An oil policy for Bahamians
It is more than apparent that a discussion has begun on oil exploration in The Bahamas. However, it is a not a conversation, but rather a one-sided publicity effort by the Bahamas Petroleum Company (BPC) to use the national papers of The Bahamas to generate capital and garner favorable opinion.
The only voice for the people of The Bahamas has been by Minister of the Environment Earl Deveaux commenting that a moratorium still exists on drilling in an effort to quell the premature prospects by BPC to drill in late 2012.
So let us begin the conversation for The Bahamas as a voice for Bahamians to outline just a fraction of the issues The Bahamas must consider, and to question the actions to date.
It is quite astounding that the environmental activist community has been so tight-lipped about the prospective oil reserves, particularly in light of BPC’s current 3D seismic survey. The 3D seismic survey should have required an environmental impact assessment, or focused assessment, discussing noise impacts to marine mammals.
A 3D seismic survey maps the subsurface of the ocean floor by emitting sound waves into the Earth’s crust, measuring the properties reflected back. There is more than enough scientific literature available regarding the effects of low frequency high intensity noise in open water to marine mammals.
The government’s take in terms of royalties is far too low in comparison to other oil producing countries. The Bahamas stands to receive at a minimum 12.5 percent, which increases on a sliding scale comparable to the barrels of oil produced to a maximum of 25 percent. Even with the argument that research and exploration are costly, once extraction occurs the government stands to gain only a fraction of the revenues compared to investors.
The Bahamas should align itself with royalty compensation rates in other oil producing nations. If not, The Bahamas stands to have one of the lowest, if not the lowest, royalty rates of any oil producing country – no wonder we look so good to investors.
The danger with royalty compensation, particularly for petroleum extraction, is the high rate of corruption associated with the considerable influx of cash. The Bahamas should establish an international anti-corruption board comparable to Hong Kong’s Independent Commission Against Corruption (ICAC). The ICAC reestablished Hong Kong’s preeminence after asserting remarkable power to halt corruption.
The Bahamas must also secure the protection of our national resources – most notably the environment. Any discussion for drilling in or near the Cay Sal Bank should include consideration of the area’s remarkable bird populations and recreational uses.
This unique shallow water bank is at the intersection of the Gulf Stream current, the Santaren Channel, and the Nicholas Channel. In the event of a spill, other disaster or termination the government should require BPC to commit to an environmental bond to safeguard and provide the resources to protect the natural environment of The Bahamas and to account for any loss revenue to the tourist and fishing industries.
The people of The Bahamas need more transparency from the government and BPC. There is much confusion in the papers and conversation as to whether or not BPC will begin drilling even as the minister of the environment consistently says no.
We are not against oil drilling – quite to the contrary. The Bahamas needs an additional source of revenue to increase its GDP. Relying on the tourism industry leaves us vulnerable to world events, most notably, terrorist attacks such as those on September 11, 2001 and the most recent economic downtown, which significantly affected the local economy.
The Bahamas should welcome the opportunity for the potential to diversify our economy, but should also extend its right over natural resources and receive the compensation it is due. Private and public stakeholders should be contacted to comment on current regulations and bring these up-to-date with industry and country standards.