Esso Higliands Limited - Uncharted wilderness


Uncharted wilderness: a detailed program for protecting biodiversity while developing liquefied natural gas infrastructure in one of the world’s least explored regions

Papua New Guinea Liquefied Natural Gas Project (PNG LNG), operated by Esso Highlands Limited (EHL), a subsidiary of Exxon Mobil Corporation

Identification of the relevant tip(s)
Tip 4: Consult openly 
Engage in open dialogue with a diverse group of interested stakeholders. This is an effective means of leveraging local ecological knowledge, understanding the value of traditional ecosystems, learning how natural resources are used and avoiding potential resource conflicts.

Tip 7: Understand interdependence
Conduct early, high level screening of project dependencies to identify risks related to resource competition. Ecosystems do more than support wildlife: for example, resources such as land and water may be critical to the operation of oil and gas facilities in addition to their contribution to habitat and community needs.

Tip 9: Make your benefits mutual
Understand social and economic needs and potential impacts to find solutions that integrate ecosystem health with human well-being and economic progress. This should minimise conflict between socioeconomic development and conservation goals.

Executive summary
Esso Highlands Limited (EHL), a subsidiary of Exxon Mobil Corporation, is the operator of the Papua New Guinea Liquefied Natural Gas Project (PNG LNG), which includes gas production and processing facilities, liquefaction and storage facilities, and more than 450 miles of related pipelines. As part of the development activities related to the project, EHL has developed a Biodiversity Strategy, which outlines how PNG LNG has and will continue to manage terrestrial biodiversity in its Upstream Project Area.

As part of this Biodiversity Strategy, EHL is also developing an extensive technical rationale for biodiversity offset selection, scoping potential offset areas, activities and partners and assessing the feasibility of a number of options to implement the plan.

The Papua New Guinea Liquefied Natural Gas (PNG LNG) project will involve production of natural gas and associated liquids from new and existing wells in the Southern Highlands and western provinces of PNG. The liquids will be separated and transported via the existing crude oil export pipeline to the Kumul Marine Terminal in the Gulf of Papua for export, while the dry gas will be transported in a buried pipe from the highlands to the Gulf of Papua, then undersea to an LNG plant near Port Moresby where it will be liquefied and shipped to customers in Asia. The Project is operated by EHL on behalf of itself and co-venturers. It will be developed in six phases over a period of 16 years, with first LNG deliveries scheduled for 2014. Phase I of the Project (Initial Development and Drilling) is under construction as of August 2012.

Other than the LNG Plant which is located in the National Capital District of Port Moresby, the Project is primarily located in the Kikori River Basin. This area is termed the Upstream Project Area and spans the Gulf Province in the Papua Region and the Southern Highlands Province and (new) Hela Province in the Highlands Region (see Figure 1).

Approximately one-third of the new onshore pipelines in the Upstream Project Area will be co-located within existing pipeline corridors. The Upstream Project Area is known for high biodiversity values and is the site of the Kikori Integrated Conservation and Development Project (KICDP, now called the Kikori River Program), a WWF conservation initiative supported initially by Chevron Asiatic Ltd and then by Oil Search Limited.

Consultation is a key component of EHL’s planning for biodiversity and is essential in order to maintain transparency and develop good working relationships with stakeholders. To date, EHL has met, in many cases on several occasions, with the following organisations: Conservation International (United States and PNG), Ecoforestry Forum PNG, Environmental Law Centre PNG, Institute for Applied Ecology (University of Canberra), Institute of Biological Research (IBR) PNG, Mama Graun Conservation Trust Fund PNG, New Guinea Binatang Research Centre PNG, Partners With Melanesians Inc., Peace Foundation Melanesia, PNG Conservation Forum, Research and Conservation Foundation of PNG, Tenkile Conservation Alliance, The Nature Conservancy (Unites States and PNG), Wildlife Conservation Society PNG, Woodlands Park Zoo (Seattle), World Wildlife Fund Western Melanesia (PNG) and YUS Conservation Area Project.

