No gas leak management plan for gas-to-shore project

May 13, 2022 News

– ExxonMobil says will not walk away from incidents but does not commit to insurance document

By Davina Bagot

Kaieteur News – In the absence of a gas leak management plan, Guyanese are clueless not only about the likely damage that can be caused as a result of a possible leak from the pipeline, which will be used to transport the natural resource, but also the likely response from the project developer, ExxonMobil.

Gas to Energy Project Manager, Mr. Friedrich Krispin

But when asked about its responsibility at a public consultation hosted on Wednesday, the oil company merely assured that it will not walk away from any incidents, but will do the right thing. This is according to the Gas to Energy Project Manager, Mr. Friedrich Krispin. While responding to a question by this newspaper, he explained that lawyers often advise not to talk about taking responsibility as this often ties the company to legal consequences. According to him, “Responsibility is something that lawyers tell us not to talk about…because there are a lot of interesting legal ramifications with responsibility but the one thing I can tell you is; I can say from 35 years of experience and I can say from knowing the history of a 140 years of this corporation we don’t walk away from incidents, issues, accidents etcetera, we make sure that we take care of things, we make sure that we clean up where we left, we make sure that we clean up the environment if there is an incident and we make sure that things are left very much like we found them.”
When he was pressed further to say when a document would be signed, specifically to secure an insurance policy to cover any mishaps, Krispin said he could not respond. “Unfortunately I can’t speak to that it is something the legal department is working through. They have commitments with the government of Guyana and I have read some of them stuff but I can’t speak on their behalf but I am sure that they are always gonna do the right thing,” he shared.
Similarly, when it comes to oil spill response and management, ExxonMobil has, since the startup of its oil operations in December 2019, evaded demands to provide insurance coverage, and instead tied its subsidiary to providing this guarantee. This has been the center of debates as the fairly young company with assets worth only around US$5 billion, would not be able to effectively cover all costs associated with an oil spill in Guyana, should such an adverse event occur. After numerous articles by this publication for the oil major to take responsibility, it presented the Environmental Protection Agency (EPA) with a proposal for a US$2B guarantee which would cover any oil spill costs not satisfied by its subsidiary.
The EPA has chosen not to accept this offer as yet until ExxonMobil can justify how it arrived at the US$2B guarantee for a worst case scenario offshore Guyana. In the meantime, Vice President Bharrat Jagdeo has said that the government is in the process of getting the company to provide an insurance policy for the entire Stabroek Block. “We are working with the companies to secure a parent guarantee that will cover the entire Stabroek Block. Not Liza 1, Liza 2, Payara or Yellowtail, but the entire Stabroek Block, but that is a separate issue,” he said.
The VP did not disclose figures, or further details regarding the guarantee his government is now looking to secure from ExxonMobil, more than two years post first-oil.
Jagdeo was keen to note during his interview, however, that the former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams had merely thought of or “had something” up his sleeves while at the organization, but it is the PPP that is ensuring it is done.
Gas leak impacts
It must be noted that though gas leaks, and worse yet, explosions or fires are all listed as likely ‘unplanned events’ that can take place, as a result of the pipeline, the oil company has completely glossed over how it would respond to such a disaster. In an earlier article, this newspaper reported that gas releases from the planned Gas-to-Energy project can result in explosions which can pose grave risk to human and environmental health.
In the EIA document, EEPGL explained that a loss of integrity of the offshore pipeline, resulting in a natural gas release can be caused due to corrosion, objects striking the pipeline, and a buildup of stress in the pipe wall, causing buckling. The EIA goes on to say that if an unplanned release of gas from damaged subsea pipelines occurs, the released gas will generate a gas plume that rises from the seafloor to the sea surface. Therefore, “Fire or explosion accidents can occur when the released gas disperses into the atmosphere and encounters ignition sources, which could have an adverse impact on human life and environment in the immediate vicinity of the fire.” ERM added that the consequences of a release would likely be less severe offshore as it “is extremely unlikely that there will be an ignition source to cause a fire, and the gas will passively disperse without affecting any resources” rather than an onshore occurrence. However, a release close to the Floating, Production, Sharing and Offloading (FPSO) vessel could result in a fire onboard the FPSO. EEPGL said that to reduce the likelihood of a gas release, the offshore pipeline design and installation will vary depending on the pipeline depth.