Environmental Law and the Oil, Gas and Biofuel Industries
© Springer International Publishing Switzerland 2015
Yanko Marcius de Alencar Xavier (ed.)Energy Law in Brazil10.1007/978-3-319-14268-5_77. Environmental Law and the Oil, Gas and Biofuel Industries
(1)
Department of Public Law, Federal University of Rio Grande do Norte, Natal, Brazil
Abstract
The present chapter will discuss the Brazilian environmental legal system in regard to oil, natural gas and biofuel activities. The current law about the energy matrix exhibits a series of minimal guidelines for reasonable sustainable exploitation and a vast array of compensatory and possibly punitive mechanisms, in regard to environmental issues. The work starts with the Brazilian Federal Constitution of 1988, showing the regulatory jurisdictions and mechanisms contained in the National Policy for the Brazilian Environment (Federal Law No. 6.938/1981), especially environmental licensing in the sector; it also covers specific guidelines such as the Environmental Crimes Law (Federal Law No. 9.605/1998), the National Contingency Plan (Federal Law No. 9.966/2000), and distinct issues such as Air Pollution, Seismic Research and Water Disposition on Exploration Platforms. All of these issues are approached from a general viewpoint and linked to legal and environmental repercussions in the sector under study.
7.1 Introduction
The advent of legislation protecting the environment as a valuable asset in itself is relatively recent worldwide. Initially, environmental issues emerged for economic reasons; that is, forests and fruit trees were protected because of the riches derived from such environmental goods, or the hunting and fishing of certain specimens were protected to maintain their reproductive capacity and ensure their economic benefits. The first legal measures, including international ones, were very specific, considering only economic resources in the protected species.1
However, going beyond local environmental impacts, large natural disasters engendered recognition of the need for environmental protection as an integrated system,2 essential to a healthy quality of life. Thus, the environment came to have a value in itself, to be relevant to society and therefore legally protected, especially through international treaties starting in 1970.3
Irrespective of legal protection, it is important to understand that the existence of human life is intricately linked to its surroundings, that is, the environment. Humanity developed with the use of natural resources, the material basis of human action. It is therefore impossible to dissociate “the economic fundamentals of a coherent and practical environmental policy. Moreover, a coherent economic policy does not ignore the need for a policy to protect natural resources.”4 Indeed, it is impossible to think of development without considering the environmental variable.
On the path to human development, the use of energy sources was an essential factor. The evolutionary history of humanity is usually linked to discoveries and the large-scale use of certain energy matrices. Current unprecedented productivity is a result of the dynamicity provided by available energy sources. However, the environmental impacts caused by energy use are as big as the benefits accrued by society.
The current proposal for many problems related to the energy matrix usually involves adopting new sources, namely “clean energies.” However, this perspective requires long-term implementation, which is insufficient given the urgent energy requirement. Thus, in the meantime, the main attitude for decreasing the effect of pollution—in addition to the obvious fostering of other energy activities—consists of managing waste and mitigating its effects.5
Along these lines, the current law regarding the energy matrix exhibits a series of minimal guidelines for reasonable sustainable exploitation and a vast array of compensatory and possibly punitive mechanisms, in regard to environmental issues. In the case of the mining sector, the need for effective measures is inherent to the activity, given the locational rigidity of extractivism with respect to reservoirs6; that is, mining can only be developed where mineral deposits are located. These resources are commonly situated in sensitive environmental regions, demanding caution during exploitation.
Given the need for nonclean energies, combined with more sustainable alternatives in the oil, natural gas and biofuel industries in Brazil, there are a large number of guidelines that are directly or indirectly related to environmental questions. Accordingly, the present chapter will discuss the Brazilian environmental system in regard to oil, natural gas and biofuel activities. To that end, we will start with the Brazilian Federal Constitution of 1988, showing the regulatory jurisdictions and mechanisms contained in the National Policy for the Brazilian Environment (Política Nacional do Meio Ambiente—PNMA) (Federal Law No. 6.938/1981), especially environmental licensing in the sector; we will also cover specific guidelines such as the Environmental Crimes Law (Federal Law No. 9.605/1998), the National Contingency Plan (Federal Law No. 9.966/2000), and distinct issues such as Air Pollution, Seismic Research and Water Disposition on Exploitation Platforms. All of these issues are approached from a general viewpoint and linked to legal and environmental repercussions in the sector under study.
