In recent times, most especially after the signing of the Final Investment Decision (FID) in February this year, government agencies and personalities intensified efforts to promote, protect and make a case for Uganda's premier oil and gas infrastructure project, the East African Crude Pipeline.
A campaign codenamed Support EACOP was rolled out to counter Stop EACOP, a campaign which over the years has been traded by Civil Society Organizations (CSOs) that look at the $3.5bn Pipeline as a climate change facilitator by potentially emitting over 34 million tons of CO2 emissions every single year.
According to revised plans, the Pipeline construction is scheduled to start in 2023 and be ready in 2025 when Uganda will realize First Oil.
The 1444km pipeline will carry crude oil from Hoima in western Uganda to the Tanzanian port of Tanga where it will be shipped to the international market. The EACOP project developers are TotalEnergies (62%), the Ugandan and Tanzanian governments (15% each) and China National Offshore Oil Corporation (8%).
The pipeline, which will be the longest electrically-heated crude oil pipeline in the world, will transport 216,000 barrels of crude oil per day from the Tilenga and Kingfisher oil fields. Apart from carrying the Ugandan waxy black gold and the subsequent revenue, it will give Uganda, the Pipeline development will create hundreds of jobs and offer numerous business opportunities to Ugandans and Tanzanians.
The snaking infrastructure, like the ongoing Support EACOP & Stop EACOP debate, has positive and negative sides.
FIGHTING TO ‘STOP’ & ‘SUPPORT’ EACOP
The government and the International Oil Companies (IOCs) had for the long haul ignored the anti-fossil fuels campaigners to go on with the EACOP smear campaign until now. The environmentalists, local and international organizations and individuals called on the government to abandon the multibillion-dollar project.
On seeing that the government was not yielding, they turned their focus on the potential financiers of the Pipeline like banks and insurance companies. And indeed they managed to get some American and European banks to back off and indicate that they cannot fund the project because of the risks it poses to the environment and its contribution to climate change. Financial institutions like JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, Deutsche Bank and others have ruled out any financing role. Insurance heavyweights Munich Re, Allianz, Axa and Beazley will not provide any cover. TotalEnergies has not come out to address this matter but their operations in Uganda have remained steady.
In an interview with Daily Monitor, Mr. Peter Muliisa, the Uganda National Oil Company (UNOC) Chief Legal and Corporate Affairs Officer said they have 'entities from Europe, from Asia and all over the world willing to finance EACOP. He told the newspaper that they will be able to announce the chosen financiers in July. According to the Center for International Environment Law, Japanese Sumitomo Mitsui Banking Corporation (SMBC) is acting as financial advisor to TotalEnergies in a deal that will see a yet-to-be-named Japanese bank bankroll the transboundary project. TotalEnergies by proximity to CNOOC is also said to be considering going to China in search of a capable financier.
POPULAR GLOBAL ENERGY TRANSITION MOVEMENT
The global conversation regarding the energy transition that will see the world move on from fossil fuels to clean energy put projects like the EACOP in a difficult position and developing countries like Uganda set to adversely be affected by this transition are putting up a fight.
These poor countries want to extract oil and gas at any cost. And with the financial backing of international companies, as we are seeing in Uganda, the developing countries will proceed to harvest the hydrocarbons as they keenly observe the clean green energy game so that they don’t miss out on anything.
In Uganda, there is the political will for the country to extract the hydrocarbons from the ground, refine them for the domestic market and export the rest to the international market which is the part where the EACOP comes in.
But to achieve this, Uganda has to deal with local CSOs that have the backing and influence of their counterparts from the West. They want Uganda to abort its mission of extracting its oil and join the energy transition trend swaying into the renewable and green energy side.
The anti-EACOP campaigners in Uganda led by Africa Institute for Energy Governance (AFIEGO), a CSO leading 13 others on his cause, argues that the EACOP project poses immense social, economic, environmental, and biodiversity and climate change risks. The CSOs alert that these risks are set to, directly and indirectly, affect forests, national parks, game reserves, lakes, rivers, wetlands and others in Uganda and Tanzania.
BIODIVERSITY RISKS RAISED
AFIEGO, quoting a 2017 World Wildlife Fund (WWF) report reveals that the EACOP will affect 2,000km of protected areas and will fragment habitats for elephants, chimpanzees and other endangered animals in protected areas like Bugoma, Wambabya and Taala forests in Uganda as well as Minziro Nature Forest Reserve and Burigi-Biharamulo Game Reserve in Tanzania.
It is also believed that the EACOP is set to affect wetlands belonging to Lake Victoria, Lake Tanganyika as well as the Wami/Ruvu and Pagani basins. Other wetland systems that are likely to be impacted include the Sango Bay-Musambwa Island, Nabajjuzi and Lake Nabugabo, Mabamba Bay, Lutembe bay and others.
The conservationists say that the pipeline poses a great risk to the rich biodiversity – the forests, game reserves, lakes, wetlands and other protected areas which are habitats for internationally-recognized endangered species. Bugoma forest in Uganda hosts over 600 chimpanzees or 12% of Uganda’s chimpanzee population; the wetland systems are important bird areas for both migratory and other bird species.
