FAQ 3: oil and gas, poverty, the environment and human rights

FAQs on how oil and gas relate to poverty, the environment and human rights.

This set of Frequently Asked Questions (FAQs) focuses on the impacts of oil and gas on the climate, the natural environment, water resources and food production, as well as social and human rights impacts.

How do oil and gas impact the climate?

The oil and gas industry was directly and indirectly responsible for more than 40% of global greenhouse gas emissions in 2017. Oil and gas are therefore a primary driver of climate change.

Most of the greenhouse gas emissions from oil and gas are emitted when they are combusted to generate electricity, produce heat or power transport. Greenhouse gases are also emitted during the extraction and processing of oil and gas. A small quantity (< 200 Mt CO2e) is emitted when plastic waste is incinerated.

In terms of the global carbon budget, cumulative carbon emissions between 2011 and 2050 need to be less than 1,100 GtCO2 for a 2°C target. The greenhouse gas emissions contained in current estimates of global fossil fuel reserves are about three times higher than this. A third of oil reserves, half of gas reserves and over 80% of current coal reserves should remain unused from 2010 to 2050 in order to meet the 2°C target.

About 95 kg of CO2 equivalent (kg CO2e) is emitted on average to deliver a barrel of oil to its consumer. However, these emissions vary with the density of the oil produced because extraction technologies are different. At the lowest end, the emissions intensity is less than 45 kg CO2e per barrel of oil equivalent (boe); the highest emissions intensities are more than four times higher, at more than 200 kg CO2e/boe.

In natural gas production, about 100 kg CO2e/boe are emitted. As with oil, there is a large variation between different sources of gas and different trade routes. The highest emissions intensity for natural gas production is about four times greater than the lowest.

Collectively, emissions from the production of oil and gas totalled 5,227 million tonnes of CO2 equivalent (Mt CO2e) in 2017. This is equivalent to about 15% of total energy sector emissions from combustion. More than half of the emissions during oil and gas production (57%) are from the deliberate venting of methane and preventable fugitive emissions. Total emissions from the combustion of oil and gas were about 18 billion tonnes CO2e in 2017 (11.4 billion tonnes from oil and 6.7 billion tonnes from gas), amounting to about one third of all global greenhouse gas emissions.

Emissions from the consumption of oil products can vary substantially: liquefied petroleum gases (LPGs) emit about 360 kg CO2/boe, while heavy fuel oil emits about 440 kg CO2/boe. The global average array of oil products produced from a barrel of crude oil equivalent in 2018 results in about 405 kg CO2 when combusted. There is a much smaller degree of variation in CO2 emissions from the combustion of natural gas, but on average, emissions are 320 kg CO2/boe. (Average combustion emissions for coal, expressed on a comparable basis, are about 540 kg CO2/boe.)

How does climate change impact poor and vulnerable groups?

The Intergovernmental Panel on Climate Change concluded that climate change will deepen existing poverty and exacerbate inequalities, especially for those people already disadvantaged or vulnerable due to their gender, age, race, class, caste, indigeneity and (dis)ability.

People living in poverty in Africa and Asia are expected to be more exposed to drought, flooding and water scarcity. Ecosystems and the security of livelihoods, food and water are likely to be affected. Poorer communities have already experienced negative impacts and, in many countries, the poorest 20% are likely to have substantial income losses.

The World Bank estimates that, without measures to protect poor families from its impacts, climate change could result in more than 100 million additional people living in extreme poverty by 2030. If left unchecked, climate change could help wipe out current gains in eradicating extreme global poverty and push up to 720 million people back into extreme poverty.

Climate change is also projected to increase illnesses that disproportionately affect the poor. Global warming of 2°–3°C could increase the number of people exposed to malaria by 150 million. Higher temperatures and water scarcity will also inhibit hygiene and sanitation, increasing other pathogens. Outbreaks of schistosomiasis and cholera could become more frequent and the burden of diarrhoea could increase by 10%, with children being the most vulnerable. Healthcare expenses already push more than 100 million people into poverty each year. This number is likely to escalate with climate change.

Other climate-related shocks – floods, droughts, storms, heatwaves and pests – can also destroy the crops and homes of vulnerable families, driving them into extreme poverty. These shocks are expected to increase in severity and frequency as a result of climate change. When disasters hit, poorer families lose a greater portion of their income and assets compared with richer families. In addition, poor people tend to have lower-quality homes that are less resilient to natural hazards, and fewer safety nets such as insurance, savings or support from government programmes. Droughts alone could pull 100–150 million people deeper into poverty each decade.

How does the oil and gas industry impact water supplies?

The production and use of oil and gas are inextricably linked to water. The extraction and processing of oil and gas consume large volumes of water, produce wastewater and may accidentally pollute water supplies. These effects have an impact on water supplies, human health and natural resources.