7.2 The Constitutional Basis of Environmental Protection in Brazil
Unlike its predecessors, the Federal Constitution of 1988 approaches environmental protection already under the influxes of an international setting. Despite difficult legal work, the environmental issue remained in the text of the Constitution. Because this protection is not distributed among several legal provisions, the Constitution created basic guidelines that are spread across Brazilian law. The relevance of environmental issues led many authors to dub the Brazilian Constitution the “Green Constitution.”7
In practice, a large number of constitutional guidelines regarding the environment are found in art. 225 and its paragraphs, the most relevant of which will be discussed here.
Article 2258 consecrates the right to an ecologically balanced environment and also creates an obligation, both on the part of the Public Power and the collectivity to protect the environment for present and future generations. This ecologically balanced environment is “a good for the common use of the people,” as expressed in the Constitution itself, not to be confused with the expressions private good or public good, but rather an environmental good, a peculiar species,9 characterized as public patrimony,10 a collective patrimony11 belonging to all of society, a “legal macrogood, distinct from the tangible goods that it is made of, and in this respect, unexpropriable, unavailable and indivisible, since they are a patrimony with diffuse ownership, aimed at the quality of future generations.”12
According to item III, § 1 of art. 225,13 it is up to the Public Power to define specially protected areas. To that end, Federal Law No. 9.985/2000, which instituted the National System of Nature Conservation Units, was created. Art. 714 of this Law defined two types of Conservation Units: the Full Protection Units, in which, as a rule, only the indirect use of natural resources is permitted, and the Sustainable Use Units, in which an attempt is made at reconciling conservation with the use of part of the resources. These definitions are relevant for determining the feasibility of oil exploitation undertakings or oilseed crops for biofuels, for example. In general, when comparing the concepts of Federal Law No. 9.985/2000, oil exploitation would only be possible in Environmental Protection Areas and Sustainable Development Reserves, considering environmental studies of these areas.15
In § 1 of art. 225, item IV16 refers to the need for environmental impact studies on activities that are potentially degrading to the environment. This is certainly the issue with the largest number of environment-based legislative instruments and regulatory conflicts, from which the oil, natural gas and biofuel industries cannot escape and will be discussed in greater detail in the subsequent topics.
There is reference to the specific case of the exploitation of mineral resources in § 2 of art. 22517—which encompasses oil and natural gas in Brazil18—consigning the obligation to recover any degraded areas, under the terms stipulated by the relevant environmental authority. This obligation illustrates the importance of mineral resources and highlights the need of the entrepreneur to repair, as much as possible, any damage caused. It is often not possible to completely repair environmental damage; when this occurs, it is common to impose fines. However, priority is given to the specific repair “and only in the event of failure will monetary penalties be imposed.”19 In this step, the priority, as mentioned, must be on recovering the degraded area.
The responsibility for environmental questions is contained in § 3 of art. 225.20 The constitutional norm under study assigns liability to people or companies for environmental damage and the obligation to repair such damage, as well as the possibility of imposing administrative or even criminal penalties.