Stakeholder engagement will continue to be a key component of EHL’s planning and decision making for biodiversity management. It should be noted that limited engagement has so far been undertaken with community stakeholders. Extensive consultation and engagement with communities is planned during, and as the basis for, implementation of EHL’s offset program.

EHL’s Biodiversity Strategy draws extensively on the PNG LNG Project Environmental Impact Statement (EIS) and its Environmental and Social Management Plan (ESMP). These in turn relied on biodiversity impact and management analyses of field data collected by WWF in its KICDP initiative and new surveys carried out by EHL from 2005 to 2009.

The Biodiversity Strategy is designed to align with PNG legislation, International Finance Corporation (IFC) Performance Standard 6 and ExxonMobil policy.

The Biodiversity Strategy defines biodiversity values in the main area of EHL’s operations, termed the Upstream Project Area. These values have been defined at three scales: the large scale, which is the entire Upstream Project Area; the medium scale, which is represented by particularly valuable areas termed priority ecosystems; and the local-scale which are sensitive habitats referred to as focal habitats.

Based on the surveys conducted over the past 15 years, biodiversity values have been defined for the Upstream Project Area as:

  • Extensive intact forest.
  • High floristic diversity.
  • High faunal diversity.
  • Endemic species.
  • Unique assemblages of species.
  • Species of conservation concern.
  • Biodiversity of importance to local communities for resource use and cultural and spiritual purposes.

The overall goal of the biodiversity strategy is to retain the biodiversity values of the Upstream Project Area on a regional scale for the long term. To achieve this goal, EHL has adopted a series of objectives at several scales. These objectives are to:

  • Maintain the ecological intactness of the Upstream Project Area as a whole – the long-term maintenance of biodiversity requires long-term functioning of the ecosystems in the Upstream Project Area. This objective is realised by mitigating potential Project related impacts capable of system-wide effects on function such as invasive species, fire and uncontrolled access leading to wide-scale deforestation and defaunation.
  • Conserve priority ecosystems – some project infrastructure will be built within the priority ecosystems and therefore it is necessary to mitigate Project related impacts during construction. In some cases this requires changes to Project design and the development of specific mitigation measures and will require ongoing management and control during operations.
  • Protect focal habitats – focal habitats are avoided or otherwise managed during construction to prevent the reduction in a population of a critically endangered or endangered species.
  • Account for residual impacts – impacts to biodiversity values which cannot be avoided or otherwise mitigated (residual impacts) and losses will be accounted for through offset.

These objectives are to be delivered through a hierarchy of management and mitigation (The Mitigation Hierarchy) which is based on i) identification of biodiversity values, ii) avoidance of impacts to the identified values, iii) where avoidance is not feasible, implementation of management and mitigation measures in order to reduce the severity of impact and iv) offset of impacts which cannot be avoided or mitigated (see Figure 2).

The identification of biodiversity values and the evaluation of potential risks and impacts to such values as a result of the Project were undertaken in large measure as part of the Environmental Impact Statement and are summarised in the Biodiversity Strategy. The identification and evaluation process continues as part of the environmental pre-construction surveys undertaken during Project construction.

To achieve these objectives, avoidance, mitigation and monitoring of impacts on biodiversity values will be implemented at three levels: (i) large scale, which is the entire Upstream Project Area; (ii) medium scale, which is represented by particularly valuable areas called ‘priority ecosystems’; and, (iii) small local-scale focal habitats.

Avoidance of impacts on biodiversity in the Upstream Project Area has been factored into feasibility, planning and design since the Project’s inception. In practice, this has meant considering avoidance measures at discrete phases of the Project and at discrete scales, the latter within the Upstream Project Area aligning with the identified three scales of biodiversity values. The primary avoidance measures involved optimisations undertaken during the selection of sites for Project facilities and onshore pipeline routing. These measures are described in detail in the Environmental Impact Statement and summarised in the Biodiversity Strategy. Avoidance of impacts to biodiversity values continues during Project construction, through implementation of the Environmental and Social Management Plan.

