Tackling Aboveground Risks: The Tale of Three Pipelines

Growth in global energy demand has pushed oil and gas companies to the frontier in search of oil and natural gas reserves to feed hungry economies. This has increased aboveground risk for companies building pipelines to bring oil and gas reserves to market. In this Private Report, CERA examines the critical environmental and social issues faced by developers of three pipelines-Camisea, Chad-Cameroon, and Baku-Tbilisi-Ceyhan. All of the challenges and responses provide critical lessons for oil and gas companies involved in any major infrastructure investment.

* Social and environmental issues are rarely permanently resolved. Early identification of potential social and environmental risks is essential, but not sufficient. These risks pop up repeatedly, both on a seemingly random basis and at critical transition points.
* Although strong sponsors can push a project forward, collaboration with a wide range of organizations is an essential component of strategy. Long-distance oil and gas pipelines increasingly cross national borders, cut through sensitive environmental areas, affect the livelihoods of indigenous people, and support regional economic development plans. Project sponsors are assembling teams that include commercial, diplomatic, and community development expertise with the influence necessary to break through barriers that arise.
* The role of energy companies in the local communities continues to evolve beyond philanthropy and bricks and mortar. Energy companies are continuing to experiment with new approaches, using multidisciplinary teams to address the environmental and social impacts of energy projects. Through these teams, companies are looking for opportunities to help communities create local development councils and diversify local economies, testing new ways to break the cycle of dependence.

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CERA Reports Online, a wholly owned subsidiary of IHS Energy, is a leading advisor to international energy companies, governments, financial institutions, and technology providers. CERA delivers critical knowledge and independent analysis on energy markets, geopolitics, industry trends, and strategy. CERA's expertise covers all major energy sectors--oil and refined products, natural gas, and electric power--on a global and regional basis.