Dear Editor,
Wow! What a difference it makes when you get caught with your pants down! Information that the Environmental Protection Agency (EPA) up until now, has been hiding and kept rebuffing as “misinformation”, is now coming out of the woodwork. Nevertheless Editor, I am more than thrilled that we may have finally figured out what it takes to get the EPA to come clean, bringing to light the people’s information that they have been hiding and denying.
I am happy that the EPA now confesses to having a pathetic US$600 million insurance, when for two years, they have ignored questions as to whether or not they have any; but can see why they would be scared to face up to that embarrassing amount. I am also happy that they are now confessing that negotiations were indeed ongoing between Exxon and the EPA on a Parent Company guarantee over and above the insurance amount, when for two years they were denying it took place. They pretended not to know anything about the Bank of Guyana’s (BoG) involvement in bringing the insurance to Guyana, until the recent revelations by the BoG and the Insurance Association of Guyana, and the exposure of a December 15, 2022 letter from the EPA to EEPGL identifying a Tripartite Agreement with the BoG. Nonetheless, we are still waiting on their confession concerning their covering up of Exxon’s flaring by falsely declaring that the EIA allowed for a flaring cap of 14 billion cubic feet of gas, only to be thrown under the bus by Exxon’s plea of no such knowledge. The bottom line is that the EPA is only now being forced to do some serious somersaulting after getting tangled up in its own web, but I hope that this is a sign of the re-birth of transparency which has been dead for two years now.
Editor, let’s now get to the substance beyond the smoke that the EPA is blowing. First, it was rather slick that they would divulge that the Liza 1 Permit did not have any insurance coverage whatsoever; yet, no mention that it was current Executive Director, Mr. Parsram, who signed that Permit 16 months before I took over. They also tried to dance around the fact that it was because of my recognition of this serious neglect why I stood up to Exxon against enormous push-back and added inclusion of unlimited/full liability coverage into the Liza 2 Permit – the exact language which they have copied into the Payara, Yellowtail, and revised Liza 1 Permits, but now spinning that they clarified my language. I challenge the EPA to show their clarifying difference, but in the meantime, here is the language in the Liza 2 Permit of which I speak, for all to see and judge for themselves:
Section 12.1 states “The Permit Holder shall have insurance”
Section 12.4: “The EPA shall review insurance policy…review is subject to Provision of the amount of cover; supplementary to cover gaps in the primary cover; notification to EPA of modification, cancellation, expiration, intent to renew, renewal or non-renewal and expiry dates of the policy; reports on whether the insurance policy is maintained or renewed for EPA to determine if it is acceptable or if it requires a replacement policy; the final insurance policy or certificate of insurance; and evidence of payment of premium”.
Section 12.5 states “Permit Holder must provide from the Parent Company or affiliate companies…one or more legally binding agreements to the EPA, undertaking to provide adequate financial resources to pay….their respective obligations if EEPGL fails to do so.”
Section 12.6 states The Permit Holder…..shall be strictly liable for any discharge or release of pollution, contaminant in any amounts.
What the above undoubtedly states and signed off by Mr. Henson of Exxon, are the unambiguous requirements for insurance by EEPGL, plus a written guarantee agreement from parent companies Exxon, CNOOC and Hess to cover all costs over and above the insurance value to pay for damages “in any amount…if EEPGL fails to do so”. To any normal thinking person, “in any amount” would mean unlimited amount; and therefore, insurance plus parent company guarantee to cover “any amount” over the insurance value, would add up to unlimited/full coverage. By the way EPA, that unlimited guarantee above the insurance does not cost Exxon a single penny, since it’s only a guarantee. The EPA must therefore explain to the people of Guyana why they are allowing Exxon to renege on signing an unlimited guarantee
agreement already enshrined in the Permit as shown above, to replace it with a meagre total coverage of $2.6 Billion USD ($2 Billion parent company guarantee + $600 Million in insurance).
I wish to bring to the attention of the EPA that the cost of the Macondo spill in the Gulf of Mexico has exceeded $70 Billion USD. This means that the EPA is accepting that if there occurs a Macondo size spill, Guyana would be left holding the bag to cover the remaining $68 Billion which is about 34 times our entire national budget, not to mention the long-lasting devastation and even bankruptcies of economies throughout the Caribbean. Even a spill as little as one-tenth the size of the Macondo, would cost three times the total $2.6 Billion Exxon’s coverage that the EPA is so giddy about, and over three times Guyana’s entire national budget. It is therefore a most heinous act against not only the people of Guyana, but also against our Caribbean and South American neighbours, for the EPA to now be stooping to Exxon in cutting back the unlimited/full liability protection (in the Permit as shown above), down to their proposed cap of only $2.6 Billion USD.
Additionally, the EPA is obligated to the citizens of Guyana, for whom they work, to answer the question which they have been shunning, as to why the Liza 2 was allowed to start-up and Liza 1 Permit renewed, without Exxon meeting these requirements in the Permits.
Lastly, since the EPA now appears to be trying to make amends by starting to be transparent, it could start to prove itself by providing to the citizens of Guyana, at least monthly: the amount of oil produced; the amounts of water produced, sea water injected, and produced water dumped into the sea; and the amounts of gas produced, reinjected and used for other purposes. We look forward to this goodwill gesture of transparency and wish to remind EPA once again, that all of the requested information and data belong to the people of Guyana.
Sincerely,
Dr. Vincent Adams
