Conflict between EPA and petroleum laws potentially disastrous

Oct 27, 2020 News

– Guyana must fast track law reform – IDB

Kaieteur News – Even though the People’s Progressive Party/ Civic (PPP/C) Administration has given a commitment to modernize the legal framework for the oil industry, the Inter-American Development (IDB) has pointed to some troubling areas of disharmony in the local laws which underscore the need for the government to act swiftly.
In its latest industry report on Guyana, the financial institution explained that the areas of legal conflict exist between the Environmental Protection Agency (EPA) Act and Regulations and the Petroleum Exploration and Production Act (PEPA).
The bank noted that by law, the EPA grants an environmental permit to companies which serves as an “implied” condition that the developer shall have an obligation to use the most appropriate technology for exploration and production and to restore and rehabilitate the environment. The EPA also has the power to withhold issuance of an environmental permit unless it is satisfied that the developer can pay compensation for any loss or damage which may arise from the project or breach of any term or condition of the environmental permit.
While this may be well and good, the bank noted that there is significant conflict when one turns to the environmental standards set out by the petroleum laws for the issuance of petroleum prospecting and production licences. The IDB said, “A real risk of disharmony exists between these principles and standards of the EPA Act and the standards in the PEPA and Petroleum Regulations. Specifically, the standard applicable to licensees under the PEPA is good oilfield practices.”
The bank said that “good oilfield practices” is defined as all those things that are “generally accepted as good, safe and efficient in the carrying on of prospecting for petroleum or, as the case may be, operations for the production of petroleum.” The bank categorically stated however that the term “good oilfield practices” may or may not equate to the principles established in the EPA Act and regulations made under it.
Taking this into account, the bank said it is crucial that Guyana addresses as soon as possible, the disharmony between those standards under the EPA Act and those under the PEPA as it believes that they “are potentially disastrous for Guyana, particularly (but not only) if an oil spill were to occur.”

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