1.

The project would require the construction of a 5-kilometer major new road to bring heavy machinery to Well site no. A1, yet the EIA contains virtually no analysis of the ecological and environmental impacts of this new road, which would likely be severe and permanent.

According to the EIA, Well site no. A1, located in Sarstoon Temash National Park (STNP), is a high priority well site for which a major new road would be constructed in order to bring heavy machinery, including a drilling rig, to the site of the proposed well. Page 149 of the EIA states. Entrance to drill Site A will be from the Crique Sarco and Sunday Wood Road which runs from NE to SW and then along a logging road which joins to this road and runs south towards the STNP. From the main road about, the project will need to construct 5km of roads (including the rehabilitation of the logging road) to reach the boundary of the park (see Figure 9.2). From the boundary of the park the road will extend 900km in the direction of Site A. This means that the road will not reach the location of the prospect; therefore US Capital Energy will position the rig some distance from the prospect and use directional drilling to drill into the formation. The new road that US Capital Energy would construct in STNP would not be a minor, temporary road, but a major road as needed for allowing trucks and several thousand metric tons of equipment, including a drilling rig, to the well site. Page 152 of the EIA states: The new sections of the road will require considerable amount of work to make it suitable to accommodate the heavy vehicles that will travel over it en route to and from the drill site. This will necessitate the deposition of a large amount of fill to build up the road level to sustain the weight of the vehicles and raise the road sufficient above the flood zone. Fill for the roads will be sourced from local quarries along the Crique Sarco to Sunday Wood road and along the old logging road. The logging road itself is in a bad state of disrepair and will require considerable upgrading to make it fit for purpose (see Plate 9B, Bottom Left). Figure 9.2 on page 150 of the EIA is a map showing the location of new roads, including the location of the new road that would connect the existing road (Crique Sarco and Sunday Wood Road) to Well site A1. However, this map grossly fails to depict the ecological characteristics of the land the new road would go through. Using coordinates for the well locations provided on page 9 of the EIA, below is a Google Earth satellite image showing the location of Well site no. A1 and the major road US Capital Energy would build to gain access to this location:

The image above illustrates the immense damage such a new road would have on the ecological integrity of this region of STNP. When a road of this nature bisects a unique ecosystem as depicted above, a thorough analysis of the ecological harm the road would cause must be presented. According to the U.S. EPA, a quantitative assessment is necessary to inform decision-makers about the potential environmental impact of a proposed road, especially one a unique and high-quality ecosystem such as STNP: The construction of highways can have a substantial impact on the degradation and loss of natural ecosystems, especially in less developed areas. . Perhaps more importantly, the fragmentation of habitats caused by highway development is often severe .. Transportation routes can be described as disturbance corridors that disrupt the natural, more homogeneous landscape .. In forested environments, these disturbances can cause (1) dramatic physical disruption to the continuous vegetative community; (2) disruption to the structure and function of habitat; and (3) impacts to resident wildlife, which must negotiate, tolerate, and cope with the habitat barriers. In addition, disturbance corridors created by forest fragmentation alter the natural mix of habitats and species by providing

conditions suitable for early successional plants and animals. They replace forest trees with grasses and shrubs, eliminating nesting habitat for forest-interior species. While they provide dispersal routes for certain small mammals, they present barriers to many species. The direct, indirect, and cumulative impacts of highway development can be grouped into three general categories: 1. Destruction of habitat (resulting in the elimination of certain habitat types and their replacement with non-natural uses or with specialized semi-natural habitats). 2. Fragmentation of habitat (resulting in the loss of habitat integrity through the creation of barriers to speciesand ecological processes). 3. Degradation of habitat (resulting in the loss gf habitat integrity through disturbance of resident species, contamination with pollutants, alteration of natural processes, and introduction of exotic species). . In general, highway development rarely eliminates entire habitat types, but instead destroys part of a habitat, leaving other areas intact. In most instances this local habitat destruction is better thought of as habitat fragmentation. Such fragmentation is the principal cause of the loss of area-sensitive species and is considered the most serious threat to biological diversity . Ultimately, ecosystem endpoints must be selected based on biodiversity conservation principles. These endpoints should be quantifiable environmental attributes for which a baseline can be established and subsequent monitoring done. Distinct local ecosystems and vegetative communities should be identified; where these habitats are natural or ecological significant it should be so indicated. The areal extent of each community should be determined and the absolute and relative decrease in area (acres) calculated for highway land conversion impacts. In addition to determining areal impacts to distinct local ecosystems and vegetative communities, adverse effects to remaining habitat areas should be determined. Highway development frequently alters surface and subsurface water flows. Changes in rates and total volumes should be quantified and their effects on nutrient and energy cycling described. Quantitative systems cycling studies may be possible in some instances. Number of sensitive species: Both rare and ecologically important species should be identified and counted. . In addition to the number of different species, the demographic status of each sensitive species (including genetic composition) should be evaluated. Changes in age class distribution, sex ratios, and subpopulation migration can be measured. Fragmentation caused by highway development results in reduced

