sharing in governance of extractive industries

Is Uganda ready to handle oil waste?

With the government estimating that Uganda’s Albertine Graben holds at least 3.5 billion barrels of oil, expectations of many Ugandans are high—but so too are fears of environmental damage.

Other natural resources already generate revenue in the oil-rich region.  It is home to premier tourist destinations, including the Queen Elizabeth, Murchison Falls and Semiliki national parks. And, experts agree, it is also an ecologically ‘sensitive’ area.

A major oil spill or a fire at an oil well could result in environmental catastrophe.  But, as well as fearing such a nightmare scenario, Ugandan environmentalists also worry about how the country will manage a predictable and certain result of oil production—the generation of large amounts of oil waste.

“All the requirements for environmental management must be in place and properly understood before petroleum production starts.  Currently, we do not have the facilities, frameworks and mechanism to handle any oil waste,” says Frank Muramuzi, Executive Director of the National Association of Professional Environmentalists.

Oil waste includes the mud and rock that is removed as a well is drilled, together with chemicals that are poured in to assist the drilling. At the bottom of the well, some of the rocks are thickly coated in oil.  Mud and water pumped into the well in order to force out the oil also ends up as waste.

Mr. Muramuzi argues that there should be stringent regulations to manage waste treatment and disposal. The simple guidelines so far put in place by the National Environment Management Authority (NEMA), he says, are neither detailed nor tough enough.

Don’t worry, says government

Yet government officials insist that they are taking adequate steps to protect the environment.

Frederick Kabagambe Kallisa, Permanent Secretary to the Ministry of Energy and Mineral Development, assured delegates at a recent conference in Arusha that Uganda has incorporated environmental management measures within the petroleum bills recently passed by parliament.

Supporting this position, Isaac Ntujju, a senior Environmental Inspector with NEMA, says that oil companies have been advised to use water-based drilling mud and quality drilling chemicals that are “environmentally friendly.”

According to former NEMA Executive Director, Henry Aryamanya Mugisha, the operational waste management guidelines for oil and gas operations require the oil companies to adopt a “precautionary” approach.  The guidelines, he notes, “require substances sieved from oil to be gathered in well-built waste dumping sites as they await proper disposal methods.”

At present, designated waste consolidation sites at Tangi in Nwoya District, Kisinja (Kaisotonya-Hoima District), and Ngara, Bugungu and Kigongole in Buliisa District, serve as temporary disposal sites as plans for permanent waste disposal are developed.  The oil waste is stored in containerised pits lined with thick plastic material to avoid any leakage into the soil.

But this is only a temporary solution and, when oil production begins, there will be much more waste needing safe, permanent disposal.

“When the oil drilling started, we were not sure how to handle the wastes,” admits Mr. Ntujju. “However, we managed to build capacity over time and expect that once the contracts are awarded, these companies will follow the interim management guide to the letter. The revised National Environment Act Cap 153 (1998) was set up to ensure that oil companies adhere to the guidelines.”

The  Environmental Monitoring Plan for the Albertine Graben 2012-2017 calls for a performance bond, which will be required of all oil companies before they start production. It also calls for cancellation of licences if an oil company does not honour the guidelines.

Reality check

However, the practice of storing wastes until a permanent disposal solution can be found, has not so far been followed “to the letter” in all cases.

During a recent visit to Rhino Camp, where Neptune Petroleum drilled a dry well, Oil in Uganda found that drill cuttings had been spread on land that owners were cultivating.

Walter Aniku, the LC1 chairman Ewuyu village, regarded the drill cuttings as good fertilizers, noting that “We harvested four sacks of maize and simsim from this land where cuttings were buried.”

Yet conservationists point out that drilling waste contains traces of heavy metals such as lead and cadmium which are harmful to human health.

Dr. Aryamanya confirms that “The oil drill wastes were tested during the preliminary stages from various laboratories in Makerere (Department of Chemistry and Geology) and Houston (Texas), and the reports indicated small amounts of lead and cadmium. These heavy metals can cause cancer and birth defects respectively.”

In an earlier case reported by Oil in Uganda, Heritage Oil and Gas had buried wastes on land belonging to a farmer (pictured left) in Nwoya District, paying him a small amount for allowing this to happen.  NEMA had visited and tested the soil but had not reported the results.

Without extensive investigation it is not possible to say how isolated such cases are.

Weak institutions

Several observers note that NEMA and other government agencies are too weak to manage the issue properly.

“This fear about oil drill waste is worsened by the incapacity of the institutions and authorities involved,” according to Joel Garubo, an engineer and waste manager at Epsilon, a local company that deals in transportation of industrial wastes.

Epsilon, established in 2002, was awarded a transportation licence by NEMA and has worked with Tullow Oil for two years. It is now also working with Total E & P, transporting wastes to Nakasongola where there are disposal facilities formerly owned by the National Enterprises Corporation, the business arm of the Ministry of Defence.

A recent capacity needs assessment, funded by the Norwegian government’s Oil for Development Programme also found serious weaknesses in NEMA and its partnering agencies.  The report states that government departments responsible for protecting Uganda’s environment suffer “absence of political leadership.”

Reacting to the report, Mr. Ntujju insists that the oil sector is a new field to Uganda and NEMA is doing its best to put up stringent laws that will protect the environment.

But, according to Dr. Aryamanya, the problem has been lack of funds to support NEMA officers to do their work.

Company players

According to a report by the Uganda Radio Network, three private companies have been awarded oil management waste lice... Mr. Ntujju clarifies, however, that two of those companies—Green Label and Green Impact—were contracted only to transport the wastes to the designated storage sites.  A third company—Providence, based in the USA—is waiting to renew its licence, which had expired. “So for now, there is no company that has been awarded the licence to carry out waste management,” he explains.

Dr. Aryamanya, who has served as a consultant to Providence, tells a slightly different story. He says the company pulled out from Uganda because it was not willing to spend an estimated US$ 30 million in developing oil waste facilities when the government has no clear plan. The status and prospects for licencing are too uncertain to risk the investment.

Green Label, based in Kampala, was incorporated in 2002 and handles industrial and medical wastes. It has transported oil wastes from wells operated by Tullow to Nakasongola.

Moses Muhumuza, the company’s Technical Director, says that they are awaiting award of contracts from oil companies they applied to.

“Government does not award these contracts,” he clarifies. “It is oil companies that employ as NEMA regulates. We applied to one of the oil companies and we are confident that we shall win the contract because we have the capacity to do this work well.”

A source from Green Impact told Oil in Uganda in a phone interview that the company has been engaged in waste transportation for two years. However efforts to gather more information on this company were not fruitful.

Epsilon’s Engineer Garubo argues that the bidding process set up by government is too rigorous. Tough laws, he adds, have demoralised local companies.

“No company wants to invest in this industry because it is too expensive and there is lack of expertise. Purchase and shipping of equipment cost a fortune,” he says. He adds that NEMA and other government agencies should train people in waste management so that local content is strengthened.

Oil waste management companies require good, sufficient manpower, state-of-the-art equipment and should be highly capitalised.  But these are not conditions that many local companies can meet.

So, while environmentalists call for tough laws and stronger institutions to enforce them, private sector players argue for more corporate capacity building to support local content. These remain major challenges to effective and safe waste management.

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