Also with respect to liability, Brazilian law assigns strict civil liability in the environmental question (§ 1 of art. 14 of Federal Law No. 6.938/198121), that is, it discusses only elements of damage and chain of causation but ignores fault.22
In Brazilian doctrine for classic theory—also called the theory of fault—liability assumes the existence of fault, and without proof of such fault there can be no indemnifiable damage.23 Although there are situations in which damage and conduct of the agent are obvious, it is a complex task to determine the subjectivity of fault. Along this line, the legal order modifies the system of liability, decreasing the element of fault, seeking to objectively determine the existence of risk.24 Thus, in regard to strict liability, it is improper to assign fault, but it is possible to characterize the existence of damage and causality between the conduct of the fault party and the damage caused. That is to say that the two regimes of liability coexist harmoniously, turning to the legislature when the element of fault is removed.25
In the environmental area, the norm itself precludes fault, obliging the entrepreneur to repair the damage caused—that is, it only requires proof of damage and chain of causation, assuming that the business activity assumes the risk and any resulting penalties. In Brazil, understanding this form of environmental strict liability varies for the doctrine, from the conception of profitable risk (in which those who take advantage of the benefits must bear the penalties, but allowing exclusions such as unforeseeable circumstances) to full risk (in which only the demonstration of damage or causality is required, without any exclusions).26
In addition to the guidelines contained in art. 225 of the Federal Constitution, the aforementioned guideline also deals with the topic of administrative and legislative authority27 on environmental issues. Because Brazil has adopted the federalist form of government (reflected in the institutional design of legislative authority in environmental material) and its territorial extension, the issue poses a number of difficulties, primarily because the borders between States and the rigid forms of administrative action are supplanted by environmental questions as a result of the interwoven nature of the ecosystems.
Since it is in the interest of all entities of the federation to protect the environment, the Constitution in art. 23, items VI and VII,28 consigned administrative authority in environmental matters to the Union, States, Federal District and Municipalities. In other words, “all federative entities simultaneously have identical authority (…) all can act administratively.”29 In this case, the single paragraph of art. 23—added through Constitutional Amendment No. 53/2006—relegates to a Complementary Law the systematization of cooperative mechanisms among such entities. Only with Federal Law No. 140/2011 was the issue regulated, delimiting and minimally distributing environmental authority.30
The authority to legislate about environmental matters is also the object of the federal constitutional text in its art. 24, items VI, VII and VIII,31 creating the possibility of concurrent legislation of the Union, States and Federal District. In this case, although both can legislate, a vertical distribution of authority occurred, it being up to the Union to edit generic norms and guidelines regarding the issue and the States and Federal District to distinguish them. Because it is concurrent legislation, the paragraphs of art. 2432 explain that, as a rule, the Union determines general guidelines—that is, guidelines that do not detail the issue are only wide-ranging principles and general frameworks33—and the States, supplementary norms.
These circumstances of the constitutional system of legal and administrative authority generate potential normative conflicts regarding environmental issues, whether in licensing regulation, implementation of an economic activity or even the administrative sanctioning of illicit practices. This undermines efficient state performance in protecting the environment and compromising the scenario for energy ventures.34
7.3 Energy Regulation and the Environmental Question
Regulating the oil, natural gas and biofuel industries is closely related to existing environmental protection guidelines, especially given the degrading potential of energy exploration activities. In this respect, the different norms that regulate the energy sector are interconnected with the environmental question.
Oil Law (Federal Law No. 9.478/1997) casts no doubt on environmental importance in the sector, with protecting the environment and conserving energy the primary objectives of the National Energy Policy (art. 1, item IV).
In addition to rational use, the discovery of new energy sources is also included as an objective. Federal Law No. 11.097/2005 inserted item XII, in art. 1 of Federal Law No. 9.478/1997, stating the added participation of biofuels in the Brazilian energy matrix as an objective.
An additional alteration of the Oil Law, by means of Federal Law No. 12. 490/2011, included six more goals to be achieved by the National Energy Policy, as follows: guarantee supply of biofuels to the entire country (item XII), encourage the generation of electrical energy from biomass (item XIV), promote competition in the international biofuel market (item XV), attract investments in infrastructure for biofuel transport and storage (item XVI), support research and development related to renewable energy (item XVII), mitigate gas emissions that cause the greenhouse effect and pollutants in the energy and transport sectors, including the use of biofuels (item XVIII).
Engaging in good practices and the conservation of oil, natural gas and biofuels is an express attribution of the National Oil, Natural Gas and Biofuels Agency (art. 8, item IX). Another attribution of the Agency includes coordinating with other environmental regulatory agencies at the state level, aimed at standardizing guidelines applicable to the natural gas sector (art. 8, item XXVIII). Resolution No. 08/2003 of the National Council for Energy Policy contains a guideline stating that the ANP coordinates with environmental entities to delimit areas that qualify for the bidding process, excluding those with environmental restrictions. The dialogue between the regulatory agency and environmental entities produces guidelines for each round of bidding, involving a host of preliminary technical studies on the viability of oil exploitation in the areas that will be up for bids. These studies are available on the Internet, on the pages related to the bidding rounds.
