Sunrise LNG Chapter 6. Social and Natural Environment

A Report by La’o Hamutuk
Timor-Leste Institute for Reconstruction Monitoring and Analysis

Contents of this file

	Box 16. Timor-Leste and international environmental conventions
	Timor-Leste has moved beyond the Constitutional commitment to protect the environment and use resources sustainably, beginning to integrate these principles into policies. We have signed and ratified three international conventions on preserving the natural environment: the United Nations Convention to Combat Desertification (UNCCD; August 2003), the UN Framework Convention on Climate Change (UNFCCC; Oct. 2006) and the UN Convention on Biodiversity (UNCBD; Oct. 2006). These are known as the Rio conventions, and signatories are obligated to integrate principles of sustainable development and global environmental management into their national development priorities and programs. In late 2007, Timor-Leste signed the Kyoto Protocol to the UNFCCC, expressing its commitment to reduce global climate change (see Box 18). However, Timor-Leste does not yet have any “specific legislation that gives effect to the objectives and principles of the conventions, although there are already several pieces of legislation that deal with various issues that are closely related with the conventions.” Many laws now in force are from Indonesia or UNTAET, and are sometimes inconsistent. Although some laws have been updated or newly drafted, many of these are still not operational because they have not been enacted. This is partly because we lack relevant expertise: “Another capacity need at the individual level is that the ministers and other top decision makers often have insufficient knowledge of the sector they are running.” [78] The current government remains committed to “promote the environmental area as an essential, integral and indispensable driver in the strategy of medium/long term development.” [87] However, the previous government’s Ministry of Development and Environment has been dissolved, and environmental issues are now handled through the National Directorate for Environmental Services (DNSMA) in the State Secretariat for Environment under the Ministry of Economy and Development, which could reduce its priority and coordination with development projects.

	Box 17. Gorgon vs. the environment
	In June 2006, the Environmental Protection Agency of Western Australia recommended that the state government reject the Gorgon LNG project, proposed to process natural gas on Barrow Island, a protected natural reserve. In addition to other impacts, the alteration of the local population of flatback turtles was deemed so great [51] that the project deserved rejection from the highest environmental authority. In October 2007, the Commonwealth Government overrode the objections of environmental experts and the State government, and has allowed the project to proceed. with more strict environmental safeguards than originally planned.

	Box 18. Sunrise will add to global climate change
	At present, Timor-Leste’s impact on global climate change is very small. The fossil fuels used here release about 150,000 metric tons of carbon dioxide (CO2 ) into the atmosphere each year, but Greater Sunrise will change that. Processing 5.3 mtpa of gas would produce about four million tons of CO2 annually at the LNG plant (reference [60], page 10), mostly from generating electricity and removing waste from the feed gas. If this is vented into the atmosphere, it would multiply Timor-Leste’s contribution to the greenhouse effect by thirty times. An environmentally responsible facility like Snøhvit in Norway pumps waste CO2 back into the ground so that it doesn’t damage the climate. Gorgon (see Box 17) also does this, but the Darwin LNG plant releases it into the atmosphere. Sunrise operator Woodside Petroleum “is committed to minimising greenhouse gas emissions from the company’s production of energy products while remaining globally competitive” [123], but the company has not said what it will do with CO2 produced by a Sunrise LNG plant. Burning the gas from Sunrise will release an additional fifteen million tons of CO2 into the atmosphere every year. However, Timor-Leste has little influence over what the overseas buyer does with the combustion products of the gas after it has been sold. Timor-Leste signed the Kyoto Protocol in 2007, and this commitment should be carried through while considering designs for the Sunrise LNG plant, wherever it is built. Methane (CH₄), the principal component of LNG and natural gas, is 23 times more destructive of the atmosphere than CO2, so it is important to avoid leaking or spilling it from the wells, pipeline or LNG plant. (Calculation of current emissions by La’o Hamutuk based on RDTL imports of $35.1 million worth of fuels during 2005, of which 74% was diesel and 12% petrol. [86] This is consistent with the UNDP estimate of 0.2 million tons CO2 per year from Timor-Leste. [107])

“Impact” is understood here as an alteration that may be positive, neutral, or negative depending on whether the change that it produces is considered beneficial, of no importance or detrimental to the social and natural environment. An appropriate impact assessment requires baseline studies that describe the local conditions prior to construction of the infrastructure and an accurate knowledge of the extension and characteristics of the infrastructure planned. At this time, there are few if any baseline studies of the environment in Timor-Leste [7], and a precise characterization of the infrastructure is also unavailable. [82]

This discussion is based on previous environmental impact assessments of similar infrastructure in other parts of the world, on interviews carried out with government and civil society in Timor-Leste, and on the observations obtained during a four-day field trip (see report, Appendix 6). We can only discuss qualitative considerations related to the LNG plant in Timor-Leste. The environmental impact assessments used here as illustrations are the 2003 environmental impact assessment for the LNG export project in Pampa Melchorita, Peru [65], and the 2002 Public Environmental Report Draft for the expansion of the LNG processing facility in Darwin, Australia. [66]

After a brief introduction to environmental impact assessment, we will analyze the main conclusions of these two works. We will extrapolate from these reports to identify specific impacts that might be expected from the construction and operation of an LNG processing facility in Timor-Leste. In this discussion we will also highlight issues of special concern in the current regulatory context.