In particular, the following components of the ESMP are relevant to the protection of biodiversity:

  • Ecological Management Plan – the overall objective of this plan is to avoid where practicable and reduce impacts on terrestrial, aquatic and marine habitats and specific habitat features of ecological importance.
  • Weed, Plant Pathogen and Pest Management Plan – the objectives of this plan are to prevent exotic invasive species from entering or becoming established in the Project Area, and to identify, contain and suppress priority invasives already there.
  • Induced Access Management Plan – the objectives of this plan are to control access to new Project roads and reduce the occurrence of potentially damaging non-project activities (i.e., via improved access).
  • Erosion and Sediment Control Management Plan – the objectives of this plan are to maintain stable landforms to reduce erosion and enhance reinstatement and reduce adverse impacts on stream water quality and associated beneficial values.
  • Reinstatement Management Plan – the objectives of this plan are to establish stable landform conditions in areas disturbed as a result of construction activities and create ground conditions conducive to natural plant regeneration.
  • Cultural Heritage Management Plan – the objectives of this plan are to avoid and otherwise manage cultural heritage sites (including both archaeological sites and oral tradition sites).
  • Quarantine Management Plan – the objectives of this plan are to prevent importation to Papua New Guinea of foreign weeds, pathogens or pests.

Avoidance of impacts is a key component of the ESMP. Where avoidance is not possible or practicable, the ESMP prescribes other management and mitigation measures to reduce the severity of impact.

A key enabler of biodiversity management during construction is the environmental pre-construction survey program, through which surveys are undertaken at every worksite to identify sensitivities present and enable the application of site specific mitigation and management measures. The scope of the pre-construction field surveys includes the identification of ecological constraints and sensitive features to be avoided, high risk areas for new weed and pest invasion, areas of infestations of priority weeds or pests that require management, Nothofagus (Beech) forest susceptible to fungal disease and dieback and cultural heritage (archaeological and oral tradition). The information gathered as part of each survey is included in a pre-construction survey report which establishes measures to prevent, mitigate and otherwise manage impacts to identified sensitivities.

EHL implements a self-assessment program, the objective of which is to evaluate and verify implementation of environmental management commitments during construction and address any deficiencies identified through corrective action. Results of the self-assessment program are disclosed in EHL’s Quarterly Environmental and Social Reports.

Recognising that there will remain some residual impacts on biodiversity values, biodiversity offsets will play an important role in implementing the Biodiversity Strategy.

EHL has developed an offset program which has the overall objective of achieving no net loss of biodiversity and the offset of residual impacts and losses which may eventuate as part of the PNG LNG Project. The offset program is documented in EHL’s Biodiversity Offset Delivery Plan (under development at the time of writing).

Residual impacts are predicted in the Environmental Impact Statement to be direct impacts including overall habitat loss and direct effects on fauna (edge and barrier effects) and indirect impacts including potential introduction and spread of invasive species and enhanced access.

Extensive consultation has been undertaken to inform the development of the Biodiversity Offset Delivery Plan and disseminate information to key stakeholders. The consultation process has also been used to identify potential partners for delivery of the offset program. Building on informal consultation undertaken in 2010, during the course of 2011 EHL undertook formal consultations with key stakeholders including national and international non-government organizations and the PNG Department of Environment and Conservation.

EHL signed a collaboration agreement with Conservation International (CI) in June 2011. During a first phase, CI has provided recommendations that will be utilised by EHL to finalise the Biodiversity Offset Delivery Plan in tandem with broader stakeholder consultation. CI’s scope of work is to develop a technical rationale for offset selection, identify potential offset areas and activities, assess potential partners and consider offset implementation feasibility.

On the basis of stakeholder consultation and the work done by Conservation International, EHL has developed a set of criteria which drive the design of the offset program and the selection of individual offset projects and combinations thereof.

Biodiversity offsets implemented by the Project will be tailored to PNG conditions where landholders are the dominant factor in conservation management. Because there is currently no legislative framework for biodiversity offsets in PNG, relatively straightforward offset mechanisms such as compensation funds and mitigation banks are not immediately feasible. The biodiversity offset program for the Project will focus on area-based conservation through strengthening existing protected areas and establishing new protected areas, supplemented by other targeted projects where appropriate. The biodiversity offset program will be consistent with PNG’s conservation priorities which are focused on the development of a functioning and representative protected area system and the retention of large scale forest cover and habitat integrity. Priority will be given to strengthening and enhancing existing protected areas over the establishment of new protected areas.

