IMPROVING PETROLEUM GOVERNANCE: CONTEMPORARY DISCUSSIONS ON GHANA’S PETROLEUM ENVIRONMENTAL LAWS AND REGULATIONS - Part 1

Introduction

Ghana has enacted some environmental laws and regulations to govern environmental issues in the oil and gas sector. These laws and regulations are contained in the Environmental Protection Agency Act, 1994 (Act 490); the Environmental Assessment Regulations 1999, (L.I. 1652); the Environmental Assessment (Amendment) Regulations 2002, (L.I. 1703); the Petroleum (Exploration and Production) Act, 2016 (Act 919); The Petroleum (Health, Safety and Environmental) Regulations 2017, (L.I. 2258) among others. However, these environmental laws and regulations to a larger extent have not taken into account some international environmental best practices and have thus not being in tone with globally changing views on petroleum environmental regulations.

The most important areas in the petroleum exploration environmental governance which have not been adequately or insufficiently catered for and are not in accordance with international environmental best practices include: environmental impact assessment, water pollution, air pollution, venting and flaring, well plugging and abandonment, blowout prevention, and decommissioning and decommissioning fund.

Gaps in the Laws and Regulations and Corresponding Recommendations

1. Environmental Impact Assessment

Each phase of petroleum development, from reconnaissance to decommissioning, poses an adverse threat to the environment. Ghana’s Environmental Impact Assessment (EIA) laws are inadequate to ensure that environmental impacts from early-stage petroleum activities are fully identified and evaluated for the benefit of decision makers and the public.

As early as the reconnaissance stage, Ghana’s Petroleum (Exploration and Production) Act, 2016, permits license holders to perform seismic surveys and shallow drilling. Reconnaissance and exploration, which entails more extensive drilling and can span many years, discharge waste and pollution into the environment, threaten biodiversity, and impact local communities. Even shallow drilling is associated with the risk of well blowouts and oil spills.

The Petroleum (Exploration and Production) Act, 2016 (Act 919) declares that reconnaissance activities and exploration drilling may not begin until an operator has complied with the Environmental Protection Agency Act, 1994.  In addition, the Environmental Assessment Regulations 1999, (L.I. 1652) outlines a list of activities for which an EIA is required before the Environmental Protection Agency (EPA) may issue an environmental permit. These activities involve: oil and gas fields development; construction of off-shore and on-shore pipelines; construction of oil and gas separation, processing, handling and storage facilities; construction of oil refineries; and construction of product depots for the storage of petrol, gas or diesel which are located within 3 kilometers of any commercial, industrial or residential areas.

Under the Environmental Assessment Regulations 1999, (L.I. 1652) “oil and gas fields development” is the only provision that could possibly be construed to apply to reconnaissance and exploration activities. However, “development” is not defined in the Environmental Assessment Regulations. Although “development” is defined in Section 95 of the Petroleum (Exploration and Production) Act, 2016, the Act’s definition of “development” is narrow, and refers almost exclusively to activities carried out after a commercial discovery is made. In addition, the Act formally distinguishes early-stage activities by using the term “exploration” which encompasses drilling and other appraisal work necessary to determine whether a petroleum discovery warrants commercial development.

In the L.I. 1652, the distinction between the terms “exploration” and “development” means that an EIA is not absolutely required for early-stage petroleum activities. In practice, EPA only requests preliminary environmental reports for exploration drilling. A worrying situation is that these reports are not subject to public review or hearings.

Recommendation

In light of the environmental and social impacts associated with petroleum reconnaissance and exploration activities, particularly in the offshore environment, public participation and strict environmental review provisions must be incorporated into the process for awarding permits for these early-stage activities. The Environmental Assessment Regulations 1999, (L.I. 1652) Schedule 2 should be revised to include exploration activities. This can easily be accomplished by amending Section 12(a) to read: “Oil and gas field’s reconnaissance, exploration and development.”

In order to amend in EIA regulations to ensure that all phases of petroleum development undergo rigorous scrutiny to identify and minimize potential environmental impacts, EPA should develop a set of sector-specific guidelines for preparing EIAs. This will help improve the overall quality and consistency of EIAs for petroleum development and ensure that the full range of impacts is properly evaluated and disclosed to decision makers and the public.

It is important to note that Section 82 of the Petroleum (Exploration and Production) Act, 2016 (Act 919), which addresses impact assessment, adds uncertainty to the overall interpretation of EIA requirements. It lists six phases of petroleum development, including reconnaissance and exploration drilling, and states that none may be carried out “unless the required environmental impact statement has been conducted or any other relevant environmental statutory requirement” imposed by the Environmental Protection Agency Act, 1994 (Act 490), has been complied with.  The provision is not clearly drafted and suggests that lawmakers may have intentions for broad implementation of EIA from the earliest phases of petroleum development. To fulfill these intentions, Schedule 2 of the L.I. 1652 should be revised to clarify that petroleum reconnaissance and exploration activities may not proceed without preparation of an EIA.

My name is Kofi Anokye, a development enthusiast, and by the time I leave this world, it must be better than I found it. Brains, not natural resources, develop a nation!