Article 28 of the Oil Law deals with the circumstances related to extinction of the concession contract. In this case, § 2 of art. 28 is clear in specifying the onus on the concessionaire to repair or compensate for any damages incurred in exploration, as well as implement actions aimed at recovering the environment of the concession area.
Still dealing with concession contracts, arts. 43 and 44 establish the minimum contents of the aforementioned contract, especially, item. I of art. 44, which stipulates the obligation of the concessionaire to adopt measures necessary to conserve the reserves that will be explored or other natural resources, aimed at protecting the environment. Item VI of art. 44 also points to the importance of rationalizing exploration, requiring the concessionaire to adopt better practices to control the decline in reserves.
Environmental repercussions also reflect in the direction of government participation laid down in art. 45 of the Oil Law. Royalties and special participations are destined to sectors clearly affected by energy conservation and environmental protection.
In the case of royalties, they account for 10 % of monthly oil and natural gas production (art. 47); of this amount, 13 %, from onshore (49, item I, paragraph “d”) or even offshore reserves (49, item. II, paragraph “d”), is destined to the Ministry of Science and Technology (Ministério de Ciência e Tecnologia—MCT) to finance research and development programs applied to the oil, natural gas and biofuel industries. With the advent of Federal Law No. 11.921/2009, new possibilities for investments in the MCT were added. These can also be allocated to programs aimed at preventing and recovering from damage caused to the environment by these industries.
Special participations are related to large or highly profitable exploration fields and are specific percentages, regulated by a Decree. Art. 50, § 2, item II, assigns part of the special participation revenues (10 %) to the Ministry of the Environment. Federal Law No. 12.114/2009 altered the item, adding a series of paragraphs, directing resources preferentially to environment management activities.35
Refining is also contemplated in the Oil Law, requiring in § 1 of art. 53 that the ANP establish project rules in terms of environmental protection, and only by complying with them, in accordance with § 2, art. 53, will authorization to undertake the activity be granted. In the transportation sector, both authorization and title transfer depend on compliance with environmental protection and transport safety measures (art. 56, single §).
The biofuel industry was included in oil industry legislation with the advent of Federal Law No. 12.490/2011, which added Chapter IX-A, entitled “Economic activities in the biofuels industry.” Article 68-A points to the need for ANP authorization to operate in the biofuel sector. In § 2 of the same article is the express requirement of an environmental license to exercise the activity. However, Federal Law No. 11.097/200536 provided the first steps for adding biodiesel to Federal Law No. 9.478/1997, altering various items in it.
With respect to natural gas, Federal Law No. 11.909/200937 was edited, from treatment and processing to the transportation and commercialization of gas. Art. 1, § 3, item I, states the need for complying with technical and environmental guidelines.
The importance of repairing environmental damage is discussed in art. 14, § 3 of the aforementioned law, which states that, even if the concession is extinct, it falls to the concessionaire to conduct environmental recovery.38 Article 17 deals with environmental licensing, by establishing in item V39 that, in the bidding process of the gas sector, the concessionaire must obtain the required licenses. The importance of environmental prevention is the basis of art. 22, item II,40 which obliges the concessionaire to adopt specific measures that guarantee environmental protection.
This description makes it clear that there is a connection between oil, natural gas and biofuel legislation and environmental regulation, complying with constitutional guidelines and Brazilian energy policy. However, environmental protection guidelines do not create a specific legal framework. In addition to these sector guidelines, the execution of activities in the segment is subject to a series of general environmental rules, established by Brazilian law, which will be discussed below.
7.4 National Environmental Policy
Before the advent of the Federal Constitution, amid global discussions on the environmental issue, Federal Law No. 6.938/1981 was edited. Even after the Federal Constitution of 1988, the aforementioned Law was received by the new constitutional order and remains in force, regulating a number of topics pertinent to National Environmental Policy.
