Insisting that it used global best practices to determine the amounts of the fines catered for in the revised Liza-1 Environmental Permit, the Environmental Protection Agency (EPA) yesterday assured that Guyana will not have to pay a cent of the US$30 per Co2 equivalent fine catered for in the document and said that its current staff is competent enough to calculate the penalties.
“The EPA was guided by the Polluter Pays Principle, which was prescribed by the Environmental Protection Act in 1996, but has served as a universal principle of environmental management even prior to this, and has continuously developed in its interpretation and applicability as a result of national and international jurisprudence, customary law, and international environmental laws and conventions,” the EPA stated yesterday in a release.
The agency also pointed out that while in its role as an environmental regulator, it does “not typically concern itself with the contractual arrangements between the Ministry of Natural Resources and Esso Exploration and Production Guyana Limited (EEPGL), during discussions with the company regarding the modifications, it was indicated that any such payments would not be recoverable against the Government of Guyana.”
The release follows blistering criticism from former EPA Director Dr Vincent Adams who last week told this newspaper that he sees a cunning attempt to immunise flaring of 14 billion cubic ft of gas using the revised permit.
While not naming Adams, the EPA responded that there were several misconceptions and inaccuracies being peddled.
The Agency stated that the modification was pursued in strict accordance with the legislation due to the intermittent periods of flaring conducted by ExxonMobil’s subsidiary EEPGL due to technical issues offshore Guyana.
“Prior to its modification, the Permit prohibited ‘Routine Flaring’; however, process upsets, equipment failures and maintenance events are not considered ‘Routine Flaring’ in the Oil and Gas Industry. Such events were not specifically addressed or regulated in any way by the original Permit. Further, the original permit only required EEPGL to notify the EPA for flaring sustaining a volume of at least 10 MMCFD and lasting at least five (5) days. However, the modified Permit now includes specific timelines for detailed instances of flaring, and notification and approval processes, during which the company must justify its reason(s) for flaring and the EPA reserves the right to reject this request if unjustified,” the EPA explained.
It said that the timelines prescribed by the Modified Permit are consistent with the US Code for Federal Regulations which establishes that flaring may not exceed 48 hours without seeking approval.
Further, it notes that, “international benchmarking shows that the initial start-up period averages approximately 90 days, however, the modified permit specifies a more conservative start-up period of 60 days, below the average international benchmark. This is also consistent with the recently issued Payara Environmental Permit. Any flaring in excess of these timelines requires the company to pay for the emission of Carbon Dioxide equivalent [CO2e] at the rate of US$30 per tonne of CO2e.”
Not only was the EPA guided by the Polluter Pays Principle, it stated, but said that it “utilised carbon pricing benchmarking to determine this payment, so that the monies acquired from the pollution events could be used for Supplemental Environmental Projects [SEP].”
Moreover, the determination of US$30 per tonne of CO2e was a result of rigorous research and is consistent with introductory prices for CO2e implemented by developed countries such as Canada. In determining the volume of CO2e emitted, Condition 3.10 of the modified Permit specifically prescribes multiple methodologies, including but not limited to: American Petroleum Institute’s (API) Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Gas Industry; and Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventory.”
The Agency did not give any insight into its internal capacity for calculating the fines but rejected “all unfounded and baseless remarks about the capabilities of its staff to utilise and apply these methodologies.”
The EPA said that Guyanese can rest assured that no monies will come from taxpayers or the country’s coffers for the fines that will be instituted and that it views the modification, not as creating any additional adverse effects, but “as a means of implementing more specific flare management conditions that are consistent with industry practice in order to regulate and/or deter periods of flaring.”
Putting the public on notice, the EPA said that “some amount of flaring is to be expected for maintenance events, process upsets and equipment failures given the complexities of oil and gas production in the offshore environment.”
“The EPA has pursued modification to ensure that there are environmental safeguards and deterrent mechanisms to address any prolonged periods of flaring which may pose risks to the environment,” the agency declared.
“However, the EPA wishes to assure that it will continue to work assiduously toward national standards which specifically address flaring, and following this modification, the EPA has commenced the process of developing specific flaring targets for the upcoming renewal of the Liza 1 Environmental Permit [June 01, 2022] as well as other upcoming EPEGL projects offshore Guyana,” it added.
Adams had last week told Stabroek News “It’s a shameful capitulation to ExxonMobil’s original justification for flaring, that because Guyana is a carbon sink, we have the capacity to take in more pollutants from flaring”.
“The modified [EPA] permit incredulously allows flaring for 60 days for start-up and 14 days for special circumstances, compared to internationally accepted standards such as the United States standard for example, which only allows 2 days of flaring for start-up. That notwithstanding, ExxonMobil would pay the fine only for the C02eq emitted in excess of these periods of flaring. This means that ExxonMobil would now have a free pass to flare for an additional 60 days – a condition that was not evaluated in the EIA [Environmental Impact Assessment],” he said.
The former EPA head who was abruptly dismissed when the PPP/C took office last year August, said that the permit has also egregiously increased permitted flaring by the EPA and comes also at a time when the oil major has made a commitment to curb flaring by almost 50 % across the rest of the globe.
“This begs the question: Are Guyanese lives of lesser value than those in the rest of the world? It is unbelievable how our Government would choose to so embolden ExxonMobil to do as they please, as they laugh at our laws, while there is no representation afforded our people,” he contended.
But most concerning to Adams was the non-disclosure on which method would be used to calculate the CO2eq since the gas is totally different to the reported amount of gas flared and its calculation could become very complicated given that the application of any of several methods and inclusion of key parameters, such as Global Warming Potential (GWP).
He explained that those parameters vary with time periods such as 20, 100, 500 years, or a life-time and would each yield vastly different results. “The Permit must stipulate which reference method must be adopted for the CO2eq calculations, and not left to EEPGL to determine to their obvious advantage,” he stressed.
Also of high concern is that the EPA here would be setting a CO2eq permit requirement, but the agency “does not have a working knowledge of its implementation including determination, methodology and its management.”
