Petroleum is passéThose who insist that fossil fuels are required for development are living in the past
Prime Minister KP Sharma Oli is known for making bizarre public statements. Last May, he proclaimed that Nepal would start producing petroleum within the next two years. That may be quite farfetched, but his announcement was inspired by a Chinese team’s visit to different sites to study the potential existence of hydrocarbons. However, getting into fossil fuel exploration does not make socio-economic and ecological sense in the current national and global context.
Nepal, fully dependent on imported fossil fuels, has a fairly long history of initiatives in petroleum exploration. Preliminary geological surveys were carried out as early as the 1960s. Systematic exploration activities began in the late 1970s. In 1982, the World Bank-supported Petroleum Exploration Promotion Project started seismic surveys in the Tarai region and geochemical analyses, among other activities. The entire Tarai region of Nepal was divided into 10 exploration blocks, and foreign oil companies were invited to conduct explorations. Dutch oil company Shell was awarded an exploration permit in 1996. The company abandoned its search and left after four years of failed operations in eastern Nepal. Similarly, a US company Texana obtained a permit from the Nepal government in 1998. A few years later in 2004, a Scottish company Crain Energy signed a deal to prospect for oil in five blocks in violation of the Petroleum Act that states that a company cannot be awarded more than two exploration blocks.
In 2012, US-based BBB Champions was granted a permit to conduct explorations in the block that had been abandoned by Shell. Likewise, UAE-based EABG was assigned two exploration blocks. Texana and Crain withdrew in the same year citing force majeure. BBB Champions and EABG never started their operation. The recent field visits by a Chinese team happened after Prime Minister Oli’s visit to Beijing when the Chinese government agreed to support Nepal in petroleum exploration.
Fossil fuel exploration is a risky business involving high-tech tools, complex procedures and a huge investment. There is no assurance that explorations and the accompanying investment will result in the discovery of petroleum and natural gas in commercial quantities. Nonetheless, the exploration process has detrimental environmental impacts. They include destruction of the ecosystem and change in land use patterns, air, water and soil pollution, ground water contamination, human health risks and safety problems associated with contamination, explosives and accidental blow-ups.
Let us assume that fossil fuel deposits are discovered in Nepal in commercial quantities. The development and production will again be a costly business. The global fossil fuel industry relies on massive subsidies. A report by the International Monetary Fund (IMF) in 2015 found that the global fossil fuel industry receives $5.3 trillion a year in subsidies. A 2014 report by UK-based Overseas Development Institute estimated that the G20 countries were spending $88 billion every year in subsidising fossil fuel exploration. Even thinking of Nepal’s subsidising fossil fuel exploration and production is absurd because there are more important areas the country needs to invest in.
If we look at the history of production and consumption of petroleum products, we see that it promotes human rights abuse, war, corporate globalisation, inequality, and most importantly, global warming. The current climate catastrophe is a direct consequence of the reckless burning of fossil fuels. Scientists have calculated that only 16 percent of the known fossil fuel reserves can be burned to keep the global temperature rise at less than 1.5 degrees Celsius, the safe limit beyond which vulnerable countries like Nepal will face unimaginable impacts of climate change.
In such a scenario, there is no point exploring for more oil. Many scientists, activists and communities across the world have demanded a moratorium on further exploration, fossil fuel phase out and transition to clean energy as soon as possible. Costa Rica issued a moratorium on oil exploration in 2011, and in 2014 it extended the ban until 2021. Norway will completely ban all fossil fuel-based cars by 2025. Even oil major Saudi Arabia has announced a post-oil $2 trillion fund for a transition to clean energy. Likewise, neighbouring India and China have planned big for clean energy. Many communities in the Niger Delta, Amazon and elsewhere are telling their governments to “leave fossil fuels in the ground”.
In such a scenario, Nepal’s move towards petroleum exploration is walking against the tide. For an ecologically sensitive and climate vulnerable country, fossil fuel exploration will only bring massive displacement, loss of vast agricultural lands leading to greater food insecurity, loss of biodiversity and deterioration of the natural environment. This is also against many environmental commitments and pledges that Nepali leaders make at multilateral forums and present the country as a victim of climate change, the very result of fossil fuel production and consumption.
Those who still insist that fossil fuels are required for Nepal’s economic development are living in a bygone era. There is no denying that the past three centuries of development in the Western world were powered by petroleum products. But that also brought about the ongoing ecological and economic catastrophe. Fossil fuels are weapons of mass destruction in the present world. Meaningful prosperity and well-being can be achieved through the rational production and utilisation of clean energy resource—hydropower, solar and wind—which Nepal has in plenty. In this transition, we also need to shift the way we use energy in buildings, transportation, food production, manufacturing and other sectors. For example, mobility does not only mean relying on buses, trucks, cars and motorbikes that run on fossil fuels. There can be a whole range of non-motorised transportation options, electric vehicles, cable cars and trains.
Nepal has a chance to become a champion of the post-carbon civilisation by calling a ban on petroleum exploration in its territory and focusing on clean energy transition. The still undiscovered fossil fuel reserves underneath can remain as an ‘underground national park’.
Acharya is associated with Kathmandu-based research and advocacy organisation Digo Bikas Institute