connectivity of habitats. Connectivity of single habitat types, or general classifications such as contiguous forest, can be measured using pattern analysis (e.g., fractal geometry) and GIS techniques. General wildlife diversity-productivity scores can be determined for specific wetlands using 10 criteria .. These criteria include 3 based on vegetational community composition, 3 on wetland structure, 2 on wetland hydrology, 1 on adjacentland use, and 1 on water chemistry. More commonly, the Wetland Evaluation Technique (WET) developed for FHWA can be done to determine a functional assessment . Wetland functions of concern include nutrient removal/transformation, sediment/toxicant retention, sediment stabilization, flood flow alteration, groundwater recharge, production export, aquatic diversity, and wetland-dependent bird habitat diversity. WET II analysis can be used to develop a rating value for wildlife with a high rating designating floodplain wetlands, large and vegetationally diverse wetlands, and moderate-size wetlands that are oases or complexes with some interspersion .. Individual functions of wetlands such as plant and wildlife support, flood protection, and water quality should be determined and mitigation designed to replace lost values. Instead of a necessary, quantitative assessment of how the new, major road would impact ecosystems functions of STNP, the EIA presents this banal, 4-paragraph assessment on page 236 of the EIA: Construction of the access road will result in the clearing of virgin forest land on the portion of the road leading into the park and within the park. In all about 1.35ha of land will be cleared within the park for the new access road and about 7.5ha outside the park. Some additional removal of vegetation will also be required along the existing logging road but the total amount removed will be very small. The building of the road will result in a small area of deforestation however the impact on the larger ecosystem of the area will be small. The biggest potential impact will be as a barrier to wildlife which are obligate arboreal species such as Spider and Howler Monkeys. The road will create a ready access for hunters, loggers and others intent on carrying out illegal activities within the park and adjacent areas. Building of the road will expose the soil to erosion and result in sediments running off into streams and associated water courses affecting the natural drainage and creating turbidity. The use of culverts and properly cut drains will reduce impacts from this source. Use of few diesel driven vehicles for transport of drilling equipments, personnel and material will also generate exhaust gases as well as some dust from unpaved roads within communities. Gaseous pollutants in vehicular exhausts will be quickly dispersed. Dust generated due to vehicular movement on unpaved roads in the dry periods will be relatively coarse and will settle quickly. During rainy periods dust emissions will not present a problem.

This is an unacceptable assessment: it fails to provide decision-makers with detailed, quantitative information they need to judge whether the environmental and ecological consequences of the new, major road outweigh the potential benefits of the project. The conclusion of this cursory analysis that the impact on the larger ecosystem of the area will be small is not credible because it lacks the necessary analysis of what the impacts of the new road would be, including critical details such as: 1) the areal extent of each vegetative community and the absolute and relative decrease in area (acres) calculated for highway land conversion impacts; 2) changes in surface and subsurface water and their effects on nutrient and energy cycling; 3) the number of sensitive species, both rare and ecologically important species that exist in the area impacted by the road and the demographic status of each sensitive species (including genetic composition); 4) a quantitative assessment of the amount on connectivity that would be caused by habitat fragmentation; and 5) a quantitative, functional assessment of the change in productivity and of the wetlands the road would impact. 2. The project would require the construction of an even longer, major new road to bring heavy machinery to Well site no. E1, yet the EIA contains absolutely no analysis of the ecological and environmental impacts of this new road, which would likely be severe and permanent.

Although building a major, new road for allowing trucks and several thousand metric tons of equipment, including a drilling rig, to Well site A1 would cause severe impacts to the ecological integrity of STNP, build a major, new road to the other well site in SNTP (Well site E1), would cause even greater impacts. The location of Well site E1 is further away from any existing road and building a new road to this site for the purpose of establishing an exploratory drilling well would severely degrade the ecological integrity of the SNTP. Using coordinates for the well locations provided on page 9 of the EIA, below is a Google Earth satellite image showing the location of Well site no. E1.

