Robust EPA necessary to ensure oil does not become a curse for Guyana

Robust EPA necessary to ensure oil does not become a curse for Guyana – Mexico’s Energy Advisor

Oct 08, 2018 ExxonMobil, News

By Kiana Wilburg

“Yes, you have to get the contracts right, you have to get the bidding rounds right, but you must get safety and environmental protection right. A robust Environmental Protection Agency (EPA) is critical to ensuring oil does not become a curse for Guyana.”
Those words were recently expressed by Carlos de Regules, the founding Director of Mexico’s Agency for Security, Energy and the Environment (ASEA).
During a recent interview with Kaieteur News at the Mexican Embassy, Regules stressed the importance of Guyana strengthening the capacity at the EPA.

Executive Director of Agency for Security, Energy and the Environment (ASEA) of Mexico, Carlos De Regules

He said, “Guyana has a very special and professional team at the Environmental Protection Agency and with new leadership too which is very timely. Its new head, Dr. Vincent Adams, has astounding experience in the oil and gas industry and those are a few perfect elements for success. I believe that Guyana is already paying some attention to the EPA but greater focus will take Guyana to where it needs to be.”
The Mexican advisor added, “The Government should not lose visibility of the EPA because it is a key element of oil and gas success. Yes, you have to get the contracts right, you have to get the bidding rounds right, but you must get safety and environmental protection right…And I think they (EPA) are ready for being transformed into a new and innovative institution that incorporates a new mandate for safety.”
Regules asserted that it is also imperative for the EPA to be able to collaborate with the newly created Department of Energy and that they are able to work together to produce an integral regulatory framework where environment and safety concerns are part of the strategic decisions being made for the oil and gas industry.
Further to this, the founding Director said that Guyana’s regulator for the environment will need to have a firm understanding of the oil and gas business as well as the willingness to be robust with operators. He noted that this will come with training and Mexico is ready to help in this regard.
TRAINING TO COMMENCE
As it relates to training for Guyana, Regules recently revealed that Mexico will soon be welcoming officials from Guyana’s Environmental Protection Agency and the Department of Energy for internships.
He said, “An EPA official will be going to a four to five week training programme with ASEA and three officers from the Department of Energy will be going to the Petroleum Institute of Mexico. I think a take away from that internship would be to identify a critical pathway to regulation in Guyana.”
The ASEA Executive Director said that Mexico, which has been in the industry for over a century, will help Guyana identify the top five regulations it needs to have in place and “then work that backwards and see what needs to be done immediately, in the next few weeks and in the months to come…”
He added, “This will help Guyana arrive at the appropriate regulatory framework. We will also ensure that the Guyanese representatives get a chance to go into the field and they are able to smell the oil and listen to the pipes and really have a feel of the oil and gas industry.”
Regules said that he is also proud of the experiences Mexico was able to share with Guyana during the recently concluded training workshop on best practices in the oil industry.
BEING ROBUST AND INDEPENDENT
A robust and proactive regulatory body is a central part of the institutional framework needed for a petroleum sector. But if this authority is to do its job effectively, it must be independent. It must be free from any instance of political interference. This point was also made pellucid by ASEA’s Executive Director.
In an interview with Kaieteur News, Regules said, “You have a very interesting situation in Guyana. You are at the beginning of a new moment in history. The country is going to move from being dependent on certain economic activities and it is going to become a regional hub; a very important place for oil and gas in the region. And Guyana has an opportunity to make it right from the start because you have a clean sheet of paper for this sector.”
The Executive Director of ASEA continued, “So before achieving full scale development of the oil and gas resources, Guyana has the opportunity to create an institutional framework that make the sector stakeholders operate in a responsible manner…”
The Mexican official added, “But I can’t stress enough that one of the ingredients of this institutional framework will be astute and honourable regulators. One of the characteristics of a good regulator is independence. You want regulators who are defining the rules for the long run, to be independent from the political cycle. They should also be financially independent so they can plan for the long term and have the resources to do so.”
The Oil and Gas Expert said that the sooner Guyana can have strengthened systems for environmental regulation in place, then it would be better off in terms of managing the sector.
Regules said, “The sooner you are able to provide the rules of the game then the sooner oil and gas investors will be able to make investment decisions that are based on a sound regulatory framework.”
In addition to this, the Executive Director of ASEA said that the Government would be able to provide the people of Guyana with the certainty that there are regulators and institutions in place that will take care of their interest.
Regules concluded, “It is a good moment for Guyana but don’t wait too long to regulate it.”
Guyana’s Environmental Protection Agency has faced criticisms from various sections of society, all of which highlight the fact that it is unprepared to deal with the challenges of an oil sector. EPA’s laws are not only outdated in several respects but fail to address the needs of a demanding oil industry.
The Authority also lacks capacity to properly review Environmental Impact Assessments (EIA) for oil companies. In fact, it had to leave the evaluation of ExxonMobil’s EIA for the Liza Phase Two Project in the hands of another foreign company. The contract for that project was awarded several weeks ago.