those guidelines "is also unique," they said.
The EBI report is not a completed plan but a work in progress, to which other energy companies and environmental groups can contribute. "We plan to work closely with the International Petroleum Industry Environmental Conservation Association and the International Association of Oil & Gas Producers to disseminate the guidelines throughout the industry," said Carter.
EBI grew out of a 3-year effort by Conservation International to promote a dialogue between the oil and gas industry and environmental groups in hopes of developing guidelines for environmentally safe field operations that would be acceptable to both sides as "practical tools," he said.
The group of environmental and industry representatives that drew up the proposed guidelines was intentionally small. "We had to work with companies and groups that were willing to participate in a dialogue with each other, and the group had to be small enough to come together for discussions," said Carter. However, he says he hopes that the proposed standards will be improved through additional discussion among a broader mix of companies and organizations.
Guidelines proposed by EBI should help producers "ask the right questions" about the potential environmental impact of their planned operations and help them "make the right decisions," said Carter.
"The practical side is that [the program] is built around risk management and a company's reputation" for environmental safety, he said. The program's "strongest point" is that the proposed guidelines were not dictated by either side but rather agreed upon by both groups, based on years of experience and scientific study.
Participating environmental groups recognize the industry's need to broaden its search for new oil and gas resources to satisfy growing global demand, Carter said. However, environmentalists are anxious to avoid disrupting the most sensitive areas rich in bio-diversity, where the ecosystem, when once disturbed, is slow to regenerate.
In its initial report, EBI acknowledged "oil and gas operations are often not the biggest threat to biodiversity in an area."
However, Carter said, "The oil and gas industry is a pioneer industry in that it is often the first to explore new frontiers. It therefore has a responsibility to set the precedents of how to do so in an environmentally safe manner. This industry is a creative, innovative force. Give its engineers a problem, and they will solve it.
"We're not talking so much about the direct impact of clearing a site for one rig, he added. "That is not too important in the big scope of things." Primary impact from industry projects is limited to the area and lifetime of those projects and often can be alleviated through sound operational practices.
Secondary impacts
"The industry seems to have made great strides in developing the technology to minimize risks to the environment," Carter said. "But more complex are the secondary ecopolitical factors beyond the industry's control."
More-destructive secondary impact might come from settlers who use a cleared pipeline pathway to move into a previously inaccessible rainforest, where they use slash-and-burn methods to clear the land. "Although it may be difficult to determine who is responsible for addressing and mitigating secondary impacts, they are just as likely to stop or disrupt a project as primary impacts," EBI reported. "It is important for companies to identify the potential for secondary impacts early in project planning and work closely with governments, communities, and other local stakeholders to address the underlying causes."
A collaborative effort between environmental and industry groups could mitigate such potential threats to both the environment and industry projects. Industry can't provide from within all of the necessary expertise to address environmental, social, and political issues, Carter said, "So it must try to find a partner with whom to collaborate and work with local authorities."
He sees the industry as "more open" to building a coalition with environmental groups today. Both sides were "more reserved" in their dealings with each other just 3 years ago, but dialogue has helped to build trust—at least among EBI members.
Addressing broad issues
More important, Carter said, the oil and gas industry is now more sophisticated in its understanding and acceptance of a broader social responsibility to its host country, the local populace, and the global environment. This includes its ability to address a broader range of corporate governance issues.
EBI sees biodiversity conservation as "an integral component of the goals of sustainable development"—an issue that both BP and Shell have embraced through corporate benchmarking policies.
"Many companies have begun to integrate biodiversity conservation into their internal business practices and operations for practical business reasons, as well as moral reasons, because they view it as simply the right thing to do," EBI reported.
"Addressing biodiversity issues at the project level can help a company reduce operational risk and execute projects more effectively, enhancing both company reputation and the ability to access key business resources, such as land, oil and gas resources, capital, employees, and public goodwill," it said in its report.
"On the other hand, poor performance on the ground can result in costly project delays and damage to a company's reputation on biodiversity issues, ultimately leading to a loss of access to resources required for meeting long-term business objectives."