Dear Editor,
The amendment to the Liza 1 Project imposing on Esso Exploration and Production Guyana Limited a charge of US$30 per tonne of Carbon Dioxide equivalent (CO2e), through flaring is being hailed as a triumph over the oil companies. A closer examination shows a less rosy story. Flaring is a bad word in environmental circles and this amendment seeks to grant to Esso a licence to flare. In fact, a reading of the Modified Environmental Permit shows that the payment applies only to flaring in excess of timelines for “flaring events”.
Guyanese now wait with baited breath to understand what “excess of timelines for flaring events” really means but clearly there is no longer even an attempt at the prohibition on flaring. It is unclear whether the EPA has the capacity or the equipment to measure the CO2 impact of flaring and even if it did, this measure is imprecise and inadequate. At best, this can only be seen as a first and necessary step, but one undertaken without full statutory teeth. It would also be useful to learn how the amount of US$30 per tonne of CO2e was arrived at. There is no international benchmark: Professor Stern who was prominent in Guyana’s LCDS before the petroleum era, places that figure at US$85/tonne CO2e, while others have put it significantly lower.
But the LCDS is not the only framework that is now being discarded. Article 149J of the Constitution, including many of the Herdmanston Amendments, is either being ignored or set aside in the name of development. Perhaps the philistines need to be reminded that that amendment imposes on the State the duty to, among other things, protect the environment for the benefit of present and future generations; prevent pollution and ecological degradation; promote conservation; and secure sustainable development and use of natural resources while promoting justifiable economic and social development.
There is also the issue of whether the polluter-pays-principle applies to this new measure. There are four levels of cost under section 3 of Annex C to the Petroleum Agreement: those recoverable without Further Approval of the Minister (3.1); those recoverable only with the approval of the Minister (3.2); those which are not recoverable (3.3); and those recoverable subject to the approval of the Minister (3.4). Penalties imposed by the Guyana courts are explicitly not recoverable while those imposed by regulatory agencies such as the EPA may seem to come under section 3.4. If the penalty is so allowed, then Guyana will bear 50% of the US$30 per tonne of Carbon Dioxide equivalent (CO2e). This raises the issue of the stability clause of the Agreement which prohibits the Government from any changes to the Agreement without compensating Exxon for the additional cost. Let us stand up to this arrogant giant.
Sincerely,
Christopher Ram