Some of the social impacts include the possibility of EACOP affecting a total of 13,000 households in Uganda and Tanzania. These households are losing land, houses, homes and a way of life.
As they waited for compensation, the Project Affected Persons were stopped from using their land to grow perennial food and cash crops leading to food scarcity, reduced family incomes, psychosocial distress, school drop-outs, and abuse of their cultural rights and others.
In the long-term, community and public expenditure on health, climate change crises and others could increase because of the EACOP. Air pollution, oil spills and others will worsen community health.
ALL IS WELL – GOVERNMENT, OIL COMPANIES SAY
Despite all these fears being raised by the CSOs, the EACOP project, like the other oil projects will go ahead as planned with the full blessings of the government including well-received approvals from the National Environment Management Authority which supervises and certifies all Environmental and Social Impact Assessment (ESIA) conducted before any project commences. The EACOP, after a rigorous ESIA exercise, was okayed by NEMA and will proceed. Internally, the IOCs, TotalEnergies and CNOOC Uganda, base their and international based.
TotalEnergies recently launched the Tilenga Biodiversity Program, an initiative aimed at protecting and conserving biodiversity in and around the Tilenga project area. This gesture has been looked at as evidence and commitment from TotalEnergies indicating that prioritizing nature was top of the company’s agenda.
Mr. Philippe Groueix, the General Manager of TotalEnergies, said they are mindful of the sensitive context within which they are undertaking their activities. "We have thus committed to ensuring that we implement action plans designed to produce a net positive impact on biodiversity. The biodiversity program will ensure a sustainable approach in working with the community towards protecting and conserving the ecologically rich area.”
Speaking at the 3rd National Local Content Conference Ms. Pauline Macronald, the Environment & Biodiversity Manager at TotalEnergies said the company strives to manage the environmental effects of all its projects & operations according to the Mitigation Hierarchy principles of avoidance, minimization, restoration & offsetting.
To enhance Biodiversity & Ecosystem Services, Ms. Macronald, revealed that TotalEnergies has partnered with NEMA, National Forestry Authority, Ministry of Water, ECOTRUST, Uganda Wildlife, Petroleum Authority and Wildlife Conservation Society to ensure a positive impact on wildlife & communities.
Mr. John B. Habumugisha the Deputy Managing Director of EACOP Limited, a company that was formed to do business, discussing Environment and Social Governance elaborated that as a company, they continue to insist that anything they do around EACOP must be stringently compliant to the environmental and Social requirements. "In terms of the environment, we have avoided most of the sensitive areas & the design levels are stringent. Our system ensures that we don't have issues of spillage," said Mr. Habumugisha.
The Petroleum Authority of Uganda, the industry regulator, has fully backed the project saying that IOCs have done the necessary due diligence to ensure the safe production and transportation of oil through EACOP. Dr Joseph Kobusheshe the Director HSE at Petroleum Authority explained that Environment and Social Governance has become an important measure of sustainability.
THE WORLD, ESPECIALLY AFRICA, STILL NEEDS OIL & GAS
The emergence of the pumped-up Support EACOP agenda knocking out Stop EACOP with verve reignited a public debate on what is the right thing to do. This debate also came at a time when the war in Eastern Europe between Ukraine and Russia was causing a scarcity of crude oil and sky-rocketing fuel prices globally.
The war and the subsequent sanctions by the EU and partners on Russia created a scarcity of Natural Liquefied Gas. These scarcities and the outcry that resulted somehow underscored the fact that fossil fuels still drive the day-to-day lives of people across the world and that the world cannot afford to live without them.
In a highly publicized article, President Yoweri Museveni May this year described efforts by developed countries to impose a moratorium on fossil fuel investment across the world as 'misguided'. President Museveni explained that due to the highly increasing population in Uganda, renewables cannot 'deliver the base load required to boost manufacturing or industrialize agriculture -- crucial for Africa in the wake of the pandemic.'
"In light of the Ukraine war, the West, too, would do well to consider a policy change -- and initiatives like the Lake Albert basin oil project may form part of the answer. By investing in oil and gas deposits in friendly nations such as Uganda, Europe could decrease its reliance on hostile nations." President Museveni penned.
President Museveni's argument is shared by many industry players on the African continent. They argue that with Africa's socioeconomic development hinging on the exploitation of the continent's oil and gas resources, this ‘hypocrisy’ by already developed countries in the West could spell a travesty for Africa.
Mr. Leoncio Amada Nze, the president of the African Energy Chamber questions 'how is it that Africa must decarbonize while Europe continues to industrialize.' He says: “We deserve to develop our oil and gas to make energy poverty history. In 2022, Africa needs to ramp up its licensing rounds, drive exploration and position itself as the primary supplier for domestic and global markets." With over 600 million people without access to electricity, Africa cannot and should not leave its oil and gas resources in the ground, he adds.