An LNG plant is a large industrial facility operating in a coastal environment as described in Chapter 3. Some degree of impact on the environment is inevitable from the construction and operation of the facility, . The objective of the environmental impact assessment is to identify the likely impacts and evaluate, quantitatively when possible, their extent and gravity. This assessment can then be used to mitigate these impacts in as far as is possible or, if they are found to be altogether undesirable, to alter or cancel the project. How the environmental impacts assessment can influence a project of this magnitude has been recently illustrated by the Gorgon LNG project in Australia, which will be larger than the Sunrise LNG plant (see Box 17).

Most Timorese people make their living in agriculture. They use land not only to live on, but also for farming, as the source for their livelihood, and as part of their traditional spirituality. The LNG plant will have a huge impact on community rights to land. Many people could be displaced and lose the sources of their livelihood, because their land is taken away to build the plant and associated infrastructure. Their farmland could be polluted, or their sources of water could be diverted or contaminated by project activities.

Many Timorese, who live in rural areas, believe that specific places and objects have supernatural value and powers. Timorese protect those places from misuse and destruction through traditional methods, such as Tara Bandu. Some of these areas should not be interfered with at all, while others can be used in a sustainable way with permission from appropriate local spiritual leaders. Such places can exist anywhere, in or near communities of people. A huge industrial project like an LNG plant could threaten sacred places, infrastructure and existing communities who are living on or near the desired project site. International companies and workers, as well as Dili-based government officials and advisors, need to safeguard against violating our traditional beliefs, which are fundamental to Timorese culture.

Timor-Leste has yet to enact laws or implement regulations for working conditions, health and safety. UNTAET Regulation 2002/05, the Labor Code for Timor-Leste, is the only non-Indonesian labor law at this time, and it does not regulate health and safety. This Labor Code creates a National Labor Board with the mandate to provide independent advice on occupational safety and health matters as well as programs on vocational training and skills development, grant exemptions, set minimum wages and other related functions. However, the Board has not been established. The Occupational Health and Safety Law was drafted in 2004, but has not yet been enacted. The Government hasn’t released the draft, so we are unable to determine how adequate it will be when and if it becomes law. Furthermore, labor regulation has been moved from the former Ministry of Labor and Solidarity to the State Secretariat for Vocational Training and Employment. We are concerned that the Secretariat does not have sufficient power to ensure that working conditions at an LNG plant site are safe, that workers are fairly trained and compensated, and that their rights will be respected.

6.1 Environmental footprint of an LNG plant

Activities related to processing gas and loading it onto LNG tankers affect the land, air and sea environments. Typically, an LNG processing plant will have a significant impact on the social and natural environment during its several years of construction, which involves a large workforce and heavy machinery. Once the facility is operational, impacts might be less severe but will be continuous. Some impacts will therefore happen just once and others repeatedly or over a period of decades. Some might have a lasting impact on the environment and some might be temporary. It is hard to evaluate the severity of these impacts since many of them are uncertain or hard to measure. This results in many impacts measured on very subjective scales that depend heavily on who is carrying out the analysis. Therefore, it is desirable to compare assessments carried out by different groups. Ultimately, qualitative and approximate quantitative analysis tools make it possible to rank the impacts according to a scale of severity.

For instance, after consideration of the local conditions, the environmental impact assessment for the Pampa Melchorita facility [65], a 4.4 mtpa LNG export plant in Peru, concluded that none of the expected impacts would have a highly negative effect on the social and natural environment. (La’o Hamutuk does not claim that the Pampa Melchorita study, undertaken by proponents of a project which was strongly opposed by some local communities, is unbiased. Rather, we offer it to illustrate some of the issues that should be examined in an Environmental Impact Assessment.) As positive impacts it listed increased tax revenues, increase in demand of goods and services, and increase in employment (see Box 19). These positive impacts are also the main drivers for construction of a similar facility in Timor-Leste, as was discussed in Chapter 4 and Chapter 5, although the non-fiscal benefits are likely to be significantly smaller for Timor-Leste than for Peru, even with a concerted effort to maximize them.

Box 19. EIA for Pampa Melchorita LNG facility, Peru
The Environmental Impact Assessment for the Pampa Melchorita LNG export facility, carried out by Golder Associates Peru S.A. [65], details six phases in construction and six phases in operation and dismantling. In these 12 phases, 22 potential impacts were identified and ranked as positive, neutral, slightly negative, moderately negative, or highly negative. Below is a simplified presentation of these results. The six phases of construction have been condensed into a single construction phase and the six phases of operation and dismantling have been similarly condensed into a single phase of operation. Three of the 22 impacts were considered positive during both construction and operation phases, none were ranked as highly negative, and the remainder was tagged either moderately (M) or slightly (S) negative. The impacts are tagged with a “P” referring to the case of Pampa Melchorita for later reference.
POSITIVE IMPACTS	CONSTRUCTION	OPERATION
P-1 Increase in tax revenues	YES	YES
P-2 Increase in demands of goods and services	YES	YES
P-3 Increase in employment	YES	YES
NEGATIVE IMPACTS	CONSTRUCTION	OPERATION
P-4 Alteration of air quality	M	S
P-5 Increase in noise levels	M	S
P-6 Increase in turbidity of sea water	M	S
P-7 Change in sea and river water quality and quantity	S	S
P-8 Alteration of soil structure	S	S
P-9 Alteration of soil quality	S	S
P-10 Alteration of geomorphology	M	S
P-11 Alteration of beach morphology	S	M
P-12 Loss of terrestrial vegetal cover	M	S
P-13 Alteration of composition of sea communities	M	S
P-14 Changes in fish catch	M	S
P-15 Reduction in marine fauna	S	S
P-16 Change of the demographic composition	M	S
P-17 Alteration of local traditions	S	-
P-18 General nuisances for population	M	S
P-19 Traffic interruption	M	-
P-20 Restrictions for traditional fishing access	M	M
P-21 Reduced revenues in traditional fisheries	S	M
P-22 Destruction of archaeological patrimony	S	-

For comparison, we also looked at the 2002 Public Environmental Report Draft [66] for the Darwin LNG facility in Australia. It details environmental and social “benefits” and “costs” related to a proposed 10 mtpa plant (capable of processing gas from Bayu Undan, Greater Sunrise or other nearby gas fields in the Timor Sea).