As can be seen, building any kind of major, new road to Well site no E1 would cause farreaching, permanent consequences on the character of STNP. Curiously, the EIA is silent about any impacts that might occur by constructing a road to Well site no. E1. Page 80 of the EIA states: Drill Site E This site falls within the Sphagnum moss ecosystem which is a part of the Ramsar site which covers a portion of the STNP. It has a very low drilling priority and is very challenging to reach by land. The site lies about halfway between the Temash and Sarstoon Rivers and about 1.75km from the coast. Page 149 of the EIA states: Although there are two potential drill sites within the park this assessment only considers access issues for Drill Site A, since drill Site E is of a very low drilling priority. Yet, page 7 of the EIA states: US Capital Energy has identified five (5) sites with high potential for petroleum deposits. Of these sites, two (2) falls within the STNP while the other three (3) are located in adjacent areas (see Figure 1.3. The company now wants to confirm these deposits through exploratory drilling. This is an essential part of the whole cycle of petroleum exploration and production and is vital to confirm petroleum deposits in underground reservoirs (see Table 1.2). The locations of these wells are listed in Table 1.1 below with the coordinates being in UTM, NAD 1927 zone 16 [which includes Site E]. The key questions are: Does this EIA include Site E1 or not? Would approval of the EIA give U.S. Capital Energy permission to establish an exploratory well at Site E1 even though the EIA provides no assessment of the environmental impacts of doing so? Obviously, the answer to both questions must be no. 3. The EIA does not provide any details about the location of drilling wells for the reinjection of wastes (spent drilling muds and cuttings) or any discussion about the impacts of drilling these wells

In numerous instances, the EIA claims that it would use reinjection into wells as a means of disposing of potentially harmful wastes that the project would generate, including spent drilling muds and drill cuttings. Pages 116-117 of the EIA state: Excess and used water based mud (WBM) will be re-used/reinjected or diluted to meet appropriate discharge standard before disposal. - Used pseudo oil based mud (POBM) will be re-used in the drilling of other wells and spent POBM will be re-injected in dedicated approved disposal wells or incinerated at an approved site (as long as cuttings are below 10% by volume).

Top-hole cuttings drilled with WBM will be fluidised and re-injected in dedicated approved re-injection wells. - Bottom hole cuttings drilled with POBM and contaminated with POBM will be re-injected in dedicated approved re-injection wells. The problem is, there are no existing reinjection wells in the vicinity of the proposed exploratory wells, and there will not be any such wells at the time exploratory wells are generating wastes that require reinjection. This leaves decision-makers with only two choices: 1) require US Capital Energy to assess the environmental impacts of drilling the reinjection wells it proposes to use; or 2) require US Capital Energy to assess the environmental impacts of disposing of spent drilling muds and drill cuttings on land, since without reinjection wells, that would be the only other available alternative. 4. The EIA does include an oil spill analysis Despite taking all necessary precautions, exploratory oil wells can blow out, releasing large quantities of oil that can cause huge environmental devastation. People should remember that the Gulf of Mexico oil spill of 2010, one of the largest oil spills in history, resulted from an explosion and blowout of an exploratory well in the Macondo prospect. It should be obvious that any blowout and subsequent oil spill would cause long-lasting damage to the ecological integrity of STNP. Therefore, the consequences of such a spill need to be assessed. According to the World Bank/IFC Environmental, Health, and Safety Guidelines for Onshore Oil and Gas Development (http://www1.ifc.org/wps/wcm/connect/4504dd0048855253ab44fb6a6515bb18/Final%2B%2BOnshore%2BOil%2Band%2BGas%2BDevelopment.pdf?MOD=AJPERES&id=132315317 2270) Spills from onshore facilities, including pipelines, can occur due to leaks, equipment failure, accidents, and human error or as a result of third party interference A Spill Response Plan should be prepared, and the capability to implement the plan should be in place. The Spill Response Plan should address potential oil, chemical, and fuel spills from facilities, transport vehicles, loading and unloading operations, and pipeline ruptures. The plan should include: A description of the operations, site conditions, logistic support and oil properties; Identification of persons responsible for managing spill response efforts, including their authority, roles and contact details; Documentation of cooperative measures with government agencies as appropriate; Spill risk assessment, defining expected frequency and size of spills from different potential release sources;

