The Kashagan oilfield is located in the nature reserve area of the northern part of the Caspian Sea. The waters here are shallow with depth of two to ten meters. Moreover, the area has an extreme weather conditions with hot summers and cold winters. Due to the shallowness of waters and harsh climate, the surface of water is covered with an ice sheet for half a year. Artificial islands, made of sand and covered with a special film that protect the islands from hydrocarbon waste, were constructed in order to tackle the issue. Due to the climate of the area, oil extraction and transportation are complicated, any issues caused in the course of operations can lead to serious environmental consequences. Moreover, like most of the other oilfields in Kazakhstan, there is a high content of hydrogen sulfide in the oil, which is very corrosive and dangerous gas. In order to protect the equipment from this corrosive gas transportation pipes are coated with nickel and wrapped with inert to hydrogen sulfide material. Visible damage such as air pollution, biodiversity loss, deterioration of water quality are apparent at the field. Besides, it also bears potential risks such as genetic contamination, soil contamination, waste overflow, oil spills, and disturbance of hydro and geological systems. Therefore, it is important to operate the field following effective environmental regulations and guidelines, while using quality equipment and well trained personal.
Oil and gas production at the Kashagan oil field was started in September 2016. An unsuccessful launch of the project took place earlier in September 2013. A gas leak from a pipeline caused by corrosion due to high content of hydrogen sulfide was located immediately after the initial production. The accident did not have serious consequences which could have been devastating if it happened on a larger scale. The Inter-Regional Inspection of the Ural-Caspian Basin of the Ministry of Environment and Water Resources of Kazakhstan have conducted a survey in order to locate whether there was pollution caused by gas leaks in November 2013. Phenol, hydrogen sulfide and residual petroleum products were not found in water samples collected from near the pipeline connecting the Island D to the Bolashak refinery where the gas leak was found (Tengri news, 2013). However, it was reported that 2.8 million cubic meters of sour gas were flared. In this light, the Atyrau Regional Department of Ecology instructed the operator of the project, the North Caspian Operating Company BV (NCOC), and Agip KCO to pay fines in the amount of 134.2 billion tenge for the environmental damage caused by burning of sour gas during a test run of the project. The operators have contested the fines, but were unsuccessful. It was reported that later on, the Government of Kazakhstan and NCOC have reached an agreement, according to which, a number of disputes including environmental ones were solved. Critics argue that the environmental fine for the gas leak at the field was written of in exchange for investments into the EXPO-2017. So as a result of the agreement, the consortium agreed to continue financing social infrastructure projects in Atyrau and Mangistau regions and to provide financial support to the organization of Astana EXPO-2017 in the amount of $50 million (Капитал, 2015).
Before the start of the project in September 2016, NCOC held public hearings on Environmental Impact Assessment (EIA) of the offshore and onshore infrastructures of the Kashagan oilfield due to the delay of starting date of operations on June 10, 2016. The public hearing was held in order to assure compliance with the legislative requirements of the country.
Overall, environmental regulations at the Kashagan oilfield are required to be in compliance with international and local regulations. Previously, the environmental regulations in Kazakhstan were carried out by the Ministry of Environment and Water Resources which was renamed several times. On August 6, 2014, due to restructuring of the ministries of the Republic of Kazakhstan, the Ministry of Environment and Water Resources was liquidated and its functions are now managed by the newly created Ministry of Energy. The Ministry of Environment and Water Resources of Kazakhstan was responsible for environmental protection and use of natural resources. Currently, the environmental policy of the country is implemented by a specially authorized body, the Committee of Environmental Regulation, Control and State Inspection in the Petroleum Sector of the Ministry of Energy of Kazakhstan (ICLG, 2016). Environmental policy of Kazakhstan is mainly based on the Environmental Code of Kazakhstan (2007).
Environmental regulations in the oilfield mainly apply to greenhouse gas emissions and industrial waste management. Under the Environmental Policy, reports on greenhouse gas emissions are submitted to the environmental protection authorities. The amount of emissions should not exceed the equivalent of 20 thousand tons of carbon dioxide annually. If this amount is exceeded, industrial companies including the ones operating in the oil and gas field are required to obtain quotas for greenhouse gas emissions (ICLG, 2016). Moreover, some updates were introduced into the Environmental Policy of Kazakhstan. So, starting from January 2016, operators are required to collect and utilize waste generated as a result of operations on the field (ICLG, 2016).
A number of projects on emissions and waste management were implemented over the course of development of the Kashagan field. The major ones being “Determination of qualitative composition and hazard class of NCOC company’s production and consumption waste” (2011), “Air Pollutants Emission Sources Inventory at Kashagan Field Offshore Facilities” (2010) and “Maximum Permissible Emission Standards Project for Kashagan Field Offshore Facilities” (2011) (KAPE, n.d.). According to the management of the Kashagan project, high environmental standards are applied while operating the field. Moreover, production on the field bears a zero discharge characteristic, which means that none of the waste can be released back into the environment. So, the industrial waste is sent to Bautino to be cleaned and the associated gas is pumped back into the reservoir in order to maintain high reservoir pressure after being prepared onshore (Деловой Казахстан, n.d.).
To conclude, while being a longed strategical and economic project of Kazakhstan, Kashagan needs to be developed and operated under effective environmental regulations since the field is located in a harsh climate and a fragile environment.
References:
ICLG (2016). Environment & Climate Change Law 2016. International Comparative Legal Guidelines.
Retrieved from http://www.iclg.co.uk/practice-areas/environment-and-climate-change-law/…
KAPE (n.d.). Environmental Regulations. Kazakhstan Agency for Applied Ecology.
Retrieved from http://www.kape.kz/en/services/environmental-regulation/
Tengri news (2013). No pollution discovered at Kashagan. Tengri News.
Retrieved from https://en.tengrinews.kz/environment/No-pollution-discovered-at-Kashagan…
Деловой Казахстан (n.d.). Секреты шельфа. Кашаган – самый грандиозный нефтегазовый проект в истории Казахстана. Деловой Казахстан.
Retrieved from http://online.zakon.kz/Document/?doc_id=30186325#pos=4;-240
Капитал (2015). Штраф за выбросы на Кашагане ушел на инвестиции в EXPO. Kapital.kz.
Retrieved from https://kapital.kz/economic/37777/shtraf-za-vybrosy-na-kashagane-ushel-n…
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.