In these columns, we have lamented that, in relation the oil and gas industry, and especially its regulation the government has behaved as if ExxonMobil was one of its partners in the Stabroek Block. Rather than operating as the custodian for all of the country’s interest and the upholder and enforcer of relevant laws.
In a real sense, ExxonMobil is actually a partner of the government and its co-stakeholders through the Production Sharing Agreements of 1999 (PSA) and 2016. The state is entitled a 2% royalty, and a 50% share in the profit oil after deducting up to 75% cost oil. As its predecessor APNU+AFC did, it is clear that the PPP/C government would seek to maximize the country’s profit from oil extraction operations. This must not be done at the expense or protection of the environment and stewardship that the government must also show equal commitment. The government seems to be focusing its efforts on expanding the country’s take by allowing oil extraction from approved operations and increasing the number of wells in Guyana’s Atlantic waters.
This is dangerous and full of pitfalls. This course exemplifies why there is still unacceptable flaring of natural gas from the ExxonMobils subsidiary, EEPGL Liza-1. This platform has been storing oil since December 2019, but is still unable to install equipment to prevent flaring. The government came up with the bizarre idea of imposing a fine on flaring for violating sound environmental policy or international climate change commitments. Flaring was a case of maximising revenue over state environmental obligations.
This is evident in the way that approvals for Yellowtail’s fourth oil well were granted by the Environmental Protection Agency to EEPGL. It was quickly followed by an application for a fifth Atlantic Uaru+ project. The government issued a production licence two days later. Simone MangalJoly, environmentalist, and geologist, has written a letter to EPA dated April 16th. It was published in yesterday’s Sunday Stabroek. She claims that the Yellowtail process contains lacunae, which should disqualify the awarding an environmental permit.
She listed them as follows. First, the non-disclosure of the Terms of Reference (TOR), for the Environmental Impact Assessment for Yellowtail. Despite protestations by the EPA that it wasn’t bound to publish TOR, Ms MangalJoly pointed out that the Environmental Protection (EP) Act ensures that public input is allowed into the TOR for an EIA. Therefore, the TOR should be made available to the public.
Second, she claimed that the EPA illegally rescheduled the assessment of environmental impacts to the Environmental Permit. She pointed out that Section 1.3 of her permit states that the Permit Holder must conduct an updated targeted marine environment baselines studies program in order to gain a solid understanding of the marine environment in the Yellowtail project’s area of influence (AOI).
This, it was argued, should have been completed by environmentalists for the entire Stabroek Block prior to environmental permits were issued. This is particularly in light growing concerns about fishermen’s catching fewer fish.
Ms MangalJoly argued that the EPA failed to publish the reasons for granting the environmental permit. She pointed out that section 12(2) of the Act obliges the EPA, she said, to account for its decision. The Agency must publish its decision as well as the grounds.
Fourth, she argued against the EPA’s inability to select Yellowtail EIA consultants according to the EP Act. The EPA tried to defend the hiring ERM by arguing that it could make the selection case-by-case. However, Ms Mangal-Joly stated that Section 3(a), of the Act, clearly states that the Agency cannot choose the consultants on its own. It must have the assistance of internationally recognized environmental organizations as a way to avoid bias.
She concluded her letter with the EPA by declaring that there is no doubt that the Yellowtail development permit issued to EEPGL was illegal and invalid. In light of the obvious illegalities, I request that EPA cancel the Permit. Also, EPA should restart the environmental impact evaluation process in accordance to the Environmental Protection Act.
The conduct of the EPA has been questioned since the PPP/C government came to its feet in August 2020. The government fired Dr Vincent Adams, its capable head, and reoriented it to favor unrestrained oil extraction. However, there are still major concerns about the country’s ability to provide insurance coverage in the event of a disaster and its limited capacity to respond to untoward events deep in the Atlantic.
If you need further evidence that regulation of oil and gas is not being given the due it merits, there is no better than the fact that a Petroleum Commission has yet to be established. The public needs to understand that oil is being extracted daily from two platforms in the Atlantic, with a total rated capacity of 340,000 barrels per day. Yet, the government could not be moved to establish this Commission with urgency. Remember that a Petroleum Commission Bill had been submitted by the previous APNU+AFC administration, but this was not finished. PPP/C contributors to the bill, including President Ali, commented on its importance during the second reading and argued vehemently over its shortcomings. There is a template.
In fact, Vickram Bharat, Minister for Natural Resources, had made clear his belief in the importance and potential re-introduction of the bill on the 5th of August 2020. Unbelievably it has been more than 18 months since the establishment of the Petroleum Commission. ExxonMobil/EEPGLs applications have been given priority treatment. This included a two-day speed read by environmental authorities of the voluminous environmental permit report. The President Ali must address the public.
Ms MangalJoly, as well as other environmentalists, must be commended for their efforts to ensure accountability in oil and gas. These tasks should be properly performed by the EPA and the Environmental Assessment Board, and any other agencies that fall under the control of the state. Ms Mangal-Joly and other concerned citizens raised serious concerns about Yellowtail. The Natural Resources and Economic Services committees should immediately examine the process and solicit experts. Hearings should be held with the goal of presenting government actionable reports. This is what was intended by the constitutional reforms to these committees. Whether or not they function assertively will depend on whether the Leader of the Opposition can inspire members from the non-government side to do their work.