 Oil spill trajectory in potentially affected surface water bodies, with oil fate and environmental impact prediction for a number of credible most-probable spill simulations (including a worst case scenario, such as blowout from an oil well) using an adequate and internationally recognized computer model; Clear demarcation of spill severity, according to the size of the spill using a clearly defined Tier I, Tier II and Tier III approach; Strategies and equipment for managing Tier I spills at a minimum; Arrangements and procedures to mobilize external resources for responding to larger spills and strategies for deployment; Full list, description, location, and use of on-site and off-site response equipment and the response time estimates for deploying equipment; Sensitivity mapping of the environment at risk. Information should include: soil types; groundwater and surface water resources; sensitive ecological and protected areas; agricultural land; residential, industrial, recreational, cultural, and landscape features of significance; seasonal aspects for relevant features, and oil spill response types to be deployed; Identification of response priorities, with input from potentially affected or concerned parties; Clean up strategies and handling instructions for recovered oil, chemicals, fuels or other recovered contaminated materials, including their transportation, temporary storage, and treatment / disposal. Instead of this critical information, including an environmental impact prediction for a number of credible most-probable spill simulations (including a worst case scenario, such as blowout from an oil well) using an adequate and internationally recognized computer model, the EIA provides us only with this, on pages 216-217: 15.4 Evaluation and Response Measures in the event of a Major Oil Spill As soon as the source of a spill is determined, an estimation of the crude volume spilled must be made. In addition, the coverage of the spill and the level of environmental sensitivity of the area must be determined. The existing climatic and environmental conditions in the area must also be considered when evaluating the accident in order to mount an effective management and control response to the spill. Based on information gathered, a projection of the stains behavior will be formulated to assess the risks of impact on additional areas. At the same time, a program of management and control actions will be put together to control the spill. It will also be necessary to evaluate the risk of fire occurrence and any possible need for evacuation. Table 15.1 outlines the measures that will be implemented during the evaluation of a spill.

This is the wrong order of things. If this EIA is approved, then US Capital Energy might have the necessary authority to proceed with establishing exploratory oil wells in STNP without ever informing the public in a meaningful way (that is, in a way that would allow the public to voice objections) on the consequences of an oil spill. The blowout from an Exploratory well cannot be ruled out as a potential environmental impact. In 1998 in Vernon Parish, Louisiana, one of Sonat Goins Exploratory wells blew out in a riparian/bottomland hardwood wetland, releasing a pressurized spray of oil, brine, drilling mud and tailings, and natural gas to the drilling pad and surrounding areas effecting approximately 58 acres. United States. Louisiana Oil Spill Coordinators Office/Office of the Governor (October, 2005) Environmental Assessment: Sonat Goins Oil Spill. http://www.losco.state.la.us/tempnews/Sonat_Draft_DARP_Final_100705.pdf [Sonat Goins Oil Spill. 2005]. The 58-acre exploratory well blowout had the following negative impacts on the surrounding wetland and wildlife species: mortality of all vegetation and hardwood trees in wetlands and pinewood forests, subsequent loss of habitat to bird and amphibian species, soil degradation and oil seepage/leakage into soil horizons, contamination of surface water and 75100% loss of ecological services (Sonat Goins Oil Spill. 2005). The resulting losses devastating the surrounding ecosystems in Louisiana are indicators of the possible environmental impacts of the proposed installation of exploratory wells in Sarstoon Temash National Park (STNP) and must be included and considered in the evaluation of the EIA. One of the most significant findings from the Louisiana well blowout is in the table below, illustrating that 75-100% of all ecological services were lost and it took an estimated average of 49 years for all of the contaminated sites to recover (Sonat Oil Spills. 2005: Table 4-1). We can draw comparisons from the Louisiana report to potential environmental impacts associated with the proposed well sites in Sarstoon Temash National Park because both are exploratory well sites and have the soil and hydrologic characteristics of wetlands. Another similarity between the two cases is that the tree species found at both sites are evergreen, indicating that the stress induced by the oil spill in Louisiana could have similar affects on the evergreen forests in Sarstoon Temash National Park. Nowhere in the U.S. Capital Energy EIA does it discuss the possible impacts or effects a spill, similar to the one in Louisiana, would have on the surrounding ecosystems. The main difference between the two cases is that the project area in Belize has unique ecosystems that are endemic to the site area and are extremely sensitive to environmental changes. According to page 66 of the EIA. The site has eleven (11) major natural ecosystems, [] 7 of which, due to their limited geographical coverage, are sensitive to any disruption in their ecosystems which may produce abrupt changes e.g. pollutants, interference with the water regime particularly drainage etc. [] It appears that the extremely wet conditions in the park and the high acidity of the soils have combined to produce a unique set of growing conditions and have supported ecosystems not represented elsewhere in Belize.