The law that instituted the PNMA consolidated the National Environment System (Sistema Nacional do Meio Ambiente—SISNAMA) and National Environment Council (Conselho Nacional do Meio Ambiente—CONAMA), as well as favoring the implementation of environmental entities at the state level.
The delimitation and creation of the SISNAMA is the object of art. 641 of Federal Law No. 6.938/1981, in which its items consist of a system composed of entities, as follows: (a) higher authority: Government Council, (b) consulting and deliberative authority: National Environment Council (CONAMA), (c) central authority: Environmental Secretariat of the Presidency, (d) executor entities: Brazilian Institute of the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis—IBAMA) and the Chico Mendes Institute for Biodiversity Conservation (Instituto Chico Mendes para Conservação da Biodiversidade—ICMBIO), (e) sectional entities: state entities responsible for control and inspection, (f) local entities: municipal entities responsible for control and inspection.
Pragmatically, CONAMA emits resolutions that contain technical guidelines relevant to the implementation of undertakings, whereas executor, sectional and local entities are responsible for inspection and control, as well as licensing of undertakings. Currently, the authority to license has been altered, and distributed based on Federal Law No. 140/2012, as discussed in the subsequent item.42
After this first step to implement PNMA, a reasonable period of time transpired until the onset of operations. Only in 1986 did CONAMA emit its first resolution on the Study of Environmental Impact, CONAMA Resolution No. 001/1986. Ever since this initial step, the aforementioned authority has been expediting guidelines concerning environmental licensing of several different activities.
It is important to mention the constitutional protection of the environment, given that it was created after the law that instituted the PNMA. Since this guideline was instituted prior to the Federal Constitution of 1988, it was received by the new constitutional order, given that it is completely compatible.43
Only after the adoption of the new Constitution was the Brazilian Institute for the Environment and Natural Resources (IBAMA) created by Federal Law No. 7.735/89. IBAMA is responsible for the executive activities of SISNAMA, which, despite being created in 1981, was only regulated in 1990, through Decree No. 99.724.
Although more than 30 years have passed since the guideline that created the PNMA, there are still many problems for its full operationalization. The complex issues that hinder implementation of this policy range from technical or structural flaws in the competent authority to the complex distribution of competency, leading to omissions in SISNAMA entities, in addition to impunity, whether civil or criminal, of certain behaviors harmful to the environment.44 Several factors, including a peculiar unacceptability of the preeminence of environmental issues in the face of social problems, contribute to the challenges of environmental policy. However, there is evolution, albeit slow, regarding the importance of protecting the environment and the consequent implementation of environmental legislation. The requirements of licensing procedures related to polluting activities are a demonstration of this progress.
7.5 Environmental Licensing
The National Environmental Policy (PNMA) Law, Federal Law No. 6.938/1981, was the first guideline that gave rise to the full protection of the environment. Article 10 of the aforementioned Law, already established that constructing, installing or implementing undertakings that are effective or potential polluters, or that may cause any form of environmental degradation, will depend on prior licensing.45 Starting from this guideline, environmental licensing was selected as one of the ways to comply with the PNMA and was once again consigned to the constitutional text in 1988.
Licensing is an important practice in that it enables conciliation between necessary and unstoppable economic development and environmental protection, thereby achieving much yearned for sustainable development, making use of current resources without compromising future generations. Thus, environmental licensing “must not work against industrial development, in cases where proper management allows an ecologically safe and productive intervention,”46 but rather conciliate economic and social development with environmental preservation, establishing environmental quality standards and regulating the use and management of natural resources.47
Environmental licensing is nothing more than an administrative procedure through which the competent environmental authority, considering technical regulations, assesses the location, implementation, expansion and operation of undertakings that use natural resources and are considered to be effective or potential polluters or that may cause environmental degradation. This concept is found in art. 1, item I of CONAMA Resolution No. 237/1997.
