By Robert Magori

Nairobi, Oct 27 – The proposed East African Crude Oil Pipeline (EACOP), which is expected to be the longest heated crude oil pipeline in the world at 1,443 kilometres running from the shores of Lake Albert in Uganda to the port town of Tanga on Tanzania’s Indian Ocean coast, could cause large-scale displacement of communities and threaten protected environments, including water sources and wetlands in both countries.

The planned pipeline is intended to transport 216,000 barrels of oil a day, meaning that emissions from burning the oil transported through the pipeline alone are estimated at 34 million tonnes of CO2 per year. This is equivalent to the annual emissions of Denmark, at a time when the world’s scientists said that new fossil fuel developments need to stop if we are to have any hope of diminishing climate change.

Since the discovery of oilfields in 2006, Tullow Oil, Total, China National Offshore Oil Company (CNOOC) and the Ugandan government have wrangled over taxes and recoverable costs. Total recently acquired 33 per cent of Tullow Oil’s stake meaning Total now owns the lion’s share of the project. The company argues the project is in the host countries’ interests socially and economically. Despite these promises, there is growing skepticism and indeed opposition to the project from local communities and organisations who have voiced concern over the potential negative environmental and socio-economic impacts.

Concerns have been raised on the impact of oil extraction on wildlife and natural habitats in the Murchison Falls National Park and on Lake Albert fisheries. The pipeline will cross key forests in Uganda and Tanzania and affect wetlands such as Katonga, a Ramsar site. An oil spill could have long-lasting disastrous consequences on Lake Victoria, the world’s second-largest freshwater lake on which millions of people rely to access water, fisheries and food production. The pipeline is designed to run for hundreds of kilometres over the lake.

Local community concerns

Local communities have voiced concern over the project’s impact on their lives despite promises of compensation and employment.

As detailed in the Environmental and Social Impact Assessment (ESIA) for the Ugandan section of the pipeline, there are issues concerning compensation for loss of land, livelihoods and other property. There are fears that there will be forced resettlement and that air quality will be compromised.

It is worth noting that the Africa Institute for Energy Governance (AFIEGO), a Ugandan public policy research organisation and a civil society group, urged Uganda’s National Environmental Management Authority (NEMA) to reject the published ESIA report. AFIEGO’s analysis of the gaps in the document pointed to a failure to adequately consider the negative impacts of the project to community livelihoods and ecosystems.

An independent quality review of the ESIA commissioned by NEMA and undertaken by the Netherlands Commission for Environmental Assessment concluded that the report was biased, pointing out that it highlighted positive aspects of the project and seemed to downplay the negative consequences. Economic benefits were spelt out while potential negative effects were shown as being insignificant.

The ESIA for Tanzania is not any better as it highlights key environmental concerns but does not provide satisfactory mitigation measures.

Financiers

South Africa’s Standard Bank, through its Ugandan subsidiary, Stanbic and Japan’s Sumitomo Mitsui Banking Corporation (SMBC) are the lead financiers of the pipeline and would between them provide some $3.5-billion for implementation of the project.

It has been clear from the outset that the project is incompatible with the goals of the Paris Climate Agreement and other financial institutions have come out openly to reject financing of the EACOP. In April 2020, the African Development Bank (AfDB) released a press statement rejecting claims of financial support to the controversial pipeline.

Now, with industry analysts saying that global oil demand may have already peaked, a new crude oil pipeline with a 25-year life span and a $3.5 billion price tag looks more and more like a stranded asset waiting to happen. If EACOP does proceed, the financiers will be under pressure to show how they will comply with the Equator Principles, a set of guidelines designed to promote environmental and social responsibility in project financing.

Robert Magori is the Africa Communications Manager at 350.org