This means that if a spill were to occur or contaminates leached into the soil, there would be very few sites for the soil to sequester and recycle these nutrients, making the surrounding flora and fauna extremely susceptible to degradation and contamination. Due to the highly sensitive ecosystems located in Sarstoon Temash National Park and the results from the Louisiana Exploratory well blowout it is essential that a thorough investigation into the potential hazards and ecosystem impacts of a possible well blowout be assessed. 5. The EIA contains no information about the disposal of field waste. The project would generate a large amount of field waste: tons of vegetation that would be uprooted for constructing roads and well pad sites. Construction of the new, major road to Well site A1 would alone result if field waste from clearing nearly 9 hectares of dense vegetation. Despite this, the EIA contains only the following statement about the disposal of field waste. 6.3.1 Domestic and Field Waste I. Waste Category I - Field Waste

It is difficult to predict how much field waste will be produced during the drilling phase. During the construction of the roads, vegetation will have to be removed from the right of way. Typically roads will have to be cleared 15m wide to allow large trucks which will be bringing in supplies and the drilling rig. In addition to this, the drill site itself will have to be cleared of vegetation. Stakeholders and decision-makers in Belize deserve to know what US Capital Energy plans to do with this field waste, lest the waste be slashed and burned, causing severe pollution and raising the risk of a major, area-wide fire. 6. The EIA contains no information about financial assurances U.S. Capital Energy would provide the Government of Belize to ensure compliance with Belizean environmental requirements, including complete and timely plugging of the well(s), reclamation of the lease area(s), and the restoration of any lands or surface waters adversely affected by lease operations after the abandonment or cessation of oil and gas operations As should be expected, the proposed project includes a decommissioning and abandonment phase. Section 14 of the EIA contains the following details: After the drilling facilities have performed their useful function they will be decommissioned and removed from the site. Other facilities associated with the project will be prepared for abandonment in a socially and environmentally responsible manner at the end of the planned life of the project. The drilling facility and exploratory well is designed for a useful life of approximately twenty years. On final clearing of the site of all demolished facilities and decommissioned services there will be a complete survey of the site for contamination. All materials that could

subsequently prove hazardous to the restoration of the site will be properly treated. All contaminated materials will be disposed of in a safe manner approved by the DoE. Thereafter the site will be restored to meet environmental requirements of the DoE and Forest Department (the PA management body). It may be that the Forest Department and its Conservation Partners will want some of the installed works (e.g. access roads) left in situ for its own future management interventions. However if the intention is to fully rehabilitate the site, actions will be taken such as harrowing of the access roads to promote natural revegetation and the rerouting of drainage to pre-project status. Any civil structures made of concrete shall be broken up and disposed of at approved sites. Gravel sites within the drilling compound shall be scarified and prepared for revegetation. Any polluted or contaminated soil will be treated in-situ or removed from site and treated/disposed of safely. The option of liming to reduce acidity and biological treatment using Petroleum Decreasing Bacteria (PDB) shall be explored. On full restoration the site shall be handed over to the Belize Forest Department accompanied by a signed letter or certificate from the developer attesting to the works undertaken for site remediation. A key question that needs to be answered before the project is approved is who will pay for all of these necessary decommissioning, abandonment and restoration activities? US Capital Energy is not a major oil company, such as ExxonMobil, British Petroleum or Shell. According to its website (http://www.uscapitalenergy.com/) US Capital Energy with relatively minor projects in Guatemala and four U.S. States (Florida, Colorado, Montana and North Dakota). It is unclear if any of these projects are generating revenue for the company. If US Capital Energys proposed activities do not generate revenue, then there is a high risk that the company would lack the funds to complete the decommissioning, abandonment and restoration activities that it has described in the EIA. In such case, the burden would fall the government (and taxpayers) of Belize. Regulations enacted by the U.S. Department of Interior state (at 43 CFR section 3104.1: (a) Prior to the commencement of surface disturbing activities related to drilling operations, the lessee, operating rights owner (sublessee), or operator shall submit a surety or a personal bond, conditioned upon compliance with all of the terms and conditions of the entire leasehold(s) covered by the bond, as described in this subpart. The bond amounts shall be not less than the minimum amounts described in this subpart in order to ensure compliance with the act, including complete and timely plugging of the well(s), reclamation of the lease area(s), and the restoration of any lands or surface waters adversely affected by lease operations after the abandonment or cessation of oil and gas operations on the lease(s) in accordance with, but not limited to, the standards and requirements set forth in 3162.3 and 3162.5 of this title and orders issued by the authorized officer.

The kind of sureties US Capital Energy should provide the Government of Belize to undertake decommissioning, abandonment and restoration activities must be a subject the EIA discusses.