Box 20. EIA for Darwin liquefied natural gas plant, Australia

The Public Environmental Report (PER), prepared in 2002 by URS Australia Pty Ltd, for a Wickham Point Darwin 10 mtpa LNG Facility was based on earlier (1996) plans and their environmental assessment documents related to a 3 mtpa LNG facility. These earlier plans and documents were approved in 1998, but construction was deferred “due to global economic issues.” [66] These documents already discussed environmental impact related to a later possible expansion to 9 mtpa, which was noted by the licensing authorities but not yet approved at that time. The later plans for 10 MTPA, which showed relative reduction in negative impact compared to the earlier proposed 9 mtpa, were approved and an Exceptional Development Permit was granted in 2002. This permit itself was later amended in several steps to reflect the reduction in size to a 3.2 mtpa facility, which began construction in 2003 and operation in 2006.

POSITIVE IMPACTS

D-1 New sources of energy; production of LNG for industrial and domestic use

D-2 Financial contributions to Australia and East Timor governments from Timor Sea gas reserves

D-3 Contributions from export earnings, income sharing, taxes, salaries and purchases

D-4 LNG Promotion reduces greenhouse gas emissions in accordance with Kyoto Protocol
(Greenhouse gas emissions are less than if oil or coal were used to provide the energy which will be generated from LNG; the project itself adds to greenhouse gas emissions.)

D-5 Significant training and employment opportunities

D-6 Supply of infrastructure for future Timor Sea developments, economic diversification

D-7 Commitment to sustainable development in consultation with community

D-8 Expansion of reservation rainforest through purchase for conservation

D-9 No ecological threats and minimal and manageable environmental risks.
(La’o Hamutuk does not believe that the absence of threats or risks is a positive impact. The EIA should describe the effects of building the project. If it were not built, this would also not have threats or risks.)

NEGATIVE IMPACTS

D-10 Alteration of a wilderness island into an industrial plant site

D-11 Loss of dry rainforest and associated fauna that is of conservation value

D-12 Modification of inter-tidal pavement and sand flat near jetty and dock structures

D-13 Loss and disturbance of archaeological sites

D-14 Increased traffic, service and accommodation demand during construction

D-15 Restricted public access to industrial facility and dock structures

D-16 Possibly modified flight paths

D-17 High volume discharge of CO₂ into the atmosphere

D-18 Low volume discharge of atmospheric emissions of Nitrogen oxides (NO_X), sulfur dioxide (SO₂), and particulate matter of size 10 (PM10)

D-19 Low volume discharges of hazardous and non-hazardous wastes to onshore sites

These likely impacts foreseen for the LNG facilities of Pampa Melchorita and Darwin can be grouped into broader categories:

These categories help us to conceptualize the main concerns for Timor-Leste if such a facility is to be built here. Extrapolating on the basis of Timor-Leste’s specific situation and research and interviews carried out in Timor-Leste, La’o Hamutuk has identified several concerns to be addressed prior to the construction of this facility and which should be monitored in detail. This list include both expected “negative” impacts and potential “positive” impacts. The construction of this facility offers some opportunities from which the Timorese people can benefit, if the construction and operation process are carried out in a manner that aims to build on its natural and social environment. We list them here and discuss them in the following paragraphs.

Table 10. Categories of environmental and social impacts
IMPACT CATEGORY	CHARACTER	CONCERNS IN TIMOR-LESTE
1. Social, cultural, and economic	positive	Increased government revenues Employment opportunities Provide stimulus for local businesses Energy source
	negative	Shrinkage of traditional economies, including loss of land and fishing and agricultural areas. Loss of archaeological patrimony Demographic pressure, including displacement, disruption of communities, impact of foreign workers.
2. Pollution and wastes	positive	Low CO₂ emission energy source (in comparison with coal or oil which the LNG would replace)
	negative	Increased greenhouse emissions, from burning gas, possible leakage of methane, and CO₂ extracted with the gas. Wastes and discharges
3. Loss of environmental stocks	positive	Establishment of protected land (the Darwin plant traded its land use for a separate protected area. Timor-Leste does not yet have such a scheme, but it could be beneficial.)
	negative	Loss of vegetable cover Loss of fauna and habitats Increased demand for process water, which may impact on water table used by local communities

Social, cultural, and economic impacts

The construction and operation of the LNG plant has the potential to bring significant revenues and opportunities into the country. Revenues can originate through taxation of many of the activities, not only the processing of the gas, but also purchases and services rendered. Given the current level of development in Timor-Leste it is unlikely, however, that Timor-Leste suppliers or workers will receive significant money from direct purchases of goods or services, as these goods and services are likely to be imported. These transactions can nevertheless be taxed by Timor-Leste, thus producing revenues. A more in-depth analysis of the revenues that the Timorese government can expect from the country’s LNG aspirations can be found in Chapter 4, and a more detailed analysis of primary and secondary employment benefits is in Chapter 5.