It is important to point out that this is not a mere administrative act but rather a procedure, that is, a sequence of interconnected activities carried out by Public Administration in order to reach a certain end determined by law.48 Unlike the license—an administrative act in itself that bestows the right to engage in a determinate activity—licensing focuses on the procedure, that is, the steps that must be fulfilled for the license to be issued.
7.5.1 General Environmental Licensing
Foremost, it must be underscored that procedural rules in environmental licensing contain generic definitions with respect to CONAMA resolutions. It is common to adopt individual guidelines, resulting in different procedures in state environmental agencies. With regard to these alterations, the generic outlines traced will be those described below, particularly in art. 10 of CONAMA Resolution No. 237/1997.
Thus, when aiming to implement an undertaking, even though only potentially polluting, the applicant must request an environmental license from the competent authority (item II of art. 10). To that end, entrepreneurs, in the planning phase and before beginning operations at a determinate site, must contact the competent environmental authority and state their intention to enter into the undertaking, in order to obtain the necessary license.
On presenting themselves to the environmental agency, entrepreneurs are duly instructed about the requirements they must fulfill (items I and III of art. 10). These requirements will depend, among other factors, on the nature of the activity, as well as the magnitude of the impact generated (art. 12).
It should be pointed out that environmental licensing requests must be duly published, under the terms of CONAMA Resolution No. 06/1986,49 which contains the instructions for publication in the Official State Diary, as well as the minimum elements that must be included in the publication. Activities with significant environmental impact must comply with this regulation. When the impact is not significant, in accordance with art. 250 of CONAMA Resolution No. 281/2001, the competent environmental authority can establish simplified publication models.
After the request is received, the environmental agency then provides the entrepreneur with a term of reference, which is nothing more than a guide, a document that contains the list of requirements to be fulfilled so that the license can be finally issued.
There are several elements that may be required by the environmental authority to issue the license. CONAMA Resolution No. 02/1996, for example, allows for the possibility of requiring undertakings with large environmental impact to create a Conservation Unit, which should preferentially be located within the area of the undertaking.51 This demand was also included in Federal Law No. 9.985/2000, in cases of ventures with significant environmental impact.52 These costs are regulated by art. 31 of Federal Decree No. 4.340/2002.
Another example is CONAMA Resolution No. 10/1996, which deals with environmental licensing in beach areas where marine turtles lay their eggs, requiring an assessment and recommendation from IBAMA, representing the Marine Turtle Center (TAMAR), in addition to consultation with the Secretariat of National Heritage and Ministry of the Navy.
There is also the possibility of a public hearing. Since this is not a mandatory activity in the licensing process, it is of great importance since it allows the participation of citizens directly affected by the undertaking, as well as technicians and scientists who did not take part in environmental studies, leading to a rich and fruitful debate.53 CONAMA Resolution No. 09/1987 regulates the formalities and procedures to call for and hold a public hearing.
Furthermore, we should consider that there are a host of technical studies that may be required. CONAMA Resolution No. 237/1997 is explicit in Annex I in the activities subject to environmental licensing54 and stipulates in art. 2, § 2, that the competent environmental authority establishes licensing criteria,55 underscoring the need for Environmental Impact Studies for activities considered “effective or potential causers of significant environmental degradation.”56 Other cases (activities that generate less impact) require less complex studies, such as Assessment of Environmental Impact (Avaliação de Impactos Ambientais—AIA) and Report on Neighboring Impact (Relatório de Impacto de Vizinhança—RIV), among others.
Irrespective of denomination, these studies are conducted by a technical team paid for by the entrepreneur (art. 11). This team will perform a complete environmental diagnosis of the area, including the physical, biological and socioeconomic conditions, analyzing the impacts resulting from the proposed activity, proposing measures aimed at mitigating these impacts and suggesting a monitoring plan for the area, in order to accompany the evolution of the impacts and solve problems that emerge during the course of the activity.57 Evidently, the degree of complexity of these studies will be directly correlated with the size of the undertaking, as well as the magnitude of the impacts caused.
