Dear Editor,
I am following up my May 15, letter on the Modified Environmental Permit (MEP) on the Liza Phase One Developmental Project issued on June 1, 2017 and modified on May 12, 2021. There is enough evidence in the MEP, signed by the acting Head of the Environmental Protec-tion Agency (EPA) and the Guyana Exxon subsidiary, to suggest that it did not have sufficient legal involvement, a situation which could come back to haunt Guyana.
Instead of mandatory obligations, the MEP, on critical matters, allows Exxon considerable latitude and that they should rather than shall carry out certain requirements. For example, on blowout procedures, the MEP requires undefined general compliance with international standards; a certain type of FPSO vessel is preferred, whenever available; vessel anchoring procedures need only minimize dragging on the seabed where practicable; low toxicity chemicals be used, where practical; quantities of hazardous materials stored in offshore facilities be limited to the extent possible; and efforts should be made to prevent equipment breakdowns which could result in flaring. The consequence of the absence of strict provisions is dramatically evident in the saga of the repeated malfunctioning of the gas compressor. All that is required of the oil companies under the Environmental Permit, even as modified, is that they make efforts to prevent such a possibility.
On a more general note, the MEP holds the oil companies strictly liable for loss or damage to the environment through any “act caused intentionally or recklessly”, which will be hard to prove. Significantly, such liability applies only to acts and the EPA or the Government would be hard put to regard as an act, an omission to do something that might be preferred or practical.
Now to the issue of flaring. Here, the rule in the MEP is that flaring or venting is strictly prohibited, except when it is permitted. An immediate exception to this strict prohibition is “tank flashing emission, standing/ working/breathing losses, [and] low pressure streams”. The MEP identifies the following additional events in which flaring is permitted:
Commissioning, with no specific time or flaring volume limitation.
Start-up during which flaring is permitted for up to 60 days but without a volume limitation.
Special Circumstances of which there are three: (i) Emergencies arising from any unavoidable, expected event requiring flaring, including weather; Safety Response to maintain the safety of the flaring system and pilot flame. (ii) Inspections, planned and unplanned maintenance, etc.; and (iii) Re-start, defined as the “instance of resumption of oil production following a shutdown event”.
Condition 3.6.1 of the MEP provides that where any of the Special Circumstances conditions are expected to exceed fourteen calendar days, the Permit Holder must seek the Approval of the EPA within the first forty-eight hours of the commencement of flaring. The application must be supported by a number of documents and the EPA can request further and additional information. What happens in the interval is anyone’s guess. On being satisfied, the EPA can allow flaring for up to 6o days, subject to further extensions and any conditions the EPA deems appropriate.
The MEP provides that the company will “pay US$30 per tonne of carbon dioxide equivalents (C02e) emitted as a result of flaring in excess of the periods of flaring expressly stipulated at 3.6(ii) and 3.6.1” of the MEP. These deal respectively with Start-up and Special Circumstances. Former EPA Head Vincent Adams has interpreted the payment arrangement to mean that the Operator can flare any quantity of harmful chemical for up to sixty days without any cost, a latitude which is subject to further extensions.
What adds to concerns about the MEP is the EPA’s new assertion in its Press Release on the announcement of the MEP that the company (sic) was projected to flare more than 14 billion standard cubic feet (BSCF) of gas up to May 13, 2021. This just happens to be the date following the MEP. If we are to assume that flaring took place evenly over the 511 days since production began, the daily rate of flaring is over 27 million SCF! Multiply this by the permissible sixty days allowance and we have 1.6 BCF.
Unfortunately, the determination of the full impact of the flaring on global warming cannot be ascertained without a knowledge of the chemical composition of the gas flared. Frighteningly, if the same generosity and recklessness are extended to future projects, by the latter part of this decade, the existing levels of flaring will be ten times what it is now.
In terms of reporting, the EPA is relying entirely on Exxon as the operator and will have no presence or equipment at the offshore location to verify any information it receives after the event. The MEP contains no provision for any post-audit of the flaring activities and Exxon as the operator needs only to maintain records for three years.
Regardless of how it is packaged or spun, exploration in the petroleum sector under successive administrations is designed to serve the interest of the oil companies. The consequence for Guyana is the raping of our natural resources, the accompanying destruction of our pristine environment and the reputation of Guyana as a responsible petroleum producing country.
Sincerely,
Christopher Ram