The construction of the LNG plant will include building an electric power plant to supply energy for the plant processes. Constructing a larger or additional power plant could supply energy to the nation or to nearby communities. This would be a positive impact for the region neighboring the LNG facility, providing electricity with low environmental impact. Electricity production with natural gas could offset environmental concerns that have been raised regarding other major power enterprises such as the Iralalaro project. [115] To the knowledge of this team, however, this possibility remains unaddressed and thus the availability of energy for Timor-Leste resulting from the LNG endeavor cannot be counted on.

The implementation of the LNG processing plant in Timor-Leste will have some negative impacts on traditional economies such as fisheries and agriculture. These impacts might be small in comparison to the project’s benefits for the nation, but will have major effects on the lives of those directly involved. They should be analyzed, and the people whose livelihoods are affected need to be compensated or given alternative employment opportunities. Especially during construction time, the site of the plant will experience significant demographic pressure due to the large number of workers. These changes in the local demographics need to be assessed and the potentially negative impacts such as prostitution and violence, curbed. Finally, construction of the facility might produce losses in the archaeological patrimony that is scarcely known at this point in Timor-Leste. Base studies as to the archaeological wealth and lulik of the site that is ultimately selected need to be undergone prior to the beginning of the construction phase. This patrimony is designated protected in Timor-Leste by UNTAET Regulation 2000/19 on (Protected Places) [110], but the regulation is vague as to which areas are protected or what activities are prohibited in these areas. (Lulik is a traditional, animist belief that certain places and objects are spiritually meaningful, often embodying ancestors. Any use of such places requires permission from the appropriate leaders, and some should not be disturbed at all.)

Throughout the twentieth century, massive numbers of people in many countries were displaced to make way for large industrial or infrastructure projects, often with disastrous effects on their lives. In recent years, society has recognized that these people’s rights must be respected, and a consensus is emerging around a standard that people forced to move should be better off after relocation than before. This is a complex area, and conventional methods which assign little value to “unimproved” land which is used sustainably or traditionally, while providing much more compensation to richer people who built expensive houses, should not be unthinkingly applied in Timor-Leste.

Pollution and wastes

Due to a variety of factors, Timor-Leste’s environmental laws are still not in place, and currently Indonesian laws from 1999 apply. Current schedules hope to enact the Base Law for Environment (which encompasses the Pollution and Hazardous Waste Law [76] and the Law on Environmental Impact Assessment [77]) by the end of 2008. Under this law draft, the potential polluter, a person or an industry, requires a license to emit discharges to the atmosphere, land or waters of Timor-Leste that are noxious or poisonous, harmful to humans, animals or vegetation, or that are offensive to the human senses. It is ultimately the Directorate for Environmental Services (DNSMA) within the State Secretariat for Environment that is responsible to grant and regulate such licenses. Discharges described here should be carefully regulated. In order to receive the license, the project proposal needs to be accompanied by an Environmental Management Plan that describes the extent of the polluting activities and how their effects will be minimized, in all stages of the polluter’s life-cycle (construction, operation, as well as decommissioning).

In this regard, the wastes expected during the construction and operation phases need to be considered. The Public Environmental Report Draft for the Darwin facility expansion [66] lists types of waste expected to result from construction and suggests ways to decrease damage to the environment. Table 11 below lists these types, together with information about Timor-Leste’s capacity to deal with similar issues.

Cleared vegetation: “Mangroves and other trees or plants that are removed during the construction phase should not be burnt but stockpiled and used for environmental rehabilitation. This material can be re-spread in previously cleared areas or it can be chipped and used as mulch for landscaping of the facility’s grounds.” [66]

Spent oils and lubricants, and domestic garbage: The Darwin analysis [66] suggests that a commercial waste management contractor assume responsibility to dispose of hazardous materials in accordance with appropriate legislation. The DNSMA should dictate the appropriate method of disposal for spent oils, garbage and sanitary water. Currently, regulation of these wastes would be limited to the Draft on Pollution Control. [76] Due to the incipient development of environmental legislation in Timor-Leste and to the absence of locally operating waste management contractors with the required expertise, special attention should be directed to this topic, either by building the required capacity to handle the disposal of these materials locally or to monitor an external contractor. Garbage handling is a serious unresolved problem in Timor-Leste, which must be dealt with even without the additional burdens of the LNG facility. Therefore, significant capacity will have to be developed on site to handle the disposal of garbage.

Domestic/Sanitary Wastewater: Typically, run-off from clean areas in an LNG facility is directly discharged into the harbor waters. The rest, as discussed in the Darwin Environmental Report [66], should be treated and used for irrigation and landscaping. This report makes an exception for the water used for hydro-testing during construction, which will be released into the harbor containing chemicals needed for the testing process. The capacity for treating sanitary water is not extended in Timor-Leste and it will not be possible, in the short term, to subcontract this disposal to local industry. Regarding the water used for hydro-testing, studies should be conducted to ensure that chemicals are not released into the harbor if they could threaten the marine environment, or ensuring that mitigation measures are well in place, according to the Pollution Control Law.

Construction Materials: Disposal at approved location and/or collected in a suitable disposal area for recycling purposes. In the absence of appropriate landfills for disposal of construction materials, an appropriate site would have to be identified. The creation of a new landfill will require its own environmental impact statement, if it is not included in the LNG project. This will then fall within the dictates of the Environmental Impact Assessment Legislation [77] which was re-drafted in 2006. Care must also be taken about pollutants which may leach out of the landfill over time, making sure that they do not enter into the environment.

