Oil in Uganda Stakeholder Meeting

It is clear that there will be no restrictions on oil drilling in Uganda. Four of the ten National Parks and 8 of the 12 Wildlife Refuges are slated for oil exploration and drilling in the next few years. In Murchison Falls National Park, two exploratory wells were drilled in a RAMSAR site, an international designation for wetlands of global significance, at the delta where the Nile River enters Lake Albert. This delta area also contains the highest concentrations of other wildlife such as elephants and buffalo, breeding habitat for the rare shoebill stork, and important spawning areas for the fisheries that are critical to the people living around Lake Albert.

At a meeting between oil industry representatives and tourism and conservation stakeholders in Kampala recently, I asked Robert Kasande, the representative of the Petroleum Exploration and Production Department of the Government of Uganda if he was the one deciding where drilling would and would not happen. His response was, “As I see it, drilling will happen where there is oil. It is just a technical issue.” He stated that there are no areas that are too sensitive to accommodate oil development.

When I asked the Heritage Oil representative if there was a stopping mechanism, some way to halt production if the environmental impacts are greater than expected and are deemed unacceptable, he said that would be “up to Government.”

And, ultimately, that should be the case. However, it requires a lot of trust in the government – the same government that stands to gain billions of dollars from this oil. Uganda is regularly ranked as one of the more corrupt countries in the world by Transparency International (only 42 out of 180 countries assessed were seen as more corrupt than Uganda in the 2009 index) . Interestingly, Uganda is tied on the index with Nigeria, the poster-child for everything that can go wrong with oil production in developing countries.

In a case of the “fox guarding the hen house,” the government is responsible for monitoring the environmental impacts of oil exploration and production, and they feel there is no place for third-party, independent monitoring. Conservation groups have expressed concern regarding access to prospective drilling sites, which will certainly bring into question any biodiversity baselines the monitoring teams measure against in the future.

There is also some question of how much monitoring information is making it back to the oil companies. The Tullow Oil Production Manager showed a slide of the “green flaring” technology they are now using, which purportedly burns 100% of the crude oil that is being disposed of, reducing emissions to zero. However, in a later presentation by Edgar Buhanga from the Uganda Wildlife Authority, we saw a slide of the same site Tullow was referring to, where the surrounding vegetation had been sprayed and coated by raw crude oil that had leaked from this high-tech, “green” device.

Upon seeing this slide the Tullow representatives seemed visibly shocked. No matter how you look at it, this is disturbing. Either 1. The Tullow folks knew about this and were giving a greenwashed view of the practice or 2. They really were surprised by it and the feedback loop between the monitoring teams and the oil companies has broken down (or never existed in the first place).

The impacts on this park are only going to increase. Six more exploratory wells have already been approved for drilling in 2010 within the boundaries of Murchison Falls National Park, and three more are awaiting approval. Once this appraisal stage is finished, the real work begins, with untold “production wells” being drilled throughout the field. And this is just one of the twelve protected areas that already have or will soon be explored.

It will be important to watch Uganda closely in the next few years to make sure that the rights of both people and wildlife are protected. But I’m sure there is nothing to worry about. The fox is watching over us.

More information:

http://africannewsanalysis.blogspot.com/2009/12/uganda-leaked-report-on-oil-deals-puts.html

http://www.afiego-ug.org/index.php?option=com_content&task=view&id=21&Itemid=1

Mark D. Jordahl – Kampala

Democracy and Wildlife at Risk in Uganda

Every time we fill up our tanks at the pump, we are putting wildlife and democracy at risk in Uganda. I’m not talking about the effects of climate change – that argument barely needs to be made at this point. It turns out that there is an actual geopolitical link at work between the price of oil and the survival of democracy in oil-exporting countries, and the effects will be felt much more quickly and directly than those caused by climate change.

Freedom and Oil

According to Larry Diamond, author of The Spirit of Democracy, there is not a single democracy to be found among the 23 nations that have oil and gas as their clearly dominant export. When you can derive nearly unlimited funds by selling more oil, you have no incentive to empower your people to be innovative or industrious, no reason to educate them, and, frankly, no reason to listen to them. You can buy however many votes you need, and you can afford an internal security force that can quiet any unrest.

In his book Hot, Flat and Crowded, Thomas Friedman took a close look at the relationship between the price of oil and the level of freedom for people living in oil-producing countries. He drew a graph that charted the price of oil between 1979 and 2006 against the “pace of expanding or contracting freedoms” in Russia, Nigeria, Iran and Venezuela as determined by the “Freedom in the World” report by Freedom House and the “Economic Freedom in the World” report by the Fraser Institute. He found almost a perfect inverse relationship between the two. When oil prices go down, freedom goes up. When oil prices go up, freedom goes down. This pattern held true in other countries during this period as well. The exceptions he points out are countries that had strong state institutions and government transparency before the discovery of oil.

Democracy at Risk

Recently, oil was discovered in the Albertine Rift region of western Uganda. A lot of oil. Potentially billions of barrels, some say rivaling the incredible petro-sea below Saudi Arabia. This is going to change life for Ugandans in many ways. It could be an incredible boon, but my guess is that Diamond and Friedman would see a new dictatorship on the horizon.

It is unlikely that Uganda will be included in the exceptions – countries that have “strong state institutions and government transparency.” Does this only leave the path of declining freedoms and increasing state autonomy? There have already been signs of this. President Museveni has been in office for over 23 years. In 2005, his party changed the constitution to lift the term limits to allow him to run for a third term. Nobody was surprised by his victory, or by the arrest of the opposition candidate before the election in 2006.  The contracts between the oil companies and the government are not available to the public. And with this much money at stake, the government will want to keep even tighter control over the country.

Wildlife at Risk

Wildlife is already paying the price for the decrease in democracy. The Albertine Rift is one of the most biodiverse regions in the world, and also contains one of the highest human population densities anywhere. The government has already offered drilling concessions inside Murchison Falls National Park, the largest protected area in Uganda, over the objections of the Uganda Wildlife Authority. The current wells are right on the delta where the Nile River enters Lake Albert. Besides the obvious risks to the waterways, this is the area with the highest concentrations of elephants and other wildlife. There are plans to drill seven more test wells in the northern section of the park which will further disrupt the wildlife. With bountiful oil returns in their future, the government is less inclined to worry about preserving the wildlife that is critical to tourism, the third-largest foreign exchange earner in the East African country.

If Friedman and Diamond are right, the best way to protect democracy and wildlife in Uganda is to keep the price of oil low. Not the price of gas, mind you – fuel subsidies in the United States are a big reason why our consumption is so high. Given that we can’t create more oil, the best way to keep the price of a barrel low is to decrease demand. If Uganda isn’t going to turn into another mess like Nigeria, it is critical for all of us to reduce our consumption of oil-based products, encourage the development of alternative energy sources, and stay informed about how our lifestyles affect the rest of the world.

Mark D. Jordahl – Kampala