These studies are conducted by teams composed of different types of professionals since the environmental study involves areas of knowledge in various sciences and will not be under the incumbency of a superprofessional.58 Engineers, architects, biologists, geologists and technicians from various areas belong to these multidisciplinary teams, ensuring that several facets of scientific analysis are conducted, providing a holistic analysis of problems. Furthermore, the members of this multidisciplinary team are legally responsible for the data presented to the legal authority. Once the documentation required by the environmental authority is presented, it is checked, as are the proposed technical studies, and if no irregularities are detected, the request for the prior license is accepted.
As for the other generic modalities of the licenses (installation and operation), as previously mentioned, the granting of licenses depends on the fulfillment of previously imposed conditions. Thus, with respect to the operating license, for example, it is determined whether requirements of previous licenses were duly fulfilled or if new studies are needed.
As established in art. 8 of CONAMA Resolution No. 237/1997, there are three basic types of license, as follows: prior license (Licença Prévia—LP), installation license (Licença de Instalação—LI) and operating license (Licença de Operação—LO).
The first type of license (prior) is conceded in the initial phase of the project, in order to assess the location of the undertaking and if it was appropriately conceived with the surrounding environment, attesting its viability. In this phase, potential impacts and the conditions to be observed for implementation of the venture are verified.
The installation license authorizes the entrepreneur to initiate the activity. This installation must be in full compliance with the projects presented to the environmental authority, not forgetting the conditions imposed in the preliminary phase, which are determinants for the subsequent operation.
The last type of license (operation) authorizes the effective onset of the activity, provided that compliance with the requirements of previous licenses has been observed and verified, as well as environmental control measures established for the activity.
It is underscored that some undertakings require specific licensing with particular instruments and denominations. For example, in the case of environmental licensing for oil exploitation, in light of its specific nature, there are other types of licensing established by CONAMA Resolution No. 023/1994, such as the prior license for drilling and the prior license for exploration.
7.5.2 Environmental Licensing in the Oil, Gas and Biofuel Industries
To put questions involving environmental licensing in the proper order, it is important to understand the productive chain of these industries. In the oil industry, production stages are well defined, as follows: Exploration, Production and Refining59 (upstream), as well as Distribution and Sales (downstream).
In the natural gas industry, the stages are somewhat similar, with the exception of Refining, which is replaced by Natural Gas Processing.
In the case of biofuels, downstream (Distribution and Sales) is identical and is actually part of the oil production chain. The peculiarity of biofuels lies in the upstream since the Exploration and Production phases will depend on the raw material used in biodiesel production, which can be varied, such as animal tallow, residual oils and, as normally occurs in Brazil, with the cultivation of oleaginous plants, since refining and processing would, as a rule, be understood as the Oil and Biodiesel Production stage.
Activities in the oil, natural gas and biofuel industries are part of the general dispositions surrounding environmental licensing, that is, they comply with the basic guidelines of CONAMA Resolution No. 237/1997. However, considering the peculiarities and impacts of the sector, regulating the environmental licensing of these activities falls into the requirements of more complex undertakings, with more rigid demands and more complex studies. Furthermore, there are a number of specific guidelines that are aimed specifically at the sector. In the case of oil and natural gas, Resolutions No. 023/1994 and No. 350/2004 regulate relevant issues such as exploration and production and seismic research, respectively.
However, IBAMA recently published Ordinance No. 422/2011, regarding the federal environmental licensing of oil and natural gas exploration and production in the marine environment. The aforementioned guideline divides the topic into four chapters: seismic research licensing; well drilling licensing; licensing of production, oil and natural gas flow line; and long-term testing.
The ordinance also regulates a series of environmental studies, aimed at updating the CONAMA Resolution. This ordinance highlights a regulatory problem since, given the jurisdiction defined in the National Environmental Policy, IBAMA is characterized as an executor authority, while CONAMA is in charge of regulating the issue. In that the ordinance seeks to update and improve the regulation, as well as standardize the items, it leads to legal confusion, with the executor authority encroaching on the specific issue of the deliberative authority.
In any case, once this question is overcome, analysis of environmental licensing for oil, natural gas and biofuels is conducted considering the stages of the productive chain previously mentioned.