Hazardous Materials: primary contractor and subcontractors are responsible for on-site handling, required paperwork, and subsequent off-site disposal to facilities in accordance with appropriate legislation. There is currently no local capacity in Timor-Leste to identify, contain, and dispose hazardous materials that will be used during the construction phase. These activities might be subcontracted to internationally operating companies under license from the State Secretariat for Environment, if the Pollution Control Law draft is enacted.

Other Materials: As byproducts of the LNG, the plant will have to dispose of other wastes, particularly carbon dioxide (CO₂) and hydrogen sulfide (H₂S). Although the Darwin plant dumps their CO₂ into the atmosphere, more responsible operators (such as Snøhvit in Norway) keep it out of the environment by pumping it back underground. Timor-Leste should also do this, as responsible global citizens (see Box 18). Other pollutants, such as emissions from the power plant, should also be handled using the best available practices.

The amounts of these wastes generated by an LNG processing facility in the post-construction, operational phase will depend upon the technology used and upon the number of trains. These are the estimates for the Darwin 10 mtpa project [66]:

Table 11: Waste expected from Darwin LNG construction and operation
Solid Waste	Tons/Year	Treatment and disposal
Waste lubricating oils	16	Removed from the site by waste management contractors and disposed. A standardized practice is transportation to a lime kiln. Two companies have extensive experience in disposal of petroleum industry wastes.
Spent oils	1.5	Removed from the site by waste management contractors and disposed. A standardized practice is transportation to a lime kiln.
Cellulose	2	Removed from the site by waste management contractors and disposed in landfill, after appropriate testing and provision of test results to appropriate regulatory bodies.
Biological sludge	5	Removed from the site by waste management contractors and disposed of at local sewage treatment plants in accordance with regulatory requirements.
Inorganic sludge	0.4	Removed from the site by waste management contractors, de-watered when appropriate, tested as required and disposed in landfill.
Oily sludge	60	Removed from the site by waste management contractors and disposed. A standardized practice is transportation to a lime kiln. Darwin based waste management companies have facilities to dewater oily sludge.
Spent solvents	0.2	Removed from the site by waste management contractors and disposed. A standardized practice is transportation to a lime kiln.
Ceramic balls	5.5	Removed from the site by waste management contractors and disposed in landfill, after appropriate testing and provision of test results to appropriate regulatory bodies.
Molecular sieve waste	72	Removed from the site by waste management contractors and disposed in landfill, after appropriate testing and provision of test results to appropriate regulatory bodies.
Trash	80	Removed from the site by waste management contractors and disposed in landfill
Liquid Waste
Treated Water Effluent	96,725	Treated and mostly used for irrigation and landscaping of premises
Atmospheric Emissions
Particulates	537	Monitored, reported on, and released into atmosphere according to permit
SO₂	130
NO_X	6,152
CO	1,942
CO₂	4,559,940
TOC/CH₄	464	Burnt in incinerator and transformed into CO₂

Loss of environmental stocks

Clearing the area for construction of the facility will involve loss of vegetable cover and, subsequently, might endanger the habitat of animal species. UNTAET Regulation 2000/19 on Protected Places [110] protects animal and vegetable species. Once several sites have been chosen as appropriate for the conception of the plant, a base line study needs to be done to determine the local species and the impact that the construction of the proposed facility might entail. According to the Haburas Foundation, a local environmental NGO, the existing information regarding the distribution of fauna and flora in the island of Timor is lacking in detail. [7] There is also disagreement as to the exact boundaries of the protected areas, which include areas already used by people.

Indonesian and UNTAET legislation applies when not overridden by other Timorese legislation. In regard to the marine environment, Section 3 of UNTAET Regulation 2000/19 specifically includes as endangered species crocodiles, sea tortoises, sea turtles, and marine mammals such as bottlenose dolphins, whales and dugongs, in addition to those listed in the Convention on International Trade in Endangered Species. Those species and their habitats shall be protected in Timor-Leste and their destruction prohibited. Sections 4 and 5 of this regulation also prohibit the destruction, removal, damaging, or pollution of coral reefs, wetlands and mangroves. Marine habitats are susceptible to disruption from the sea operations related to the LNG export, especially the frequent navigation of large tankers in addition to construction and the operations of dredging and of maintenance of the waterways.

The pristine environment of Timor-Leste is likely to suffer comparable losses to Darwin. However, since the land and marine environment of the island have not been surveyed in depth, the potential impact on sea species cannot be projected at this point. It is important to note, nevertheless, that judging from the Australian experience, a potential important loss to the marine fauna could justify alterations in the project and ultimately rejection of the enterprise, if it is deemed too disadvantageous by the Timorese people.

In July 2007, the RDTL Council of Ministers approved Government Resolution 8/2007 to create the joint terrestrial-marine Nino Konis Santana National Park at the eastern tip of Timor-Leste to protect terrestrial and marine natural and cultural values (see map, Figure 14). This incorporates three ‘Protected Wild Areas’ listed in existing Regulation 19/2000 [110] which named fifteen such areas, including several on the south coast. This list is a step toward developing comprehensive Protected Area policies (scheduled to begin in early 2008) which will refine and add to the previous list and provide comprehensive guidance regarding management, prohibitions, regulation and enforcement. It seems obvious that major industrial facilities like an LNG plant should not be allowed in protected areas, and we hope that the legislation to be adopted next year will be clear, workable and enforced to ensure that such a facility does not destroying irreplaceable environmental, cultural, socio-economic or historical heritage.

