Oil Pipeline Through African National Parks - Mihael Gubas




Despite numerous global political warnings and market analyzes that investments in fossil fuels are increasingly portrayed as extremely risky projects (due to expected changes in laws around the world that should start charging a carbon tax), excavation of Africa's largest crude oil pipeline was due to begin last month, from Uganda to Tanzania. The start of work has reportedly been delayed by a month due to the recent death of Tanzania's president, which was key to the project, but in fact, public pressure is so strong that investors have bought time to consider withdrawing from the project.


The East African Crude Oil Pipeline (EACOP) is planned as a 1,443-kilometer pipeline to transport oil from the Albert (Mobutu Sese Seko) field, the seventh-largest lake in Africa, and the second largest lake in Uganda, across the area of national parks to the coastal city of Tango, the second largest port in Tanzania. Part of the oil will supply local fuel needs, and part would be exported to the international market. Without the latter, it doesn't go well, and the shares in the ownership of the pipeline testify to the distribution of cakes. As much as 45 percent of the ownership of the pipeline is owned by French oil giant Total, another 35 percent is owned by China National Offshore Oil Corporation, for a total of 80 percent ownership of the project, while the remaining 20 percent is shared between Uganda National Pipeline Company which owns 15 percent ownership, and ultimately, Tanzania Petroleum Development Corporation has a 5 percent ownership stake. But international influence does not end there. With the pipeline being financed by debt worth $ 2.5 billion, Uganda and Tanzania are counting on Standard Bank loans from South Africa and Total on deposits from Japan's Sumitomo Mitsui Banking Corporation.

Although this pipeline has been planned for 15 years, it was signed only in October 2020, and due to increasing public pressure, it is currently hanging in the balance, as it seems that South African Standard Bank is about to withdraw the negative publicity of the project increasingly promising taxes and fees for further climate pollution. The pressure on European companies operating outside the home continent is growing at home as well, as the European Union plans various forms of carbon finance penalties and levies. Although this has been talked about for some time, the matter is becoming serious enough that investors in global projects are also wondering about the future value of the investment. If the negative contribution to the climate is converted into financial penalties, then potential investments in oil get a negative sign in the spreadsheets.


Meanwhile, the people are doing their part, protecting the public interest. Nearly a million people have signed a petition to shut down the East African pipeline, and activists are "furiously" lobbying international banks not to approve loans for the project. Activists point out that Ugandan residents are up to one hundred percent dependent on nature and the relationship with it because nature dictates their social and environmental structure, so the passage of the pipeline through national parks terribly angers locals. Any environmental pollution has an immeasurably high cost to the lives of the population. The final decision on whether the project goes further will reportedly be made by the end of March.

It is estimated that 1.7 billion barrels of renewable oil were discovered in the basin of Lake Albert, on the border between Uganda and the Democratic Republic of Congo. According to current plans, oil extraction should take place in two fields managed by Total and the Chinese state oil company CNOOC, in partnership, writes Climate Change News. The East African Crude Oil Pipeline (EACOP) is expected to transport 216,000 barrels of heavy crude oil daily from Uganda's oil fields to Tanga's port of Tanzania through "environmentally sensitive areas." If it is ever completed, it will be the longest heated oil pipeline in the world. Due to the low sulfur content, the oil will be heated above 50 ° C. Heat stations and a high-voltage power supply line is planned along the pipeline, which will be buried for safety reasons. Plans for a refinery are also underway. When it burns, the oil transported by pipeline will emit 33 million tons of CO2 a year, according to NGO estimates. That's more than the greenhouse gas emissions that Uganda and Tanzania currently produce together.

In addition to the horrific greenhouse gas emissions at the excavation site, the pipeline threatens a 2,000-square-kilometer protected area of Murchison Falls National Park in Uganda, where protected wildlife habitats crucial to the conservation of elephants, lions, and chimpanzees are located. As many as ten oil wells are planned in that national park. Although this information will sound extremely strange to most, the French Total sends a statement explaining that they "voluntarily limit their activities in the park to only 1 percent of its area, despite permits covering 10 percent of the protected area. However, this is no longer enough for the public, so given the climate consequences facing countries on the global periphery, informed residents are finally overwhelmed. No wonder then that the petition was signed by more than a million people. However, the devastation of protected nature by pipeline does not stop at one national park, but the plan is for it to pass under the Nile River and reach the area of the Bugoma forest reserve, then the Lake Victoria basin on which 40 million people depend (for water and food) and international environmental significance. In order for the pipeline to be realized, it is also necessary to relocate 723 households to which a new house or financial compensation is planned. However, five years after the beginning of preparations for the construction of the pipeline, households whose plots have already been registered have not received any compensation; land use is prohibited while waiting for the start of the project. As people in the area depend on the crops they grow for their diet, frustration grows. Even the promises of new jobs that the pipeline would bring do not bring comfort to local authorities who say they doubt the realization of it, as the local population does not have the qualifications needed to work in the oil industry.

At the beginning of the month, 263 environmental organizations joined the current descriptive situation and sent an appeal to the addresses of 25 banks not to finance the pipeline. The open letter notes that the project is "incompatible" with the goals of the Paris Climate Agreement and "obviously irresponsible" at a time of increasing climate impacts. Several banks have already distanced themselves from the project. Barclays and Credit Suisse do not support EACOP, while the African Development Bank says the pipeline is not part of its lending program and is committed to renewable energy. But South Africa's Standard Bank - which lends to Uganda and Tanzania - says it is waiting for a comprehensive social and environmental assessment before making a decision. Their withdrawal could deal a final blow to the suspension of the project. But equally important is the withdrawal of European credit institutions, which are finding various ways to participate at least indirectly in the distribution of this cake, so the British are building an international airport in the area of the pipeline. Activists point out that the participation of any European institutions in the construction of the pipeline would expose Europe's double standards: a clean environment at home, investment in pollution in Africa. Doubts about this project have intensified in the last year due to global oil price movements and a significant drop in demand caused by quarantines around the world. Whether the project goes further or not will ultimately likely depend on the decisions of the Ugandan and Tanzanian governments, and their views will be greatly influenced by the possibility of winning the next election, especially in Tanzania, given the recent death of the president. Public consensus against the pipeline has never been more important, but also, media freedom and the state of civil society in Tanzania is far from what such a consensus can produce.