In conventional oil and gas production, water is required for drilling fluid to clean and cool the drill bit, evacuate rocks and sediment, and provide pressure to prevent wells collapsing. In some cases, water is injected into the well to extract residual oil after the main period of production. An estimated 13 billion cubic metres (bcm) of water were used for oil production globally in 2006. According to the International Energy Agency, total water withdrawals for oil and gas production globally were 8 bcm and 2 bcm respectively in 2014.

Oil reservoirs often contain a large quantity of water, known as ‘produced water’, which is extracted along with oil and gas. By one estimate, the quantity of produced water is three times the quantity of crude oil produced globally, amounting to 15 bcm a year. Gas extraction generates about one-sixth as much produced water as oil extraction. Hydrocarbon residue, salts, heavy metals, hydrogen sulphide and boron can all be found in produced water. Produced water is often injected back into wells or, in the case of offshore drilling, discharged into the sea.

Unconventional oil and gas production – the extraction of oil from tar sands and by hydraulic fracturing (fracking) – is considerably more water-intensive than conventional oil and gas. Steam is used to reduce the viscosity of tar sands, making extraction easier, while in fracking, water with chemical additives is injected into shale rock to open cracks and allow oil and gas to escape to the surface. A proportion of this injected water comes back out of the well as wastewater. An average of five to six barrels of water is used for every barrel of crude oil produced, but the quantity can be as high as 30 barrels. The quantity of injected water required for fracking ranges from eight million litres to 30 million litres per well, and the availability of water is a constraint on fracking in some countries.

When crude oil is refined, water is used for steam as an input to the refining process, to wash materials and equipment, and for cooling. This water becomes contaminated with sulphur and ammonia, and requires treatment before further use. Cooling water is the largest use of water during oil refining: three or four litres of water are required for each litre of crude oil. In the US, oil refining requires 4–8 million cubic metres water every day – equivalent to the water consumption of two to three million American households.

Finally, large quantities of water are used for cooling in thermal power generation. Per unit of energy produced, power generation is the most intensive user of water in the energy sector. In the US, power generation accounts for more than half the country’s total use of water and in Europe, it accounts for more than 40% of water use.

The quantity of water used per megawatt hour (MWh) generated depends on the cooling technology and efficiency of power generation, ranging from 75 cubic metres to 450 cubic metres per MWh for steam-cycle generators to under one cubic metre per MWh for combined-cycle gas plants using a wet cooling tower. Older plants tend to be less efficient and consume more water.

Is water pollution by the oil and gas industry a problem?

Conventional and unconventional oil and gas production generates a large volume of wastewater – in the US, 2.5 bcm a year, including produced water. This is usually contaminated with toxic chemicals and heavy metals. It is often disposed of in storage pits, which in some jurisdictions must be lined. These pits can emit air pollution, including benzene (a carcinogen), hydrogen sulphide and volatile organic compounds harmful to cardiovascular health and to local ecosystems. Wastewater is also disposed of in injection wells drilled into porous rock (e.g. sandstone or limestone), which should be isolated from sources of drinking water. In some locations, wastewater is applied to fields, spread on roads or treated for reuse by drilling companies.

Wastewater and other liquid waste from oil and gas production can overflow from pits after rainfall, polluting soil and surface water, or can seep into the ground from unlined pits, torn lining materials or poorly installed liners. This can affect vegetation, soil stability and groundwater, with potential consequences for human and animal health.

Wastewater from deep-water drilling is usually discharged into the sea. The volume and composition of discharges vary between sites, but they can extend more than two km from the well. Measurements from one well in Brazil found discharges of 320 cubic metres of wastewater and 70 cubic metres of other liquid waste. These discharges impact sea life on the ocean floor.

In addition to wastewater disposal, oil and gas extraction, storage and transport pollute water resources through spills and leaks. Accidental releases occur at onshore and offshore drilling sites and wastewater storage units. Oil spills occur when oil is transported by land (pipeline, rail and road) and sea. Spills caused by deliberate and accidental damage to pipelines, as well as poor maintenance, are a significant cause of ground and surface water pollution in Nigeria. In the US, there are about 300 significant pipeline spills a year, due to damage, improper operation and corrosion, discharging about 104,000 tonnes a year in total.

More than 80% of oil spills at sea are small (less than 7 tonnes) and frequently unrecorded. The average number of medium-sized spills (7–700 tonnes) over the past decade was 4.4 per year, and large spills (over 700 tonnes) averaged 1.8 per year, although the frequency of spills is much lower than in the 1970s (78.8 spills a year on average). The main causes of spills are collisions and tankers running aground.

