As ExxonMobil yesterday continued to play up its Guyana investments at its virtual Annual Meeting of shareholders, global environmental and human rights organisation, the Center for International Environmental Law (CIEL) called on the company to heed environmental pollution warnings and immediately stop flaring gas here.
Guyanese, according to CIEL, should press for a pausing of works offshore and let ExxonMobil first answer “fundamental questions about its commitment to the environment in the country,” while assessing its capacity to monitor the works offshore.
“Flaring of 9 billion cubic feet of natural gas is more Co2 emissions than what the whole of Guyana would have used in three months – the entire country,” President of CIEL, Carroll Muffett, told the Stabroek News via phone from the United States yesterday.
“This speaks to the [lack of] seriousness with which this company is treating its obligations. You see, this is a company that has a record of flaring worldwide and Exxon’s explanation warrants some deeper enquiry. We are six months into production and you hear that a piece of equipment that should have been in place before testing malfunctioned? What if this was a leak? What is Guyana’s capacity to monitor what is happening? Fundamental questions need to be asked…,” he added.
ExxonMobil did not respond to the Stabroek News’ questions on the issue.
The Sunday Stabroek reported in a May 17 article that glitches occurring during production startup last December saw the flaring of over 2 billion cubic feet of natural gas, ExxonMobil had assured the Environmental Protection Agency (EPA) that it would have from last week, begun transitioning to using the gas for well injection purposes.
Director of the EPA Dr Vincent Adams had last week said that his agency would check the exact figures and he later revealed that the amount of natural gas flared up to that day was a whopping figure – over nine billion cubic feet.
Muffett, who has done extensive investigations into the work of Exxon and other companies worldwide, said that the volume of natural gas flared puts Guyana among the top ten gas-flaring countries in the world – even though first oil was produced from Guyana’s waters merely six months ago.
And on the day of a shareholders’ meeting, where the company boasted of its lucrative Guyana operations, CIEL issued a press release calling on the company to cease flaring activities here.
“As ExxonMobil holds its 2020 Annual Meeting of Shareholders today, the Center for International Environmental Law (CIEL) calls on the company to stop flaring gas offshore in Guyana, the site of its biggest oil development outside the U.S. Permian Basin. The flaring, which far exceeds levels authorized by the Guyanese government, releases greenhouse gases and toxins, threatening the global climate, the local environment, and public health,” the statement said.
Referring to views expressed by CIEL’s Director of Climate and Energy Program, Nikki Reisch, the organisation said that Exxon has neither been forthcoming with information about the flaring nor taken adequate measures to prevent this harmful and unnecessary practice in the first place.
The center said that the company initially downplayed the flaring that has occurred since it started production in Guyana last December and it was only after passing coast guard and air pilots spotted huge flames did the company admit to flaring significant quantities of gas.
Bodes poorly
“Exxon claims the flaring was temporary and exceptional, due to failures of equipment designed to re-inject the gas into the ground… if so, that bodes poorly for the company’s capacity or willingness to mitigate other foreseeable environmental impacts, not to mention any potential disasters that could accompany deepwater operations,” Reisch contended.
Echoing the position of its President, the organisation stated that the magnitude and duration of the flaring suggests more than a one-time, technical glitch and if used to gauge future activities offshore, it could be catastrophic.
“The Guyanese people were sold the myth of endless revenue from oil and gas sales,” concluded Reisch. “With oil prices plummeting and gas so worthless that Exxon would rather burn it than capture and sell it, Guyana’s people deserve to ask whether the false promise of oil wealth will be enough to outweigh the mounting costs of climate reality.”
And making reference to the company’s shareholders’ split decision to not separate the roles of its chairman and CEO, Moffett said in so doing it would have yielded more transparent processes
“Shareholder engagement groups who had committed to environmental protection sought a new decision at the AGM that would have separated key leadership functions at Exxon with the goal of making it more transparent in dealing with climate issues,” he explained.
