The lack of a clear environmental mandate that clarifies how roles and responsibilities will be shared among the Ministry of Environment, Science and Technology (MEST), the Environmental Protection Agency (EPA), the Ghana Maritime Authority (GMA) and the Ghana National Petroleum Corporation (GNPC) is inhibiting consistent and reliable implementation of environmental regulations and governance in the oil and gas industry.
The lack of coordination between these entities creates confusion for players in the sector as to what expectations to follow and duplicates the efforts of government.
These are the main conclusions of a research initiated by MEST and funded by Kosmos Energy to ascertain existing environmental concerns, and assess the capacities of environmental agencies to regulate and govern environmental-management aspects of oil and gas exploration/ production in ways that meet world-class standards.
The research report, titled “Capacity Building Needs Assessment and Development Plan for Environmental Regulation and Governance of the Oil and Gas Industry in Ghana,” notes that if environmental governance in the industry is not addressed, the environmental liability costs will ultimately outweigh the economic benefits of oil production over time.
The report said an analysis to determine which government agencies are responsible for some 16 selected functions revealed “unclear mandates and significant overlap of perceived responsibilities for environmental governance and regulation of the industry.”
Though government is developing regulatory initiatives and a world-class waste-management facility for the oil and gas industry, they are yet to be completed. Additionally, insufficient inter-agency coordination and an under-developed government system for emergency preparation and response are notable lapses in the environmental governance of the industry.
It also found that the agencies are inadequately resourced, and lack the requisite training, equipment and tools to be fully effective in the discharge of their responsibilities.
It warned that “these conditions limit the extent to which the Ghanaian government can benefit from a benchmark regulatory and governance framework that sets clear expectations, ensures consistent and transparent enforcement, and engages the regulated community as well as the affected public in decision-making.”
The Minster of Environment Science and Technology, Sherry Ayittey, has noted that “oil and gas must not be seen as an enclave but considered in terms of their linkages with other national priorities such as biodiversity conservation and waste-management.”
She has advocated a synergy in the development, management and stewardship of an environmental governance system that is all-inclusive.
The report recommends the clarification of the environmental management mandate, roles and responsibilities among agencies, and more efficient inter-agency coordination. It also calls for the training of the human-resource base of the agencies concerned to meet the clarified mandate and responsibilities, as well as improve information-management.
Earlier in the year, Kosmos Energy was fined GH¢40 million for the spillage of 592 barrels of oil from three separate drilling units, with the highest being 584 barrels and the lowest, one barrel.
Officials of the company explained that the spillage happened to be Oil Base Mud (OBM), one of two types of mud systems used in drilling processes worldwide.
Kosmos holds a 23.49 percent stake in the 1.6 billion-barrels-of-oil-equivalent (bboe) Jubilee field, with its stakes valued in excess of US$4 billion.
Though experts said the actual number of barrels of discharge was relatively insignificant, the incident raised early questions of Ghana’s preparedness to prevent/manage oil-related disasters.
Analysts have also pointed to the country’s poor environmental management in the mining sector, where most communities, apart from the poverty they continue to endure, have been devastated by the harmful environmental impacts of mining activities.
Just as mining, any severe episode of oil spillage or other environmental calamity in the oil sector could hurt the livelihoods of fisher folk and coastal dwellers, and harm the health of people living in affected communities. It would also impose significant costs of recovery and amelioration.
The report noted in particular that despite ongoing initiatives, clear regulations — tailored to the Ghanaian context — that stipulate offences and specific sanctions or penalties for actions that imperil or harm the environment have not yet emerged to provide guidance to regulators and the industry.
Yet Ghana is one year into oil production, with some 17.42million barrels drilled and exported as of September 2011. In addition to oil, there are severe risks associated with the management and utilisation of gas resources — an area where there are useful lessons to be drawn from the experiences of neighbouring Nigeria.
Environment Minister, Sherry Ayitey, assured that the National Environmental Policy that is under review will incorporate the recommendations of the MEST-Kosmos research in order to provide a clear direction for managing the environmental aspects of the oil and gas industry.
With the institutionalisation of a world-class environmental regulation/governance system and clearly defined management and stewardship structures, players in the industry would have clear guidelines that will govern their operations and ensure the sustainability of the environment.