Oils spills account for 12% of the oil that enters the ocean (with the rest coming from shipping, drains and deliberate dumping). Yet, spills from tankers cause significant and long-term damage to local marine and coastal environments because of the volume of oil in one place. The impacts are due to the smothering of organisms, the toxicity of chemicals, ecosystem change, and the secondary effects of operations and chemicals used to clean up spills.

Fracking has been linked to the contamination of surface and groundwater resources with benzene, methane, radiation and a wide variety of other chemicals.

How does the oil and gas industry impact food security?

This section focuses on the environmental links between oil and gas and agriculture. It excludes the use of oil and gas for fertiliser production and the economic effects of oil and gas production on the agricultural sector (e.g. changes in investment and exchange rates).

Oil and gas drilling operations, processing facilities and transport (roads and pipelines) disturb the land, while the associated pollution of soils, vegetation and water damages resources used for food production. Waste and spills from oil and gas contain hydrocarbons, heavy metals, radioactive material, salts and toxic chemicals, all of which have the potential to damage soils and vegetation directly, and eventually groundwater. Air pollution and fires due to spills can also damage agricultural resources.

In the US, oil spills have a negative and statistically significant impact on crop yield, land productivity and farm income. Oil pollution of soils causes loss of organic matter and topsoil, leaching of nutrients, changes in soil pH, salinisation and other forms of soil degradation. Frequent spills can make soil completely unproductive. For example, a study in the Niger delta found concentrations of heavy metals in soil samples from affected communities which were above WHO guidelines. Oil spills in Nigeria, which occur mostly on farmland, have been found to have a herbicidal effect on vegetation, leading to deforestation and threatening the viability of farming.

Oil and gas production and the biosphere

At a global level, all the impacts mentioned mean that the production and consumption of oil and gas also contribute to the deterioration in biodiversity and ecosystem services. Identified impacts include wildlife mortality, habitat destruction and localised air, water, light and noise pollution. This is on top of unplanned disasters such as oil spills and well blow-outs.

Oil and gas prospecting and drilling also pose a direct threat to a number of exceptionally biodiverse regions, including rainforests in the Amazon and the Democratic Republic of Congo, and marine environments such as Belize’s Barrier Reef. A 2015 study found oil concessions had been granted in 77 natural World Heritage sites.

Despite better technologies and training to mitigate some of the worst-case impacts, there will always be a risk associated with oil and gas extraction. For context, there were more than 9,000 oil spills from pipelines alone between 1986 and 2016 in the US. This inability to protect against such devastating impacts was the reason cited by the International Union for Conservation of Nature (IUCN) in calling for a moratorium on exploration in protected and sensitive areas after the Deepwater Horizon disaster in 2010.

How does the oil and gas industry impact human health?

Human health is affected by oil and gas in three ways: pollution from the extraction and processing of oil and gas; combustion of oil and gas causing air pollution; and greenhouse gas emissions from oil and gas causing climate change.

Oil and gas are potentially hazardous through: direct skin contact with polluted soil and water; drinking contaminated water; eating crops or fish from polluted sources; and breathing air polluted by vaporised chemicals or particulates, including from partial combustion of oil and gas.

In the US, residents of oil and gas field communities have reported new or worse health problems after oil and gas development began. The most widespread symptoms include: respiratory problems such as asthma and coughing; eye, nose and throat irritation; headaches; nausea; dizziness; trouble sleeping; and fatigue. Health effects can include birth defects, lowering of white blood-cell count, miscarriages, infertility and cancers.

The combustion of oil and gas, in power stations, vehicles and homes, causes air pollution which affects human health. Exposure to particulate emissions, nitrous oxide and other pollutants is linked to increased incidence of disease, including ischaemic heart disease, chronic obstructive pulmonary disease, lung cancer, lower respiratory infections, premature births, type 2 diabetes, strokes and asthma. Globally, land transport is responsible for 5% of premature deaths attributable to air pollution, and power generation 14%. Air pollution from fossil fuel combustion causes an estimated 12,000 premature deaths worldwide every day and costs 3.3% of global GDP ($8 billion a day).

Are there social impacts and human rights concerns relating to the oil and gas industry?

Oil and gas production have been linked to violations of human rights for many years. The impact has been felt most by vulnerable populations in lower-income countries. There is also growing awareness that the impact of oil and gas consumption on climate change indirectly violates people's rights.

What are human rights?

Human rights are basic standards of treatment to ensure dignity and equality for all. Every person has rights, regardless of nationality, gender, race, economic status or religion, and without discrimination. These human rights include: the rights to life, freedom of expression, privacy, education, an adequate standard of living (including adequate food, clothing and shelter), favourable conditions of work, freedom of association and collective bargaining, and non-discrimination. How human rights apply to vulnerable or marginalised individuals and groups is also set out in the following international human rights instruments:

The right to a healthy environment is also internationally recognised.

