The East African Crude Oil Pipeline Project and the energy transition debate

By Peter Muliisa.

The East African Crude Oil Pipeline (EACOP), a 1443-kilometer pipeline to transport Uganda’s crude oil through the Tanzanian Port of Tanga has recently generated debate in both regional and international fora. The debate has centered on its impact to the environment and people; with activists arguing that EACOP will adversely affect the environment as well as displace people. The activists have campaigned against its construction and consequently that the crude oil discovered in Uganda be a stranded asset (remain in the ground). On the other hand, the Governments of Uganda and Tanzania have defended the project as one that is necessary for the development of both Countries. They further assert that it is being executed in a sustainable manner with the highest standards possible in resettling project affected persons.

It is not in doubt that pipelines have been safely constructed across the globe including in areas of sensitive biodiversity. There are internationally accepted standards for managing environmental and social impacts as well as resettlement of project affected persons. EACOP having followed these international standards is not in doubt as is the fact that the project is already and will continue to benefit the populations in both Countries. This project will unlock and create more than 32,000 jobs (90,000 more jobs from Upstream and refinery projects) for the majorly youthful populations, the government of Uganda will be enabled to receive more than USD 20 billion in crude oil revenues from the oil wells, tax revenues for both countries will grow, EACOP and upstream projects will inject a USD 12 Billion investment in the two Countries, the project will enable production of significant tonnes of Liquified Petroleum Gas (LPG) that is badly needed as substitute for charcoal and reduce loss of forest cover. The development of petrochemical industries will significantly improve balance of trade and payment for Uganda. The long list of benefits cannot be exhausted in this text. The question that lingers then is; if the project is safe for the people and environment, is extremely beneficial to the two populations, is supported by the two governments as well as their population, why are climate change/environmental activists so against it?

Whereas the activists have advanced different arguments at different fora, what comes out clearly is that they are fighting EACOP primarily because it is a fossil fuel project. Notwithstanding the fact that EACOP is not the biggest fossil fuel project, is generally structured to be carbon neutral and is sponsored by Countries with significantly low emissions, it has attracted a lot of attention; surprisingly more than coal plants being re-opened, increased coal production and exploration activities being commenced in Countries that are contributing most to global greenhouse gas emissions. However, notwithstanding these clear double standards by the activists attacking EACOP, climate change affects all of us and as such we must review this project in that light. We must all work to protect our planet Energy transition is therefore a journey we all must take.

In taking the energy transition journey, these questions must be considered by each: What is energy transition? What form should it take? Will developing poor nations have the same transition as developed/industrialized countries? Should the world aim for a net zero carbon situation or a zero carbon one? Is there need for justice in energy transition? What is the role of technology?

In 2015, gathered in Paris, more than 130 countries agreed to work together through a voluntary mechanism called Nationally Determined Commitments (NDCs) to take actions that would limit the temperature rises to less than 2 degrees Celsius and at best aim for 1.5 degrees Celsius above pre-industrial levels. Energy transition thus refers to all the efforts necessary to attain this target in the Paris Agreement. Will the form of this transition however be for nations to take actions aimed to achieving a transition to a lower carbon economy (gradual reduction), immediately and significantly reducing emissions (deep transition) or towards a net zero carbon or zero carbon energy structure? Net zero carbon is a situation where emissions produced are cancelled out by mechanisms that absorb the released carbon dioxide. Such mechanisms include forests, water bodies or carbon capture and other technologies. Zero carbon on the other hand means a situation where there is no release of carbon dioxide from human related activities. The latter is clearly not achievable and looking at commitments of Countries, the aim is rightly a carbon neutral structure. The EACOP activists have argued for a zero-carbon structure. It is clearly impractical and unnecessary.  On the other hand, it is also clear that a deep transition would create significant shocks to the global economy with major challenges, a gradual reduction is thus preferred. Additionally, humans have traditionally relied on technological innovation and development to solve its most pressing challenges. This is no different and there are several technological solutions that have been developed and deployed such as carbon capture and sequestration (CCS).

The transition to attain the 2015 targets must however take into consideration the differences in development and energy mix between the global north and south. It is for instance true that Africa which contributes between 3.8-4% of the global greenhouse gas emissions is grappling with significant energy poverty. Approximately 68% of the population in Sub-Saharan Africa has no access to electricity and relies on biomass. The transition these countries need to take can’t be the same as what developed countries will or ought to take. There is a real case for these countries to develop their natural resources including Oil and Gas to get their people out of both economic and energy poverty. This argument is not only realistic but clearly a matter of justice too. The global North has been emitting carbon dioxide for centuries to fuel growth in their economies and improve livelihoods of its populations. Indeed, this has delivered very rich economies that continue to be the biggest carbon emitters to date. There is thus a valid argument that the global North should have a faster and deeper transition than the rest of the World so poor developing countries can as well have a chance to grow.

These developing countries of the global south must however have an energy transition plan and develop their natural resources, especially fossil fuels in a responsible manner. They must ensure flaring is prohibited, use clean energy in powering projects, ensure energy efficiency in the projects, control fugitive emissions, encourage use of technology such as CCS (where possible) as well as take all necessary efforts to ensure that the projects are as carbon neutral as possible. Uganda and EACOP tick every line in this list save for deployment of CCS.

Turning to the project in the eye of the storm, EACOP. Uganda contributes less than 0.14% percent of global greenhouse gas emissions. It discovered oil and gas resources that could push it forward economically through creation of jobs for its predominantly youth population, enable it produce sufficient Liquified Petroleum Gas (LPG) whose current usage sits at 9% of the population with the majority relying on biomass, generate over USD 20 billion in State revenues to support its infrastructure agenda including irrigation schemes, generation of hydro-power to get most of its population out of energy poverty, improve its balance of payment and industrialize through petrochemical ventures. It is thus clear that Uganda’s development will be significantly impacted by construction of this pipeline that is the key to exploitation of its oil and gas resources upstream. It can be argued that as a very negligible emitter with a predominantly green energy mix (over 80% reliant on hydro), Uganda is entitled to development by responsibly exploiting oil and gas resources. Uganda has however gone a step ahead and ensured that it develops its assets in a sustainable manner and ensure that as much as possible the Country and its projects are carbon neutral.  Uganda prohibits flaring and as such gas produced with Crude oil (associated gas) will be converted into LPG for use by the population. This will have the benefit of significantly reducing use of charcoal and firewood and thereby reduce forest cover loss. Uganda has an aggressive forest restoration agenda and has managed to slow down its forest cover loss, but it remains a major challenge for the Country.

EACOP, as a project has also taken steps to ensure its responsive to climate change matters. When completed, EACOP will be the longest heated pipeline in the World. At a significant cost to the project however, EACOP will not use crude oil generated power but will rather put in place four solar farms to generate power to heat most of the pipeline. The remaining section will be heated using power secured from Uganda’s power grid that is predominantly hydro-generated.

A developmental project of this nature, out of a Country that is generally carbon-neutral and that needs to move its people from energy poverty and protect its forest cover is one justified to be executed in the framework of the global fight against climate change. The activists fighting EACOP need to address themselves to these matters and have a holistic view. It is important that focus is placed on attainment of the Paris Agreement targets by all, but this journey will require different transitions for the global north and global south, justice in the transition, capacity building for developing countries in resilience and adaptability with responsible exploitation of resources like Uganda has clearly done with EACOP and its Upstream assets. EACOP and Uganda should and must therefore be supported. END