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Jul 02, 2021 News
– calls for Liza, Payara permits to be amended
Kaieteur News – When one considers the ramifications of certain actions the government has taken to regulate the oil sector, it is clear that there has not been a strengthening of industry standards. Instead, the principles have been weakened in favour of ExxonMobil.
Making this statement among others yesterday at a virtual press conference that was held by the Alliance For Change (AFC) was former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams. He was at the time denouncing what he referred to as the “callous misinformation campaign” being peddled by the PPP/C Government. Dr. Adams said the message of the PPP/C is that it strengthened the environmental permits awarded to ExxonMobil.
He noted however that when the modifications made by the PPP/C are examined alongside what existed in the past, it is clear that the government is spreading a false message.
The first amendment he highlighted to prove his point was in relation to flaring in the Payara Environmental Permit. Dr. Adams said a provision was modified to allow flaring to be done for up to 60 days from the time of start-up instead of the two days that were previously agreed to by the team of experts who were examining the permit. He noted that apart from himself, the team had comprised of technical personnel from the Department of Energy, the Guyana Geology and Mines Commission (GGMC) and the EPA.
Dr. Adams contended that such an amended provision in the Payara Permit is a “godsend” for ExxonMobil given its record on the Liza Phase One Project. He recalled that ExxonMobil was flaring from the time the project commenced in December 2019 and at a maximum level of 90 million cubic feet of gas for 60 days. If this performance is replicated at ExxonMobil’s Liza Phase Two Project where production will be 220,000 barrels of oil per day (double the Liza Phase One capacity) then flaring of gas could reach into the billions in a matter of days.
Another “gimmick” of the government to show that it has supposedly improved industry standards are with the introduction of a flaring penalty said Dr. Adams.
In May, the government had announced that the Liza Phase One Permit was amended to include a provision which states that ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), will pay the EPA US$30 per tonne of carbon dioxide equivalent released after May 13, 2021 via the Liza Destiny vessel. If one were to do their research, it would be seen that this tax should be between US$60 and US$100, Dr. Adams intimated. But the worst part about this move by the government is not that it has shortchanged itself, the former EPA said – Dr. Adams argues that the fact that Guyana has no expert or technical person at the EPA who is capable of properly calculating this penalty is much worse. He said that, due to this, Guyana would therefore be led by ExxonMobil on what it wants to pay to the regulator.
In addition, Dr. Adams noted that the amendment by the government does not say what happens after the contractor is made to pay the fee. “It does not say how long you can continue to flare, so you can therefore go on forever. I have dealt with these companies and if it is cheaper to flare then that is what they will do,” the environmental expert noted.
Upon taking these and other issues into consideration, Dr. Adams said he is convinced that the government has not strengthened the principles of the industry. He categorically stated that they have been weakened for ExxonMobil to continue its abuse against the State.
The former EPA Head also told Kaieteur News in an invited comment after yesterday’s press conference that he is calling on the PPP/C to withdraw the modifications it made to the Liza Phase One and Payara Permits as this would be in keeping with the best interest of the people.
He said he would also call for an independent team of experts to be convened to investigate the issue of flaring by ExxonMobil for the last 18 months. The former EPA Head said this is crucial given the oil giant’s inability to resolve issues that have led to flaring.
GAS COMPRESSOR ISSUES
Since start up in December 2019, Kaieteur News would have followed and reported on ExxonMobil’s continually malfunctioning gas compressor system. On December 20, 2020, it had announced that the gas compressor issue was fixed. But during that one-year period, it had already flared 12.4 billion cubic feet of gas per day, equivalent to the removal of 1.6M acres of forest. In simpler terms, this means that Exxon flared toxic Natural gas that could have been offset by a forest the size of Region Two (Pomeroon-Supenaam). https://www.kaieteurnewsonline.com/2020/12/22/exxons-flaring-this-year-equivalent-to-the-removal-of-1-6m-acres-of-forest/).
But the issues didn’t stop there as the system malfunctioned for a second time on January 13, 2021. The company did not reveal the cause but said that it was fixed within a matter of hours, or so it thought. https://www.kaieteurnewsonline.com/2021/03/07/exxonmobil-had-flared-early-january-claims-it-lasted-less-than-hours/).
On January 29, 2021, the gas compressor broke down for a third time, forcing ExxonMobil this time around to send the faulty equipment to Germany for repairs and upgrades. A detailed assessment of the compressor subsequently revealed that an axial vibration of the compressor rotor is what led to other mechanical disruptions. The equipment was back in Guyana by the second week of March where it was installed on the Liza Destiny vessel. Tests during installation were being carried out. (https://www.kaieteurnewsonline.com/2021/03/14/exxons-repaired-compressor-back-in-guyana/).
But before that could be completed, the gas compressor, which was supposedly repaired and upgraded, malfunctioned for the fourth time. It was subsequently removed and transported to Houston, USA, where it was repaired. Exxon reported this week that the equipment was recently installed at the second phase of tests are being carried out.
ExxonMobil also reminded that an order was made for a new compressor, which is due to arrive in Guyana for installation before year-end.
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