Almost immediately after it entered office in May, 2015 the APNU+AFC government was the beneficiary of the mind-boggling announcements about the vast reserves of oil that had been discovered by ExxonMobil and its affiliates in the offshore Stabroek Block. It was as if Guyana – and by extension its government – had literally won one of those New York Powerball draws with the oodles of zeroes in the winnings and with multipliers to the nth degree. The unfortunate thing about those windfalls is they can cultivate profligacy, the easy-come, easy-go attitude and rank dereliction of duty.
Some of these characteristics have been well-evident in the behaviour of this government and the utterances of its senior functionaries in relation to the oil and gas sector. The standout moment would be the reckless negotiation by the government of the 2016 Production Sharing Agreement (PSA) with ExxonMobil when it didn’t have the expertise to match wits with the oil major across the table and which occurrence will forever lead to questions about the reasons behind the gross asymmetry between the two sides and whether President Granger showed any leadership at all. That PSA has arguably in one fell swoop ceded billions of US$ to ExxonMobil and its partners leaving the country and its people to “content” themselves with what has been assigned to them.
The gross irresponsibility of the APNU+AFC government was also seen in its dithering with multiple pieces of legislation for the regulation of the oil and gas sector and which with the expected dissolution of Parliament today means that it could be nearly a year in total from May 2019 before any legislation is presented for approval by legislators. An utter disgrace.
For as long as Guyanese have been aware of the offshore oil bonanza, there have been pointed queries to the government about the quantum of insurance that would be activated were there to be a spill of any sort offshore. As a self-insurer and after concerns were raised here, Exxon was convinced to take out a policy with a local insurer though it is unclear what would happen if that ceiling was surpassed in a major incident. The ability of the Guyana Government to respond to any spill or pollution from the major works going on offshore was also raised and no satisfaction has been given in relation to this and there is no evident capacity to respond even though Exxon and its partners are now already extracting thousands of barrels of oil on a daily basis from the Liza-1 well.
The risks and dangers offshore were crystallised last week after Stabroek News reported that a breakdown or neglect of Standard Operating Procedure by the Spanish oil company, Repsol’s contractor had resulted in a mud spill offshore. This newspaper was told that as the United Kingdom-headquartered Volaris Drilling company was carrying out operations in the Kanuku Block, a valve was left open which saw mud used to prevent well blowouts spilling into the ocean.
The Head of the Environmental Protection Agency (EPA), Dr Vincent Adams was incensed at the occurrence. He told Stabroek News “It is not the issue of mud. The systematic breakdown had the potential of a major disaster. It could have been something other than mud. This here was a breakdown in the systematic process in the conduct of operations to ensure the protection of environment, health and safety”.
There has been no statement from the Department of Energy (DE) – presumably the regulatory body for oil and gas – since the reportage of the spill. Neither has there been a word from the Spanish oil company. All of that speaks to a disposition of indifference and arrogance by both the oil company and the DE.
Further irking Dr Adams was the paltry sum of $1,000,066 that could be levied against Repsol as a fine precisely because there had been no updating by this government of the fines enshrined in legislation and the regulations to be promulgated.
“I will also seek to see that infractions like these, although it doesn’t have an environmental impact, that the fines be heavier because we must ask what if it wasn’t mud. One million and sixty six thousand is no money”, Dr Adams said.
He also made a case again for a 24/7 presence by the EPA on offshore operations.
“This (breakdown of standard operating procedure) will not be tolerated and it’s why I keep hitting more publicly about 24/7 oversight. Incidents like these makes it easier to realize why it is necessary for us to build up our capacity for continuous oversight… I cannot say enough (that) the consequences could have been much more disastrous”, Dr Adams said.
So there you have it. The government has and continues to bend over backwards to be solicitous to the needs of ExxonMobil and other oil companies such as Repsol while leaving key agencies such as the EPA bereft of the capacity that is urgently needed to police their obligations as guardians of the environment. It is a shame that the 2020 general elections will arrive without the necessary legislative bulwark in place. Ad interim, the government must take immediate steps to expand the footprint of the EPA offshore. The Contingency Fund and other provisions are no doubt available for the hiring of personnel and the purchase of equipment. As Dr Adams and others have pointed out a failure offshore can be much graver than the spillage of mud. It is not a risk that this country and its caretaker government can take lightly.
