Tuesday, September 16, 2014 | By Great Energy Challenge | No Comments
In the Orinoquia region of Colombia, two oil fields run by Toronto-based Pacific Rubiales Energy last week became the first to be certified as “socially and environmentally responsible,” according to a new standard. The two sites produce approximately 250,000 barrels per day, or 25 percent of Colombia’s total output.
That oil is being produced amid a complex web of natural resources, ecosystems, and indigenous communities in this region of the Amazon. That’s why the company Equitable Origin set out to create a standard that would define and reward best practices in oil and gas production, much in the way that the LEED standard has pushed efficiency and conservation measures in public buildings.
According to the “EO100 Standard” certification system, an oil company must meet criteria in six areas including “Corporate Governance, Accountability, & Ethics” and “Climate Change, Biodiversity & Environment.” Equitable Origin certifies oil production sites that adhere to or exceed standards in each category. Every three years, third-party auditors set annual goals for site improvement.
But given its impact on both local environments and on the global effort to address climate change, can oil production ever really be “responsible”? National Geographic spoke with David Poritz, co-founder of Equitable Origin.
How did Equitable Origin come about?
From 2009 to 2012, we developed the EO100 Standard by bringing together oil and gas operators, academics, NGOs, and indigenous communities to develop a set of standards for best practice in oil production for the first time. This resulted in a comprehensive standard that embodied the views and needs of local communities as well as industry, which is important because the goal is to push environmental and social practices where stakeholders want them to go, but it also has to be economically viable.
How did you get Pacific Rubiales to agree to certification?
In 2012, after we finished developing the EO100 standard, we sought companies to implement it in the Andes-Amazon region because there’s an overlap in this area between indigenous people, sensitive ecosystems, and significant underlying natural resources. One of the groups was Pacific Rubiales Energy, who in the context of Colombia is a very large producer that was seeking to innovate and improve their environmental and social practices. The EO100 Standard creates a benchmark to measure progress on a site-by-site basis, so Pacific Rubiales started with their two biggest oil fields, and our vision is that they will take the changes made and scale it up their operation to other sites.
David Poritz, co-founder of Equitable Origin, says he sees his approach to oil as part of a transition to renewable energy. (Photograph courtesy David Poritz)
Pacific Rubiales received EO’s Bronze Leadership certification. What does this mean?
Like a LEED certification for buildings, there are different “levels” companies can achieve based on their performance. In order to communicate a company’s score to the larger public, we developed three performance targets. Pacific Rubiales met 100 percent of the Performance Target 1′s, and in certain areas they exceeded to Performance Target 2. Our system is designed to create a continuum of improvement with every audit, so companies are committing to not only meet certification but to continually improve their practice throughout the life cycle of their projects.
What kinds of things does a company have to do to get certified?
There are six key areas of focus in the EO100 standard. It’s approximately 50 percent environmental and 50 percent social issues, ranging from transparency and ethics to working conditions and local community-level social impacts of the project. For example, ‘Did workers understand the risks of their job?’ Or, ‘Did indigenous communities have the right to say ‘no’?’ We also have a principle on Project Lifecycle Management, where we look at the way all of these components are integrated, because we really want to emphasize indigenous rights. We believe that when an oil project ends, the community should be somehow better off than it was before.
As part of the system, you are also issuing tradeable certificates. Why is this important?
We want to support companies that are doing the right thing by connecting them to end users of oil and gas products. In order to facilitate that exchange, we created a certificate system: Every time a barrel of oil is produced at a location that meets the EO100 Standard, that producer is given a certificate. A consumer or a company can then buy these certificates, and the money goes back to the certified producer to be reinvested in local communities and innovation. As companies are increasingly concerned about the impact of their supply chains, this is an opportunity for big consumers of oil, like manufacturers, to directly engage in the improvement of the conditions under which the fuel they use is produced.
An aerial view of the Quifa-Rubiales site in Colombia (Photograph courtesy David Poritz)
How often do you check in on each project?
The certification cycle is every three years. However, an auditor comes every year because there are certain areas where improvement always has to take place. Auditors review policies, speak with contract workers, and also spend significant time in the field interviewing representatives from the surrounding community, so they aren’t just going out there and taking a water sample for the lab.
What happens if a certified company fails to meet the standards?
When an auditor finds a point of noncompliance, the company has a short period of time to fill that gap or show how they are taking steps to get up to standard. If they fail, their certification can be taken away, and that’s something we disclose publicly because it’s important to the credibility of our system. Reputation-wise, that’s a problem for a company that’s invested multiple years and a significant amount of resources towards obtaining certification.
Do you think that certification sends the wrong signal by suggesting to the public that oil production can be “green”?
Climate change has to be dealt with immediately, which means taking a nuanced, pragmatic approach to fixing the process of our transition to renewable fuel sources. Our main energy source is still primarily hydrocarbons. No one in our company will argue that oil is a sustainable product– but we can make oil more sustainable than it currently is. This issue is not going away; oil is all around us. It’s in the fuel we use to get to work; its in the fuel we use to go on vacation; its in the pharmaceuticals we use to save lives. Site management is also a universal issue: what we see in Ecuador and Colombia we also see in Mexico, North Dakota, Nigeria, and Colorado. There are challenges in oil production that need to be addressed, and this is just one tool. I hope that the EO Standard can be a piece of the larger solution in the fight to mitigate climate change.
A copy of Equitable Origin’s certified site profile for Pacific Rubiales Energy is available for viewing here.