Monday, February 8, 2010


Educate landowners on hydrocarbon industry

Source: 
CHRISTOPHER PAPIALI
THE PNG LNG project, which is expected to generate billions for the economy, is a vote of confidence on the performance of the current Government, as some Government advisers suggest.
The LNG project covers key locations which include Juha production facility, Hides gas to electricity plant, Hides gas conditioning plant, Agogo production facility, Kutubu central processing facility, Gobe production facility, Kopi shore base, Kumul marine terminal and LNG facilities in Central province. Along the pipeline we have villages right from Siabi to Papa and Lea Lea.
With the current global financial crisis and the weakening of the US dollar, the PNG LNG project should craft the path to tangible development. The need for energy is growing. In the 1950s, oil and natural gas became the main source of primary energy for the increasing world population. Large financial institutions and governments have been at the forefront of investing in energy.
Petroleum consumption carries major environmental impacts such as air pollution, global climate change and water contamination. Exploration and production of petroleum have caused detrimental impacts on soils surface, ground waters and ecosystems. Despite such impacts, PNG is experiencing its share of global energy demand, which seems to supersede environment and air pollution concerns.
The Government and developers know very well that the oil and gas industries generate significant revenues for the national economy and it is quite imperative to have sound macroeconomic policies in place so that the revenues generated are converted into social capital and lead to broader based overall economic development and poverty reduction as a whole.
Research done on the conversion of revenue into improved social capital seems to point to negative social and environmental outcomes. Resource developments have failed to generate sustainable benefits and it is likely to get worse given the current political climate and policy development regimes at the bureaucratic level.
At the village level, most villages along the LNG project do not have proper road networks, telephone, hospital, banks and other important basic infrastructure. There are hardly any sustainable and efficient benefits received from some of the multi million kina projects around the country. We expect better hospitals, better schools and urban towns to develop as a result of active mining, exploration, and logging activities but that is not the case. Even at the national level, the royalties and tax income do not translate into long term growth in human and physical capital.
There is an urgency for the Government and key stakeholders to manage the existing problem by establishing good governance and management bodies (although we  have other key government statutory bodies) that will effectively manage and distribute revenue across all sectoral developments and in consultation with principal resource owners develop plans to use the resource revenues to avoid squandering. PNG does not even seem to have a prudent Energy Policy Act that could monitor water discharges from oil and gas exploration, processing and treatment, operations or transmission facilities.
Oil and gas are part of the energy demand that is unstoppable worldwide and such an act should provide opportunities for the local communities, particularly those affected by the LNG project, to improve their living conditions. The local resource gas pipeline owners do not have access to reliable energy sources and knowledge and the capacity to be active participants in the development.
One may still argue that royalty payments are given but the question still remains as to how effectively such monies are used. The LNG resource owners do not have any idea about venturing into the renewable energy business and it is mostly likely that the monies will be used on real estate, transport and agriculture.
It is a widely held view that communities in isolated areas such as Juha, Gobe, Baina, Kaiam and others are not attractive targets for the distributors of electricity or natural gas since they are perceived to lack the ‘critical mass’ and the ability to pay.
Given this scenario, it is important to know that the use of natural gas has the potential for widening access to electricity, since it may be readily used for small-scale power generation, and for a wide spectrum of household, commercial and small industrial uses. Pilot projects in Africa of small rural gas applications have proven successful. Using stranded gas reserves or new gas pipeline systems, it is possible to address this obstacle by developing economic small gas projects for such rural communities along the PNG LNG Gas project.
To mitigate the adverse impacts of such developments, it is of critical importance to develop within the indigenous communities a basic knowledge about the benefits of the hydrocarbon industry.

* Christopher Papiali is a senior lecturer with the department of business information systems at the Divine Word University in Madang.
 

Thursday, February 4, 2010


Climate change: EU notifies targets

THE European Union on Jan 28 formalised its support for the Copenhagen Accord on climate change and presented its commitments for emission reduction targets. In a joint letter with the Spanish presidency of the Council, the European Commission has formally notified the EU’s willingness to be associated with the Accord and submitted for information the EU’s established greenhouse gas emissions reduction targets for 2020.
These consist of a unilateral commitment to reduce the EU’s overall emissions by 20% of 1990 levels and a conditional offer to increase this cut to 30% provided that other major emitters agree to take on their fair share of a global reduction effort. Under the Accord, notifications were to be submitted by Jan 31.
Commission president José Manuel Barroso said: “The EU is determined to move ahead rapidly with implementing the Copenhagen Accord in order to make progress towards the agreement that we need to hold global warming below 2°C. The Accord provides a basis on which to build this future agreement and I therefore urge all countries to associate themselves with it and notify ambitious emission targets or actions for inclusion as we are doing.”
European environment commissioner Stavros Dimas said: “Swift action is needed to make operational key elements of the Accord such as fast-start financing for developing countries, the fight against deforestation and the development and transfer of low carbon technologies.”
Copenhagen Accord 
The Copenhagen Accord was the main outcome of the UN climate change conference held in Copenhagen from Dec 7-19. The 2-1/2 page accord was negotiated on the final day of the conference by the leaders of some 28 developed and developing countries and the European Commission.
These countries account for over 80% of global greenhouse gas emissions. The conference then took note of the Copenhagen Accord. The secretariat of the UN climate change convention invited parties to declare by Jan 31 whether they wished to be associated with the Copenhagen Accord.
The Accord set the same date for developed countries to submit their emission reduction targets, and for developing countries to submit their emissions mitigation actions.
In the letter from the commission and the presidency of the council, the EU reconfirmed its commitment to a negotiating process to achieve the strategic objective of limiting the increase in global average temperature to below 2°C above the pre-industrial level.
The Copenhagen Accord recognises the scientific view that global warming should be kept below 2°C in order to prevent dangerous climate change, but it does not include any global emission reduction targets for respecting this limit.
The letter restated the EU’s position that keeping below 2°C requires global emissions to peak by 2020 at the latest, to be reduced to at least 50% below 1990 levels by 2050 and to continue to decline thereafter. To this end, and in line with the findings of the UN Intergovernmental Panel on Climate Change (IPCC), developed countries as a group should reduce their emissions by 25-40% below 1990 levels by 2020 and developing countries should achieve a substantial deviation below the currently predicted emissions growth rate, in the order of 15-30% by 2020, the letter continued.
It underlined the full commitment of the EU and the member states to continue negotiations with a view to agreeing as soon as possible, within the UN framework, a legally binding international agreement for the period starting Jan 1, 2013, when the Kyoto Protocol’s first commitment period expires.
EU emission targets
The letter stated that the EU was committed to an independent economy-wide emissions reduction target of 20% by 2020, compared with 1990 levels, and that this cut could be increased to 30% under the conditions agreed by the European Council.
These conditions are that, as part of a global and comprehensive agreement for the period beyond 2012, other developed countries commit themselves to comparable emission reductions and developing countries contribute adequately according to their responsibilities and respective capabilities.
Next steps
Heads of State and Government will assess the post-Copenhagen situation at the informal European Council on Feb 11.
The next round of UN negotiations will take place for two weeks in May-June.

*Source: Delegation of the European Union to PNG