Lebanon’s progress to cultivate wealth from its offshore oil and gas resources has left us with more questions than answers. While the country will not extract any resources for at least five years, the agreements being negotiated in the next 12 months will determine whether Lebanon gets a good deal or not.

Over the course of five days, seven leading thinkers will discuss different aspects of the resources — from avoiding environmental destruction to how to spend the new wealth — each with the aim of helping provoke awareness about what is going on in this crucial period.

For our fourth segment, Ricardo Khoury argues early planning can protect Lebanon from environment catastophe. 

See also: Lebanon's Petroleum Administration makes a positive start

Avoiding a regional war over hydrocarbons

The launching of the prequalification process for Lebanon’s first oil and gas licensing round is a significant step towards the development of hydrocarbon resources in the country. But while many topics are being discussed related to the offshore finds, little is being spoken about the potential environmental impacts of the sector.

A lack of planning could lead to severe environmental and social impacts.  While most people are concerned with the risks of major oil spills that could have devastating impacts on our shorelines — although our neighbors are probably more at risk than we are because currents will mostly drive spills towards the north — there are many other issues to be dealt with and that are more certain to occur in the event of major hydrocarbon finds.

So far although a strategic environmental assessment (SEA) study has been prepared, as required in Lebanon’s Offshore Petroleum Law as an environmental planning instrument, it has not yet been disclosed to the public. Not much is known about the results of the study and whether it has provided strategic inputs to guide environmental decisions early on in the sector’s development process.

The SEA could help, for example, to guide the Petroleum Administration in designing the licensing bid and providing guidance to developing sound environmental policies for the sector. Environmental criteria could, for example, be used when deciding on the number and the geographical location of the blocks under the first licensing round.

The scale and significance of environmental impacts associated with the exploration and production of petroleum resources in Lebanon are intrinsically related to outcomes of the exploration phase of the first awarded block(s). For instance while the impacts associated with exploration activities — which may include some additional seismic surveys, drilling of exploratory wells, and establishment of on-shore support facilities — may not be significant, impacts in the case of multiple production areas (in which exploration activities revealed commercial findings of gas) could cause significant pressure on the Lebanese environment. The potential for routine and accidental damage are even higher if both gas and crude oil commercial findings are revealed.

Not quite so offshore

If commercial findings are made, the infrastructure required to transport, process, store and offload hydrocarbon finds range from ultra-deep water subsea installations and pipelines to relatively large on-shore supply bases which support the offshore installations. What some people may not realize is that while the production facilities are off-shore, most of the significant impacts may actually occur on-shore or near-shore.

Relatively large areas (possibly in the order of hundreds of thousands of square meters) will be required for hydrocarbons processing, storage and further delivery for use. This will undoubtedly impact on land-use (in an already densely populated coastal area), air emissions (mainly associated with flaring and further increasing Lebanon’s carbon footprint), noise, pressure on transportation infrastructure, and waste generation.

Furthermore in the case of gas, once processed, it would need to be transported to the local power plants (if priority is first given to domestic use). Current plans are to convey gas along an on-shore coastal pipeline running across the entire coastline.

The environmental impacts of such a plan need to be more carefully studied bearing in mind the various crossing of the pipeline with surface water bodies and other land-uses. Such detailed studies would be needed to ascertain that safety zones can be secured along the densely populated littoral. This is where not only environmental, but a more holistic health, safety and environmental assessment of such projects become instrumental planning tools to be used by regulators and planners.

Furthermore, while economic analyses may indicate that an onshore pipeline is more cost-effective than an offshore one, if resettlement of those people living in affected areas is required to meet safety standards then associated costs would rise significantly.

The recently established Petroleum Administration (PA) has the challenging job of understanding the potentially significant negative environmental impacts early on in the process and designing mitigation strategies and policies that will avoid them.

Early planning will lead to savings in the long term, both financially and environmentally. For example given the very limited availability of space onshore, the PA may encourage the adoption of off-shore floating solutions such as FPSO (floating, production, storage and offloading vessel). Such an option, although expensive, would not only relieve the coastal area from significant pressure, but may also protect marine habitats as lengthy pipelines bringing hydrocarbons onshore would not be needed. Such solutions also provide flexibility in the long-term, as they can be moved to another location once fields are exhausted, and do not require the decommissioning of extensive areas onshore.

There are other areas where the PA should provide policy directions as early as possible, such as in the areas of flaring (by promoting the adoption of zero-flaring philosophies in design) and waste management (will drill cuttings be allowed to be disposed in the sea or need to be sent for treatment and disposal offsite?).

Given the limited waste infrastructure, the PA could promote treatment of wastes in common offshore facilities to be established (introducing the concept of shared off-shore infrastructure facilities among the different fields and operators) or even promote transboundary cooperation (notably with Cyprus).

These are just a few of the myriad issues to be considered if Lebanon is to successfully extract oil and gas without causing irrevocable damage to the environment. They can only be dealt with if the government and the PA take a proactive approach to addressing a lack of health and safety legislation related to oil and gas, the lack of a national contingency plan (current plan considers only the case of natural disasters and foreign invasion, but not the case of large scale oil spills), data deficiency, and a lack of waste management infrastructure.