In recognition that the offset program will likely involve community based conservation activities; there is synergy between this program and EHL’s strategic community investment work. Consequently, EHL’s Environment and Land and Community Affairs organisations are working closely together to identify opportunities (and constraints) to add value to both work streams.

EHL proposes a collaborative approach to the delivery of the offset program, based on collaborations between EHL and various specialist organisations, consultancy firms, not-for-profit organisations (conservation and other NGOs) and other stakeholders, including the communities directly involved and the PNG Department of Environment and Conservation (DEC). Communities which are directly involved in conservation activities will form the basis of collaborations. EHL recognises the important role conservation-oriented and other specialist NGOs have in the design and delivery of conservation and protected areas in Papua New Guinea, and will engage with such NGOs, in the appropriate capacity, as part of the offset program.

In all cases it is EHL’s intent that partnerships combine and take advantage of the particular strengths of each individual and organisation involved.

In order to evaluate whether the objectives of the Biodiversity Strategy are being achieved, EHL will implement a biodiversity monitoring program. This program is set out in the Biodiversity Monitoring Plan (under development at the time of writing) and will provide biodiversity related information throughout the production phase of the PNG LNG Project through a set of Programmed Monitoring Activities (PMA), each designed to provide separate but complementary data sets.

The PMA include the use of remote sensing to monitor indirect impacts within the Upstream Project Area and to enable estimation of final forest loss resulting from construction, regular aerial inspection of the condition of the onshore pipeline right of way (RoW), regeneration surveys to evaluate the progression of successions and faunal communities following construction, and in-field biodiversity surveys.

Lessons learnt

  • Community outreach is critical. Community involvement and consultation is an important part of the PNG LNG Project. EHL is committed to engagement with local communities and landowners about the Project, via both formal and informal consultation, and to communicate in an open, transparent and approachable manner. EHL believes in two-way communication that is open, honest, timely, respectful and responsive.
  • Recognition of local values and cultures is necessary. Meeting social, cultural and economic objectives requires that EHL recognise the unique attributes and needs of all local communities.
  • Implementation of the mitigation hierarchy is key. This means i) identification of biodiversity values, ii) avoidance of impacts to the identified values, iii) where avoidance is not feasible, implementation of management and mitigation measures in order to reduce the severity of impact and iv) offset of impacts which cannot be avoided or mitigated.
  • Identification of biodiversity values in an area such as PNG requires extensive in field surveys.
  • Robust linkage of measures to protect biodiversity is required as part of environmental management planning, including measures relating to the management of ecology, weeds and plant pathogens, erosion and sediment control, induced access, reinstatement, cultural heritage and quarantine.
  • One off approach to offsets. There is currently no legislative framework for biodiversity offsets in PNG therefore relatively straightforward offset mechanisms such as compensation funds and mitigation banks are not immediately feasible and a one off approach to offsetting is required.
  • Conservation approach to offsets. The only practical way in which to offset residual impacts and losses is through conservation. An offset program should therefore involve area-based conservation, either through the strengthening of existing protected areas and/or establishment of new protected areas, and species-based conservation.
  • Integration with conservation priorities. Conservation priorities in PNG are focused on the development of a functioning and representative protected area system and the retention of large scale forest cover and habitat integrity. An offset program in PNG should be consistent with these priorities.
  • Community ownership and management of conservation. Nearly all land in PNG is subject to customary tenureship and conservation requires the consent, pledge of land and active participation of land-owners. Conservation should be community owned and managed.
  • Representative offsets. An offset program should be representative of the biodiversity values affected by the Project.
  • Stakeholder consultation. Extensive stakeholder consultation is necessary to maintain transparency, and disseminate information to and develop working relationships with stakeholders.

Contact information
Steven Whisker
Esso Highlands Limited
PNG LNG Project