He said but “yet again” Exxon’s lobby for the positions to remain “despite a really strong push from engaged shareholders” went through and it was evidence of a company that had scant regard for environmental issues.
Guyana’s flaring, Moffett contended, was yet more evidence of a company that had little regard for the environment and why it chooses to keep its organizational structure as is.
“I have not seen any credible evidence that this company acts with any serious concern about its environmental impact. And when you consider the scale and diversify of those impacts, the evidence that Exxon is willing to continue to do business as usual, regardless of the environmental and human interest’s consequences, is overwhelming. This flaring is more evidence to this effect,” he stressed.
Independent chair
At yesterday’s shareholders’ meeting, Liz Gordon, representative for the New York State Common Retirement Fund, urged the Board of Directors to require an independent chair of the board for the next CEO transition.
“Exxon is a laggard in addressing climate risks. Our company has no enterprise-wide targets for greenhouse gas emissions reduction from its own operations, does not even disclose the greenhouse gas emissions associated with the use of its products, much less articulate any ambition to reduce those emissions and invest to grow its hydrocarbons production at a rate that is clearly inconsistent with the goals of the Paris Agreement. By contrast, peers such as BP & Shell have disclosed detailed plans for managing the low carbon transition that were developed in response to engagement with their investors,” she declared.
“These plans include setting greenhouse gas reduction targets for their products and committing to become net zero emissions businesses by 2050. Significantly, the boards of these companies have an independent chair. It is crystal clear to us that ExxonMobil’s inadequate response to climate change constitutes a broad failure of corporate governance, and a specific failure of independent directors to oversee management. We have no doubt that an independent chair would mean an ExxonMobil that is better equipped to address significant business risks, engage more effectively with its shareholders and post better financial performance. Thus, we urge our fellow Exxon shareholders to vote for item four on the proxy,” she added.
But CEO Darren Woods rejected the proposal saying that the company recognizes the importance of addressing the risk of climate change, and is focusing its efforts on developing technologies that close the gaps in the existing solution set.
“As the world’s going to realize the ambitions of the Paris Agreement, new options are needed and the more organizations working on them the higher the chance for success. We’re also committed to managing our operational emissions to produce some cleaner, more-advanced products and to engaging in climate policy discussions,” he said.
“The board believes our current structure provides the greatest benefits and importantly, preserves the board’s flexibility to determine the appropriate leadership and oversight structure. Therefore, the board recommends shareholders vote against this proposal,” he added.
Woods used the latest 10 of the 16 discoveries here as evidence that the company was working at more technologically advanced means of operating and thus lowering emissions globally.
“For energy-intensive industrial processes, we’re looking at new materials and manufacturing processes that we do see use of energy and thus lower emissions. We have teams collaborating with leading universities, industry partners and government agencies around the world to advance technologies across each of these sectors. This is not a new approach for us. We have a long history of researching and developing new technologies that help meet the pressing needs of society. Of course, developments in technology also play a critical role in the long-term success of our ongoing business. In fact, it is one of our key competitive advantages,” he said.
Seismic inversion
“A recent example is our proprietary full-wave seismic inversion technology, which helps identify hydrocarbon reservoirs. Last year, this enabled us to have four of the top 10 exploration discoveries in the world and five out of the six largest oil discoveries. In offshore Guyana, this technology helped us achieve four giant discoveries in 2019, and increased our drilling success rate there to 89%, well above the industry average.
The results speak for themselves. The estimated recoverable resource offshore Guyana has now increased to more than 8 billion barrels, about two and half times what we estimated just two years ago,” he added.
Guyana continues to take the spotlight as ExxonMobil’s CEO boasted of developments here, notwithstanding the current COVID-19 environment and its effects globally.
“We achieved the first oil offshore Guyana ahead of schedule and below budget, and grew the resource potential. Our investments in Guyana remain a key priority for the company. While we’ve attempted to maintain the pace of development, the ongoing election process and uncertainty around Guyana’s next administration has slowed government approval and progress.” Woods said.