The not-yet-enacted Law on Environmental Impact Assessment will regulate the environmental impact assessment process for infrastructure projects. [77] The current draft would define the LNG project as category “A”, requiring an Environmental Impact Statement and an Environmental Management Plan, which are jointly referred to as an Environmental Impact Assessment. Infrastructure projects in close proximity to an Environmentally Sensitive Area (as defined in the draft), involve hazardous or dangerous chemicals, are related to petroleum, petrochemicals or hydrocarbons, or are major government infrastructure projects will be ranked as category “A”. This draft would rate the LNG plant as category “A,” requiring a full fledged EIA.

The aim of this discussion has been to illustrate that the LNG project will involve significant positive and negative impacts to the social and natural environment. Pampa Melchorita and Darwin provide examples of some impacts which may apply in Timor-Leste, although these will depend on the natural and social circumstances of the country as well as on the characteristics and location of the final plant design.

The economic and development benefits come together with consequences that can be detrimental to the marine, land, and atmospheric environments, as well as affecting the economic, cultural and traditional heritage of local communities. Whether the positive outcomes offset these costs to Timor-Leste can be predicted more accurately only after the project is defined – and the actual effects will not be completely known until they have already happened.

Whether this situation represents an impediment for development or an opportunity for growth and capacity building depends upon a plethora of circumstances and choices. In Chapter 9, we discuss choices that must be made soon to ensure that the LNG enterprise is good for the people of Timor-Leste.

Potential hazards

LNG processing is commonly believed to be less dangerous than other hydrocarbon processing technologies. [30] However, accidents have occurred in the past and continue to occur, both during construction and during operation. These accidents have usually not affected people or property outside the facility’s boundaries (see Appendix 5 for a discussion of LNG technological risk).

Although the risks associated with handling LNG may be less well-known, the plant will also involve a number of other dangerous petroleum components and other substances during construction, operation and transport, including natural gas (before liquefaction), LPG, condensate, tanker and generator fuels, other industrial chemicals, plant by-products, waste from all processes, and waste stored in landfills. The risks of accidents, fires and pollution from these materials are better known and must also be considered. For example, LPG and condensate are much more dangerous than LNG with regard to fires and explosions. Any gas that is liquefied by pressure can, upon rupture of the containing vessel, experience a boiling liquid expanding vapor explosion. [117]

One of the well known problems of LNG storage tanks is the possibility of the liquid withdrawal lines in the bottom of the tank freezing and leaking (this occurred in the Das Island incident in the United Arab Emirates in 1978). For that reason, modern tanks are designed with withdrawal lines suspended from the roof. Zip-failure is another well known problem that involves the structural failure of the tank due to freezing-induced brittleness of the inner tank steel. Although the industry considers all modern tanks to be safe, underground double-containment tanks are the safest design. See Figure 10 for examples of tank designs.

Cryogenic contact injuries can occur if people are exposed to LNG due to its low temperature. However, most of the risk related to LNG processing is due to the rapid conversion of the liquefied natural gas into its gaseous form if not properly maintained at temperatures lower than -160°C. This situation can arise in cases of leaks and spills from pipes and valves within the facility, from storage tanks, or from LNG tankers. These spills can occur on land or on sea. LNG tanker ships have had a good safety record, but a tanker accident could have very serious consequences, especially if a large amount of LNG is released onto the sea surface. This can cause a “flameless explosion” from rapid evaporation of LNG on the ocean, forming pieces of ice and gas clouds followed by combustion and explosions. Such explosions could destroy everything alive within 10 km. But even if vaporization takes place at a less than explosive rate, the vapor could still ignite and produce a fire. In Timor-Leste’s monsoonal climate, there can be months with no rain, which increases the likelihood that the fire can spread to dry vegetation. [61]

In order to assess the risks posed by LNG spills, an analysis needs to be carried out that addresses the evaporation speeds of the LNG depending on whether the spill occurs on land or sea, the wind influence on the vapor dispersion, and the existence of ignition sources. This helps predict exposure to potential fires and design measures to prevent them. The principal issues of LNG fire protection are extinguishing the fire, controlling and reducing the rate of burning, reducing the rate of thermal radiation from the fire, suppressing unignited LNG vapor cloud formation, and protecting surrounding structures and equipment.

LNG processing operations have a good safety record to date and handling natural gas poses, in general, milder hazards than handling most other petroleum products. Nevertheless, it is significantly more dangerous than industries Timor-Leste has experience with, such as coffee production, water distribution and diesel electric generation. Contingency plans need to be set in place for the eventuality of severe accidents. The operator must develop emergency response plans to control accidents at the source and to minimize their consequences at their onset. The people of Timor-Leste should, nevertheless, consider the possibility that the processing facility personnel might be unable to contain the impact of a severe accident to the plant’s boundaries, in which case, a community emergency response plan needs to be in place. Currently, the capacity of Timor-Leste to control an industrial accident is severely deficient or nonexistent, partly because the country has no prior experience with large industrial operations. RDTL Petroleum officials [82] suggested that Australia’s emergency response capability might be invoked in the event of a major industrial accident. This choice, unconfirmed at this point, entails significant dependency upon Timor-Leste’s neighbor and involves additional uncertainty in the promptness of the response since distance, politics and international relations will be involved.

In parallel, and not directly related to the LNG enterprise, Timor-Leste is developing a disaster management plan to be able to respond to earthquakes, floods and other potential natural catastrophes. This plan should also be useful for responding to industrial accidents or fires. The current draft of the National Disaster Risk Management Plan [84] is a comprehensive document that discusses the needs for a risk management plan, briefly assesses the hazards that affect Timor-Leste, and details a workable mechanism to manage multiple risks that includes disaster preparedness, emergency response, and, to a more limited extent, rehabilitation and recovery. Parts of this plan are well designed and correspond to the highest standards of the United Nations International Strategy for Disaster Reduction (UNISDR) and other relevant agencies, but more work on them is needed to better integrate research institutions and coordination efforts between the National Disaster Management Office (NDMO) and other departments, including Environmental Services.

