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Govt. looking to implement fines on gas flaring – VP
VP Dr. Bharrat Jagdeo, during yesterday’s press conference
Kaieteur News – Vice President (VP), Dr. Bharrat Jagdeo, says that the People’s Progressive Party/ Civic (PPP/C) government is looking to implement fines for ExxonMobil’s increased flaring at their Liza One operations.
Kaieteur News had previously reported that Exxon’s increased flaring from minimum pilot levels were due to a defective gas compressor aboard its Liza Destiny Floating Production Storage and Offloading (FPSO) vessel. That compressor, which has failed for a second time, has been sent to its manufacturer in Germany, where a thorough inspection on it is expected to last two months.
During his first press conference for the year, Dr. Jagdeo referenced reporters to ExxonMobil’s Liza One Environmental Impact Assessment (EIA), which was issued in 2017 by the former APNU+AFC regime. In that assessment, the Environmental Protection Agency (EPA) had permitted the oil company the allowance to flare a total of 14 billion cubic feet of natural gas.
He then reminded reporters yesterday at the Arthur Chung Convention Centre (ACCC), that Exxon has already flared 12.5 billion cubic feet of natural gas.
However notably, recent calculations by Kaieteur News show that if Exxon continues to flare a volume of 16-18 million cubic feet of gas per day, which were shared by Dr. Jagdeo, then by April’s end, the oil company would have already exhausted that 14 billion cubic feet cap. This, Dr. Jagdeo indicated, would give the government an opportunity to impose fines upon Exxon for their flaring.
To this, the VP explained that if the government charges USD$30 per every 1,300 tons of gas flared, it would amount to USD$39,000 in fines that Exxon would be mandated to pay for each day it flares. “It depends on what the market is for a ton of carbon,” he noted.
When our reporter asked the VP how effective a fine would stand when the contract signed between the government and Exxon allows the oil company to recover all charges spent though cost recovery, Dr. Jagdeo made it pellucid that the government will have a “dispute” with Exxon, if it looks to recover those charges.
“You can’t recover fines,” he said, “We’re going to make a big issue about that. That is a fine to the operator. How are we going to pay half of the fines ourselves, we the government? We will never accept that to pay if you are putting it against cost oil. We will end up in a dispute if they attempt to do that.”
Notwithstanding this, Dr. Jagdeo indicated that if Exxon does not exhaust that 14 billion cubic feet allowance by the time the permit is up for renewal in June 2022, then the government will still look to implement conditions from the Paraya Environmental Permit onto the Liza One permit. These conditions would finally close loopholes which allow for flaring without penalty, he noted.
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