May 5, 2010

Risk assessment or risk ignorance? “Deep Horizon” over the “Nord Stream”

April 9th, 2010, Portovaya Bay in the Gulf of Finland: first meters of the underwater “Nord Stream” gas pipeline, which will directly connect gas sources in Russia with its lucrative markets in Western Europe, are laid to the sea bottom. April 21st, 2010, the Gulf of Mexico: “Deep Horizon” offshore oil-rig, leased by BP, explodes and sinks, opening uncontrolled stream of oil gushing into the sea and, by now, threatening to become one of the worst environmental disasters for the U.S. southern coast. Except of these two events taking place in the same month and being related to energy supply as well as happening at the sea, is there anything else in common between them?

April 9th, 2010, Portovaya Bay in the Gulf of Finland: first meters of the underwater “Nord Stream” gas pipeline, which will directly connect gas sources in Russia with its lucrative markets in Western Europe, are laid to the sea bottom. April 21st, 2010, the Gulf of Mexico: “Deep Horizon” offshore oil-rig, leased by BP, explodes and sinks, opening uncontrolled stream of oil gushing into the sea and, by now, threatening to become one of the worst environmental disasters for the U.S. southern coast. Except of these two events taking place in the same month and being related to energy supply as well as happening at the sea, is there anything else in common between them?

Indeed, some parallels can be drawn between how the energy companies behind these projects conduct risk assessments. There will be a lot of digging into BP’s records on “Deep Horizon”, during which many new facts will emerge. What is clear at this point, however, is that the company received the approval of the U.S. authorities to install an offshore platform and drill oil on a basis of a rather frivolous risk assessment. In the environmental impact study, the company claimed that the risk of a catastrophic oil leak was minimal, almost zero. And that even if it did happen, distance from the coast as well as formidable BP’s capability to handle it meant there was nothing to worry about. We see now that this assessment and its reassurances are not worth the ink and paper expended to publish it. The company seems to have grossly underestimated the dangers of operating “well past the point of technological know-how and safety” to access new, previously inaccessible, sources of oil, and was ill-prepared for the worst case scenario.

Is the “Nord Stream” a different case compared to “Deep Horizon”? Public opinion surveys in Estonia show that sea pollution is seen by members of the society as most probable risk, so it would be natural to ask hard questions about the pipeline’s environmental impact during the construction and exploitation phases. We heard many assurances from the pipeline consortium and even from Russia’s Prime Minister that it is perfectly environmentally safe, that hundreds of millions had been spent on studying the route and that no toxic sediment or chemical weapons, dumped into the sea after the World War II would be disturbed. Perhaps we should accept these assurances. After all, Swedish, Finnish, Danish and German governments, which would eventually be responsible for any environmental emergency management in their Exclusive Economic Zones, granted their permissions. This should attest to the quality and credibility of the environmental impact assessment and risk analysis, presented by the “Nord Stream”, right?

The problem is that such assessments are commissioned and financed by the party most interested in having the project approved. So they deserve the most rigorous scientific and methodological scrutiny that the governments could possibly marshal to their service. And there are worrying signs that this scrutiny has been lacking in the case of “Nord Stream”.

For the last few months, in the framework of the EU-sponsored Crescendo Project, I have been conducting interviews for a research report on Estonia’s national security system. The report included management of marine environment protection. Thus, although being a defence analyst, I had an opportunity to explore the aspect which is rather distant from defence and military security but is equally pertinent to the Estonian society. Naturally, the “Nord Stream” issue was on the table during many of the interviews, and a couple of insights gleaned from discussing it are worth mentioning in the context of risk assessments.

First, the Estonian environmental security community does not appear very convinced about the credibility and comprehensiveness of “Nord Stream” environmental impact study. (I have to respect the non-attribution principle which was followed during my research here, so no names can be given). Some say way too little data was collected about the sediment along the route and that only a very thin layer of the sea bottom was examined. One highly respected scientist also told that certain models, used by his Finnish counterparts contracted to conduct an important bit of the environmental impact analysis, were not scientifically validated. This essentially means that the results obtained using them cannot be considered reliable.

If so, where are the guarantees that the rest of the glossy paper can stand the scrutiny? Did the Finnish, Swedish, Danish and German governments really examine it with sufficient rigour? Or did they succumb to some political imperatives, just as it happened with President Obama before the “Deep Horizon” disaster? (In exchange for getting his agenda of combating climate change rolling through the Congress, he was planning to open new coastal areas for oil drilling, made out of reach to oil industry after a major environmental disaster off the coast of California in 1960s; indeed, just a month before the “Deep Horizon” disaster, he declared that “oil rigs today generally don’t cause oil spills”). Last, but not least, are there mechanisms and methodologies in place to monitor the environmental impact during the pipeline’s construction and during its use?

It seems it is not only billions of Euros that are being invested into this project, but also loads and loads of public trust – in the assurances of the pipeline consortium, integrity of the scientists who conducted the environmental impact assessment, rigour and wisdom of governments which issued the permits, disaster mitigation and consequences management preparedness of both “Nord Stream” and the region’s governments. Hopefully, nothing will happen and, five, ten or twenty years down the road, risk assessments will not appear, from the position of hindsight, as awful risk ignorance and negligence. But hope is not a method, as any prudent risk manager would tell you.

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