On January 29th when ExxonMobil in the barest of press releases announced that it was experiencing renewed problems with the compressor on the Liza-1 offshore platform and that gas flaring would have to be resumed above pilot levels, questions immediately arose as to what the regulatory authorities should do.
Should they insist that the increased flaring of noxious gases not be allowed to rise above pilot levels even if it meant severely cutting back production levels? Or perhaps even shut down the operations until the problem was rectified? The proximate authorities in this matter were the Minister of Natural Resources, Vickram Bharrat and the Environmental Protection Agency (EPA). To date, the EPA has kept a stony silence on this matter. One wonders if it is functioning and if this is the level of oversight the PPP/C government was expecting when it fired its former proactive Head, Dr Vincent Adams.
Members of the public who have paid keen interest to ExxonMobil’s operations would have been aware that last year the US oil major flared massive amounts of gas while pleading compressor problems. Why would a huge enterprise like Exxon – though it registered a stinging fourth quarter loss of US$20.1b last year – not have it within its capacity to have properly functioning equipment or a replacement at hand? Hopefully the laxity isn’t due to ExxonMobil’s belief that the regulatory authorities here and the government will go soft on its transgressions though it has to be said that both the oil company and the government are clearly driven by one goal – extract as much oil as rapidly as possible and monetise it.
This predilection of the PPP/C government perhaps explains the shocking misinformation which government officials have peddled about the current gas flaring and what ExxonMobil was permitted to do. First up was Vice President Bharrat Jagdeo. At a press conference on February 9th, he asserted that while the flaring was unacceptable, an upper limit had been catered for in the Environmental Impact Assessment (EIA) done for the Liza-1 well and therefore this government’s hands were tied.
Mr Jagdeo said “Exxon is flaring, using about 16 million to 18 million cubic feet of gas per day. The EPA has worked this out and has said that is about 1.3 kilotonnes of carbon emitted. Most people didn’t understand [that] Exxon submitted an Environmental Impact Assessment for the project”.
He added: “The document was, from what I gather, made public by the EPA that the EIA, which was approved by the EPA at that time and referred to by the Minister in the licence, Exxon was given an allowance to flare or to use 14 billion cu ft of gas. Fourteen Billion! Right now, they have flared 12.5 billion cu ft. At the current rate of flaring, by the end of April, they would have flared the entire 14 billion cu ft”.
Now this was complete misinformation coming from the Vice President. He of all people should have known that the EIA merely sets out what the impacts and risks are to inform a final decision on whether the project should go ahead. Taking cognisance of the EIA, the terms that govern an approved project are then enshrined in the environmental permit. Nowhere in the environmental permit for Liza-1 was there any licence for ExxonMobil to flare a maximum of 14 billion cubic feet of gas over 18 months. This was pointed out by Stabroek News in its reportage on Mr Jagdeo’s press conference but yet the government persisted.
Despite information to the contrary from the sacked former Head of the EPA, Dr Adams, the Minister of Natural Resources proceeded with the same line at Parliament. When asked by Stabroek News for evidence of the 14 billion cubic feet figure in the environmental permit, Mr Bharrat said: “That was an agreement between the last government and Exxon”.
Pressed on where in the permit it was stated, Mr Bharrat replied “They published it you know. You didn’t see it?” He then advised the reporter to contact either of two officers at his ministry for confirmation.
The ministry has since acknowledged that the supposed flaring figure is not present in the permit. “It is not in the permit. There may have been some misunderstanding or miscommunication but it isn’t in the permit…,” Ministry of Natural Resources Public Relations Officer Stephon Gabriel later told Stabroek News.
It must be noted that ExxonMobil itself disavowed the figure in an engagement with the media last week even while claiming that it is in full compliance with the terms of the environmental permit. There is very little public trust in how the former APNU+AFC government and the present administration have thus far handled the oil and gas sector – the abominable 2016 Production Sharing Agreement being the principal concern. This mistrust will be deepened by the misinformation presented by Messrs Jagdeo and Bharrat and solidify the view that ExxonMobil can do as it pleases and that regulatory control doesn’t exist.
It behoves President Ali to ensure that his government isn’t seen as a purveyor of misinformation on the oil and gas sector – particularly where it impinges on environmental and safety issues. As the person with line responsibility for the sector, President Ali must ensure that the EPA holds ExxonMobil fully accountable for breaches of its environmental permit.
A careful examination must now be done of ExxonMobil’s flaring post- January 29 and penalties applied where applicable bearing in mind that flaring should have been at pilot level at all times during routine operations. We also reiterate that the government should seek its own advice on Exxon’s compressor problems and related matters.