Box 22. Hydrochloric acid spill in Dili Port

On 16 April 2007, a ship heading from Indonesia to Australia discovered an acid leak onboard and consequently requested emergency docking clearance in Dili, where a leaking container was off-loaded. In the port offloading area, a gaseous substance was spraying out of the container, creating irritating fumes and puddles of liquid that flowed into the sea. The shipping bill specified that the substance was 22,000 liters of 33% hydrochloric acid, but this could not be confirmed because suitable sampling equipment was unavailable. By this time, many organizations and departments were involved, including the National Disaster Management Office; Ministry of Public Works, Transport and Communications; Ministry of Labor and Community Reinsertion; Ministry of Health; Ministry of Development and Environment; UNMIT, UNDP, UN Office for Coordination of Humanitarian Affairs (OCHA), WHO, and IOM. The Australian Defense Force component of ISF was able to contain and seal some leaks, but the container was in such bad shape that new leaks continued to appear. The leaks also formed an acid vapor cloud, and created a risk of a much bigger spill which would have severely impacted the local community.

OCHA, with help from the UNEP Regional Office and the German Federal Agency for Technical Relief (THW), established communications with chemical experts in the German BASF Chemical Company who recommended several mitigation/management measures and personal protection guidance, including the evacuation of the surrounding area. An evacuation site and transport were prepared for the population within 250 meters. While some people in the area evacuated, the IDPs in the Jardim camp defied the evacuation request, believing that it was a ploy to get them out permanently. Information also spread that fish caught in Dili harbor could be contaminated, causing many Dili residents to refuse to eat fish for several days, although this advice was quickly reversed.

The Timor-Leste government requested assistance from Australia, and members of the Queensland Fire and Rescue Service arrived in Dili on 17 April with proper equipment for testing around the exclusion zone and assessing danger levels. Recommended approaches were to neutralize the acid with the only available neutralizing agent available in Timor: cement dust and seawater.

The incident demonstrated that Timorese capacity to manage a disaster was very limited, without adequate technical expertise, although commendable coordination was conducted by the many agencies involved.

The document was developed by the NDMO while it was part of the Civil Protection Directorate in the Ministry of Interior. In the new Government structure, the NDMO has been moved to the Ministry of Social Solidarity and its State Secretariat for Social Assistance and Natural Disasters. We are concerned that this could indicate reduced attention to human-caused disasters (since they are not “natural,” a concern that was confirmed by the NDMO director). Furthermore, the hydrochloric acid spill in Dili harbor in April 2007 (see Box 22) dramatizes the gap between well-written plans and their implementation during actual accidents. Significant additional time, work, and personnel are required to implement these plans so that Timor-Leste will be prepared to handle future disasters.

Annex 3 of the draft [84] lists the issues and capacities necessary for the risk management plan to meet the desired standards expressed in the same document. Out of 30 elements that concern risk management and need attention, 19 are nonexistent and have not been addressed at all, ten are labeled as “limited” or “weak,” and only one is listed as “Available.” This element is the linkages to avoid duplication with existing NGOs that participate in risk reduction activities, so this activity has little to do with capacity in Timor-Leste. These comments should not be interpreted as criticism but rather as a warning that the country is not prepared at this point to respond to serious or even mild emergencies. Therefore, if the LNG infrastructure is to be built on Timorese territory an enormous effort should be carried out in parallel to stock up the local community with educational material and technical capacity to respond to eventualities that include violent fire and chemical and industrial spills. These efforts should include providing the local communities with capacity to regularly monitor the safety precautions at the plant site.

During our field visit to Lautem and Viqueque in May 2006, the authors observed the limited capability of the local community and administration to carry out a reasonable management of their infrastructure and to respond to relatively small scale incidents, like the partial collapse of the road of Viqueque to Beaçu, caused by river erosion of the toe of the embankment (see Appendix 6).

Risk analysis

This section of the report is a brief summary of the main concepts in LNG risk assessment. The risk analysis process depends heavily on site-specific information on environmental conditions, such as wind and sea currents, the existence of populations and forests in potentially vulnerable areas, and on the choice of the technology. Since, at this point, the site has not been selected and the environmental data available in Timor-Leste are scarce, this part of the report points to potential critical studies that should be carried out in the near term, in parallel or before other activities in the planning process.

As part of the risk assessment process, it is customary to develop an “event tree” that describes the possible paths that can lead to a potentially threatening event. By analyzing each of the elements in the event tree, it is possible to calculate or to obtain estimates for the probabilities of occurrence and consequences of each step, to ultimately obtain the risk quantification. See Appendix 5.

As interest in the transportation and processing of LNG has grown in recent years, so has the concern about potential hazards presented by these activities. A variety of agencies in the United States have commissioned studies to address the quantification and mitigation of the risks posed by LNG processing. The Sandia National Laboratories LNG Spill on Water Risk Assessment [31] is one such study.

Risk analysis process for an LNG spill on water

Earlier we discussed that the potential threats of LNG processing mainly originate from spills of LNG at sea and on land. Evaporation of spills on land happens at a much slower rate than spills on water because soil is a much poorer thermal conductor. Therefore, LNG spills on water will evaporate faster and steadily, potentially creating larger vapor clouds at a faster rate, which in turn, constitute a hazard if ignited. In the United States, LNG spills on land are regulated through articles DOT 49 CFR 193 and NFPA 59A but so far there are no regulations with respect to spills on water.