Development of the Lebanese hydrocarbon resources will not come without environmental impacts, however these can surely be controlled with sound environmental planning. The earlier such planning is integrated in the government’s activities, the better it will be for our environment’s and people’s welfare.

Ricardo Khoury is a senior environmental engineer and managing partner at ELARD, a regional consulting firm providing specialist services to the oil and gas sector. He consults for major international oil companies, government bodies, engineering firms and contractors operating in the sector, with a particular focus on the Middle-East and GCC region.

Lebanon’s progress to cultivate wealth from its offshore oil and gas resources has left us with more questions than answers. While the country will not extract any resources for at least five years, the agreements being negotiated in the next 12 months will determine whether Lebanon gets a good deal or not.

Over the course of five days, seven leading thinkers will discuss different aspects of the resources — from avoiding environmental destruction to how to spend the new wealth — each with the aim of helping provoke awareness about what is going on in this crucial period.

For our third segment, OpenOil's Zara Rahman discusses how to push the government to be transparent.

See also: Lebanon's Petroleum Administration makes a positive start

Avoiding a regional war over hydrocarbons

Transparency has become something of a buzzword for Lebanese politicians, most recently former Prime Minister Fouad Siniora, as they suggest ways to avoid corrupt practices and bad governance in the country's nascent gas industry. But publishing information and signing up to transparency initiatives is not enough; this transparency needs to be coupled with information accessibility in order for the information provided to bring actual value to the process, and it needs the Lebanese people to stay involved and interested in what the government is doing with their natural resources.

One way of understanding transparency in the extractive industries can be as making information public about what is going on, at every stage of the value chain. To prevent hidden favors, governments should be publishing contracts, releasing procurement tenders online and announcing licensing rounds and bidding rules to the wider public at the same time.

But the problem with this type of transparency, at least in the extractive industries, is that often the information released cannot be understood by the vast majority of the population. As such its value is lost, simply because it is not coupled with the tools needed to understand and use that information. The fact that a government is putting information online – often without advertising how to find it or putting in a format easily read and understood – does not necessarily contribute in concrete terms towards making it a 'transparent' government.

Take, for example, the Kurdistan Regional Government, which has published their signed contracts online. This step was welcomed as a clear sign of their commitment towards a transparent and open extractives sector, and rightly so, but the fact that the contracts are available only in Adobe Flash format has a huge effect on the way they can be understood. This format means that only one page can be viewed at a time from the KRG website, and also that only one page can be printed at a time. Without being overly critical – because their very decision to put the contracts online has been a great step in the right direction – the format they chose (whether this was a conscious decision or not) hindered the accessibility of the information.

Other countries have released statements saying that they have decided to put their contracts online; but a search for them comes up with nothing. Whether that means that they then decided to take them down, that they put them online on an obscure URL where people are unlikely to find them, or whether they were simply lying in the first place is not clear. What is clear, though, is that statements of transparency effectively mean very little unless a government takes the extra time to ensure sure that people can easily access that information.

Furthermore, we need to help people get past the legal jargon as oil contracts are often seemingly impenetrable to the untrained eye. To an oil and gas contract lawyer, these contracts can reveal huge amounts of information about what was focused upon in the negotiating room, what was conceded by the company and the government, and who is getting the 'best' deal out of the contracts. But to anyone else, reading the contract from scratch can be a thankless task; like reading a foreign language without a dictionary.

International organizations are taking steps now to make these contracts accessible: including (disclaimer: a project the author was involved in) OpenOil, which produced the first non-specialist guide to understanding contracts last November, released under the Creative Commons license. This book was designed to be a guidebook to allow citizens to really understand the issues covered in oil contracts, in order for them to act as an effective and real watchdog upon both their government and companies.

Other tools are also available, in the form of training courses around contracts and policy issues, and internet-based resources such GOXI – the social network which brings together experts working on governance of the extractive industries worldwide.

So let's say, in theory, that the Lebanese government really commits to transparency, and provides a single resource center where information on the process can be found – including any contracts the government may sign with international companies and clear announcements for calls to tender. The next crucial step is finding people within Lebanon to take that information and use those tools to really get inside the process and understand what is going on.

This group of people does not, necessarily, have to be civil society; it could also be people from the local private sector, who want to ensure that they have the best possible chance of gaining business from the deals their government is making with international oil companies. Or it could be engineering students who want to be sure that they are getting the opportunity to be trained to international standards by the companies – in contract speak, that there is a strong “local content” clause. Or, even better, a mixture of many different groups – the more people involved in really understanding that information and making well informed decisions on what should or should not be happening, the better.

These people need to take the tools available now, and begin to really understand what can, or should, be going on in the industry. This group of people, however small, can then disseminate the information to the wider public in more comprehensible terms; essentially democratizing the whole process and allowing the highest number of people possible to really have a handle on what is going on with their oil and gas industry.

In order for Lebanon to have the best chance of a corruption free and responsibly managed oil and gas sector, the commitment towards transparency needs to come from all levels of society. The government cannot do this alone; it needs citizens to act as a watchdog, both for the government itself and on the companies it is doing business with. These citizens must make sure that every party involved is acting in an economically and socially responsible way. Knowledge is power; and this power should belong to the Lebanese people, just as the natural resources do.

Zara Rahman is a Research Associate at Berlin-based transparency organization and publishing house, OpenOil