Environmental Regulation of Upstream Sector of Oil and Gas Industry

Abstract

The extraction of hydrocarbons is an inherently hazardous activity with potential grave risks to the general environment. Environmental woes occur during all the stages of oil and gas cycle but more notable during the upstream stage of operations. The upstream stage involves exploration, appraisals and production. This stage is accompanied by a range of environmental issues like accidental spills and blow out during development stage, operational discharge and atmospheric emissions like gas flaring during production stage. Major incidents like Ecuador rain forest pollution, Piper alpha offshore disaster (1988), gas flaring in Nigeria, Montara accident (2009) and macondo blowout (2010) are but a few examples. This paper evaluates different approaches employed by governments to minimise the risk of upstream operations on the environment. The evaluation will also show how these approaches work and criticisms levied and offer an opinion on what the writer considers the best approach. It is the author's hypothesis that a combination or two or more approaches could be the best option depending on the host country's legal framework.