According to the Sandia study, six main damaging events can result from an LNG spill: injuries from asphyxiation, cryogenic burns and structural damage, combustion and thermal damage, LNG fireballs, LNG and air explosions, and Rapid Phase Transitions (RPT). Pool sizes can range from 150 m in diameter for small, accidental spills to several hundred meters for large, intentional spills. [31] High thermal hazards from fire are expected to occur within approximately 250-500 m from the origin of the spill. Major injuries and significant structural damage are possible in this zone. The extent of damage will depend on the spill size, and the dispersion from wind, waves and currents. People, major commercial and industrial areas or other critical infrastructure elements (such as chemical plants, refineries, bridges and tunnels), or national icons located within portions of this zone could be seriously affected. With increasing distance, hazards and thermal impacts become less dangerous, but for a large spill minor injuries and damage are still possible at 1,600 m. If the vapor cloud disperses considerably before being ignited, distances up to 2,500 m are possible, and hazards are much greater.

Risk management

Given the technical descriptions of the hazards obtained through the modeling of the spill event, three zones of security are proposed in the Sandia report [31] with varying risk mitigation requirements:

Zone 1: Areas where the LNG shipments transit narrow harbors or channels or come within 250 m of people and major infrastructure. For Timor-Leste. this should include the existence of rich environmental ecosystems, such as the Lore Reserve which is a coastal forest. Thermal radiation poses a severe hazard within this zone and can cause significant damage to people, infrastructure and the natural environment, including coral reefs and fishing grounds. Risk management needs to address vapor dispersion and fire hazards.

Zone 2: Areas in which LNG shipments occur in broader channels or large outer harbors, or within 250-750 m of major critical infrastructure or settlements. Hazards are less severe within this zone and risk mitigation should, like in zone 1, be focused on vapor dispersion and fire hazards.

Zone 3: Areas where LNG shipments and deliveries occur beyond 750 m from major infrastructure and settlements, or in large bays or open water. Thermal radiation in these areas poses minimal risk to public safety and property. Risk mitigation should concentrate on vapor cloud dispersion.

Appendix 5 lists several prevention and mitigation techniques that might be deemed necessary or that might be recommended depending on the threat level. Some are easier to implement than others and Timor-Leste should develop a specific study to select some of these procedures, or variations thereof, to reduce risk with the available resources.

Relevance to Timor-Leste

General knowledge about the hazards that this infrastructure and the LNG traffic entails should guide the site selection process or, at least, play a role in addition to the engineering technical requirements (see Chapter 3). After the site is chosen, a thorough risk analysis should be conducted. For the case of Timor-Leste, the following points should be carefully considered:

Risk assessment guidelines: The Timor-Leste facility should include a risk assessment and mitigation study in line with other facilities around the world. Regardless of the company or consultants that carry out this work, the most up-to-date version of the risk assessment guidelines by the Sandia National Laboratories [31] should be taken into account, in addition to other methodologies that might be used to corroborate or to expand the results.

Hazards for the environment and settlements: The site selected for Timor’s LNG processing facilities will be on the south coast, and nearby natural ecosystems will be within zones 1 or 2, as defined above. If this is the case, special attention needs to be paid to the hazard of vapor clouds and ulterior ignition. This hazard poses high risk of fires with the consequent damage to the environment and nearby settlements, especially during the dry season. Of most concern, however, is the limited capacity of Timor-Leste to control a fire of the proportions that an LNG incident could trigger.

Education and information of stakeholders: All stakeholders, especially nearby residents, need to be consulted, informed, and considered in the decision making process involving risk, mitigation and disaster prevention. In order for this dialog to occur under fair circumstances, the local population needs to be thoroughly educated as to the dangers that the LNG processing facility poses. These hazards need to be assessed and properly communicated, without alarming the population, but with a thorough treatment of the causes, the risks, and the prevention and mitigation measures. If the consequences of a potential fire or of thermal radiation extend beyond the limits of the LNG processing facility, the people of Timor-Leste need to have the training, preparedness, and resources to act appropriately to control the impact and to protect their lives and property. Considering the current state of development of coastal rural communities in Timor-Leste (see Appendix 6. Field visit report), this task requires enormous efforts by the government and plant operator.

Preparation and prior studies: In order to assess site-specific conditions that play a significant role in risk assessment, Timor-Leste must begin to gather data as soon as the site for the LNG facility is chosen. These studies will be necessary to conduct the risk assessment but also for the environmental impact assessment. Indeed, these two studies are interdependent. Ultimately, a description of sea currents, waves, wind, natural ecosystems, water availability, etc. will enormously contribute to the design process of the LNG facility. Some of these studies are important on their own, for instance the environmental stock assessment. Data on wind speed and direction is important to assess the consequences of potential LNG spills. This work should start as early as possible, and it will be very helpful to Timor-Leste’s development, regardless of its LNG ambitions.

Legal considerations: In the United States and elsewhere, many of the mitigation strategies, in order to be successful, rely on the support by legislation and from international treaties. Timor-Leste needs to develop similar legislation and make sure that it is properly enforced. This will guarantee that LNG traffic and handling is carried out appropriately. Unless Timor-Leste advanced its legislation and enforcement, the risk is high that LNG shipment and activities will be conducted with lesser standards, which might lead to threatening circumstances for people and property.