April 27, 2013
By Samya Kullab

BEIRUT: From the shore, the site of Lebanon’s potential maritime oil and gas reserve appears a vast expanse of blue sea.

But well below the surface water, a depth impenetrable even by the sun’s rays, lie 10 state-demarcated exploration blocks still to be auctioned off to oil companies, in the hope that one day they will alleviate the country’s fiscal and energy woes. Environmental concerns, however, are inauspiciously absent from talks relating to Lebanon’s maritime offshore potential, including at a major oil and gas summit that took place this week. And as this is the first time the country is pursuing deep-water drilling, both environmentalists and petroleum experts are urging caution.

At the state level, the environmental question appears to be more of a regulatory afterthought. As Beirut MP Mohammad Qabbani explained during a news conference following the summit, “There are several laws and decrees that can be issued by the government that will … regulate specific topics before the actual drilling process begins.”

“The environmental decree will be one of these to come,” said the lawmaker, who chairs the parliamentary subcommittee on energy.

There are currently no specific environmental regulations that place conditions on offshore deep-water exploration, although lawyers point to Law 244 (2002), which outlines how to protect the environment and obliges industrial projects to pass an Environmental Needs Assessment. This will also apply to offshore drilling operations, they say.

The question environmentalists are asking is: What standard criteria will the assessment require?

“We are all very aware of the kinds of problems that can occur,” said Neil Hodgson, exploration director at Spectrum, a company that provides comprehensive seismic imaging of the maritime basin.

The April 2010 Deepwater Horizon oil spill within the BP-operated Macondo Prospect in the Gulf of Mexico occurred after high-pressure methane gas from a well rose to the drilling rig and ignited. It is judged by most to be the “worst worst case scenario,” according to Hodgson.

But thousands of deep-water wells are drilled across the world every year without a hitch, Hodgson said, because in most cases environmental and safety factors are thought through beforehand and contingency plans are put in place.

Environmental regulations usually apply to the drilling process, which can disturb organisms that live on the seabed, and emergency plans, which prevent unforeseen occurrences that could result in spillage.

“There’s nothing we need to be afraid of, but we have to make sure all the planning is in place to mitigate any problems that might arise,” Hodgson said.

The geological expert cautioned that as deep-water drilling was new to Lebanon, there were still many unknown factors related to the basin’s geological formation that could only be assuaged once drilling commences.

The environmental risks involved are higher when drilling for oil, as it causes more damage if spilled than natural gas, which simply dissipates into the atmosphere.

“Drilling plans will have to reflect on a lot of things that are unknown,” he explained. “We don’t know about the pressure regimes, we can make a surmise about them, but we don’t know them for certain. … The first wells to be drilled will have to exercise more caution in their operations.”

According to modeling by deep-sea imaging companies Stratochem and Beicip Franlab, three types of hydrocarbons might be found in Lebanon’s offshore basin.

There is good evidence to support the existence of oil and methane-based natural gas. The relative low-risks involved in extracting natural gas provide a rare instance where environmentalists and the oil industry are in agreement about something: Natural gas will benefit Lebanon.

“I would not actively oppose natural gas [extraction],” said Rayane Makarem, a campaigner with Greenpeace. He added the shift to gas would be far less damaging than the current method of using heavy fuel oil to make electricity. However, when it comes to oil, the environmental stakes are higher: “There is always a risk. There is no zero risk, environmentally speaking.”

“For us, gas is the least worst option. We consider it a steppingstone to investing in newer energies, but we have to use this opportunity to invest in solar and wind,” he said, adding that the organization is reserving judgment on Lebanon’s offshore prospects as they are still in the exploration phase.

Petroleum geologist Fuad Jawad dismissed the pressing environmental concerns of most NGOs as an “overreaction,” maintaining that “we in the oil and gas industry are not anti-environment.”

Though he downplayed the risks posed by hydrocarbons, saying it was “almost harmless” when in the form of gas and away from the coast, he said the best measure to prevent environmental damage was assigning blocks to oil companies that know how to do the job right.

“What we worry about the most in deep-water Lebanon are the qualified companies,” Jawad said. Twelve companies are now in the bidding round, and in his opinion only five are truly capable of working in deep water.”

He describes the Energy Ministry’s prequalification process as short and mediocre: “They required a company to have one well experience of 500 meters [deep water],” whereas offshore Lebanon will require ultradeep water experience.

“How can you technically evaluate 36 companies in three weeks?” the geologist asked. “It’s scary to me that you could give ultradeep water blocks to companies that aren’t qualified. That’s inviting disaster.”

“This is exactly what happened in the Gulf of Mexico,” he said, where “a major company like BP [was operating the well], and they still managed to make a mistake just to save money.”

According to Jawad, the BP spill was a result of cost-saving in a deep-sea drilling endeavor that is comparable to Lebanon’s offshore plans.

Though the companies involved invested in mostly top-notch equipment, their sole mistake was to purchase downhole completion equipment from China, the seals of which burst under pressure.

“Everybody in the Middle East wants to save money. They don’t pay attention to the high cost of technology, and they undermine it just to save a million or two.”

A version of this article appeared in the print edition of The Daily Star on April 27, 2013, on page 3.

Read more: http://www.dailystar.com.lb/News/Local-News/2013/Apr-27/215247-beware-deep-water-oil-drilling-experts.ashx#ixzz2RsLf2UHd
(The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)