EPA makes no commitment to correct outdated insurance provision in Liza One permit

Jan 24, 2021 News

Kaieteur News- When it comes to ExxonMobil’s future oil developments – Liza Two and Payara – Guyana is covered in the event of an oil spill, but in the case of the Liza One project, the country is left exposed and runs the risk of acquiring massive debt to compensate for the damages.
But, while the Environmental Protection Agency (EPA), headed by Sharifa Razack, has the opportunity to amend the document as it sees fit, it has made no move to do so.
Kaieteur News had pointed out that Section 13 of the Liza One permit, which speaks to Institutional Authority, states: “The EPA reserves the right to review and amend the conditions attached to this Permit in accordance with Regulation 14 of the Environmental Protection (Authorizations) Regulations, 2000.”
Similarly, the Regulations state in Section 14 (1): “The Agency may at any time by notice in writing to the holder of the permit, cancel or suspend an environmental authorization or impose such conditions as the Agency considers appropriate in addition to or in place of the existing conditions, with effect from such date as the Agency may specify provided that the cancellation, suspension or modification shall not give rise to an additional adverse effect.”

This photo, taken in 2004 by NOAA Fisheries researchers, shows Exxon Valdez oil found in a shallow pit they dug 15 years after the spill. It is expected to linger for decades. (NOAA Fisheries)

Then in 14 (2): “The Agency may cancel, suspend or modify an environmental authorization during its currency for any of the following reasons… the Agency establishes new or revised standards in respect of the operations of the facility [among others].”
These provisions were pointed to Razack in an email on December 6 last with a very specific question attached inquiring whether the EPA intend to update the Liza One environmental permit to secure Guyana against financial liability. The EPA head responded on January 8 stating “As in the Liza 2 Permit, the Liza I Permit contains conditions (12.1, 12.3, and 12.5) which holds the Permit Holder liable for pollution and damage caused to the environment. References to section 39 (1), (2), (3) and (4) of the Environmental Act in condition 12.2 of the Liza 1 Permit also hold the Permit Holder liable to penalties for environmental harm as prescribed in the Fifth Schedule of the Act.
Regarding the Liza 1 Permit, the EPA has already requested that Esso Exploration and Production Guyana Limited (EEPGL) for evidence of insurance and such evidence has been submitted to the EPA.”
However, that response given was a mere deviation from the question being asked. Since then, Kaieteur News has sent approximately four follow-up emails to the EPA head and five phone calls, all of which went unanswered.
It was former EPA head, Dr. Vincent Adams, who made sure that it was Exxon – the parent company and not the subsidiary, EEPGL, – which accepted unlimited liability for any disaster that occurs during oil production at its Liza Two project. That provision would go on to be included in all oil companies’ future environmental permits.
In the meantime, the Liza One permit is set to expire on June 1, 2022 and at that juncture, EEPGL and its parent company would need to apply for a new environmental permit and be held to new standards.
Though that deadline is months away, the EPA can capitalize on it and correct the loophole. If not, Guyana would be left to expend billions for decades in the event of a large oil spill during this period, an event that would cripple the country and result in inconceivable damage.