Violations of human rights by oil and gas companies can be categorised as direct or indirect. Direct abuses of human rights stem from the operations and actions of oil and gas companies throughout the value chain, and indirect abuses from the operations of suppliers and contractors and from the consumption of oil and gas.

Violations can also be classed as substantive or procedural. People’s substantive human rights such as the right to life, health, water and property can be affected by the extraction and processing of oil and gas. Another common human rights concern is the impact of pollution from oil and gas extraction on water quality and human health. Pollution from oil spills damages ecosystems, farmland and fisheries, and thus affects the right to an adequate standard of living and, by shortening people’s lifespan, the fundamental right to life.

Oil and gas exploration and extraction require a change in land use and entail oil and gas companies acquiring land. Changes in access to farmland, pasture or forest resources and the displacement of families can lead to human rights violations. Rights abuse can occur when land acquisition is improperly negotiated, or compensation is inadequate. In some case, compensation is unable to mitigate the impact of development, for example, where rights to occupy and use land are traditional and where land is invested with cultural or spiritual value and its expropriation affects the right to a cultural life.

Procedural human rights include the right of access to information, the right of participation in decision-making and the right of access to remedy, including access to justice. Access to information enables citizens to understand how the plans and operations of oil and gas companies may affect their rights to life, health and an adequate standard of living. Disagreement about the timeframe, process and scope of community consultation and the establishment of free, prior and informed consent can lead to abuse of the right to participate in decision-making. In many countries, oil and gas exploration and extraction occurs on land which is traditionally integral to the livelihoods and cultural identity of indigenous peoples, who are often socially and economically marginalised.

Oil and gas companies have been known to withhold information from the public. Inadequate consultation with communities affected by their operations, or planned operations, has infringed the right of participation in decision-making. Corruption linked to the oil and gas industry also infringes procedural human rights. The right of remedy is affected by access to information, inequalities between the resources available to oil and gas companies and those seeking remedy, and by protracted contestation of rights abuses.

Finally, successive reports from the Intergovernmental Panel on Climate Change have described how climate change adversely affects people’s human rights. The increasing frequency of extreme weather events and natural disasters, rising sea levels, floods, heatwaves, droughts, desertification, water shortages, reduced agricultural yields, and the spread of tropical and vector-borne diseases directly threaten the human rights of billions of people, including the right to life, water, food, health, shelter, culture and an adequate livelihood.

Because the negative impacts of climate change are disproportionately felt by people in the Global South, the rights of communities and individuals who may already be disadvantaged or vulnerable are most at risk. The negative impacts of climate change can be a threat-multiplier, threatening rights indirectly through, for example, increases in food prices, social disruption and political instability.

As major sources of the anthropogenic greenhouse gas emissions which have caused the climate crisis, the extraction and use of oil and gas affect the enjoyment of human rights indirectly through the impacts of climate change.

Although the preamble to the Paris Agreement states Parties ‘should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights’, climate action to mitigate greenhouse gas emissions and adapt to climate change can also affect the enjoyment of human rights. Some renewable energy projects have led to human rights abuses. Resettlement programmes for people displaced by the impacts of climate change also have a high risk of substantive and procedural rights violations. Therefore, a rights-based approach to planning and implementing such actions is crucial.

Do oil and gas companies have a responsibility to protect human rights?

Governments have a duty to protect and promote all human rights and to create conditions and legal guarantees which ensure everyone is able to enjoy their rights. This includes a duty to refrain from actions that would interfere with or curtail the enjoyment of human rights, and a duty to protect human rights from abuses by third parties, including businesses.

The 1998 Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms recognised that individuals and organisations may also have a responsibility to protect and promote human rights. The responsibility of companies to protect and promote human rights were elaborated further in the Guiding Principles on Business and Human Rights, endorsed by the United Nations Human Rights Council in 2011.

The Guiding Principles make clear that all companies have a responsibility to respect all internationally recognised human rights, avoid infringing on the rights of others and address any negative impacts arising from their actions, including access to effective remedy for those affected. This responsibility applies to all businesses, irrespective of size, ownership or place of operation, and implies businesses can impact all human rights. However, how the responsibility is fulfilled may be proportional to the size and capacity of the company and the severity of its impacts.

Companies complying with the Guiding Principles should have appropriate policies and processes in place. These include a policy commitment to respect human rights, a due diligence process to identify, mitigate and account for how they address their impacts on human rights (including through third parties such as suppliers and contractors), and processes to enable remediation.

An indication of the extent to which large oil and gas companies comply with the Guiding Principles is contained in the Corporate Human Rights Benchmark 2019 report which includes scores for 56 companies in the extractives sector. On average, these companies scored 3.2 out of 10 for policy commitment and governance, and 6 out of 25 for due diligence and embedding human rights in company culture and practices.

Andrew Scott and Sam Pickard