“Gov’t happy to receive pennies while discounting risks”- Yog Mahadeo

Aug 23, 2022 News

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…says Jagdeo gambling that no incidents will occur at Wales gas pipeline

By Davina Bagot

Kaieteur News – A massive 12 inch gas pipeline that is likely to span approximately 245 kilometers, occupying both land and offshore terrain is likely to cost Guyana some US$1.3 billion. The project, according to the predictions of Vice President Bharrat Jagdeo will slash citizens’ monthly electricity bills in half.

Eyeing this objective, civil society activist, Dr. Yog Mahadeo, believes that the People’s Progressive Party (PPP) government may be chasing pennies while overlooking the risks involved in this particular project, by not prioritizing focus on insurance. Mahadeo in an invited comment yesterday, told Kaieteur News, “they are obviously in a rush to allow the oil companies to maximize exploitation of the resources and so to that end, they are happy to receive pennies while discounting risks that other countries would have considered.”

The transparency advocate pointed out that insurance coverage has multiple layers and there is a need for such safeguards to be instituted even during the construction stage. His comments come on the heels of an explanation by the Vice President, Bharrat Jagdeo, that insurance cannot be sought prior to a building being constructed and the final cost of a project decided on. On Friday during an engagement with the media, the former Head of State explained, “first of all the people are gonna say, the insurers, where is this pipeline? Have you built this pipeline, no. We are now procuring material. We are procuring the material to start laying of it. We are now mapping the route. We are still mapping the route. We are completing the environmental studies and we have to put in place, they’d say well when you have done that, when you know the final cost then we can talk about

insurance.” He was at the time responding to a question by this newspaper on whether the government has entered into discussion with ExxonMobil Guyana for the pipeline aspect of the project.

He insisted, “It’s reasonable. It’s common sense. You can’t not know the cost of the total pipeline as yet and seek to insure it. You understand. If you have a house and you build a house for $20 million, you don’t know the house, you start the foundation and you go to the insurance company, they’d say what are we insuring?”

A local insurance firm later told this newspaper that the Vice President’s explanation was not accurate as a policy can and should be secured during the construction phase of a project, rather than after it has been completed. This, the source said would help to cater to any injuries that may occur to workers on that site and possible damage to materials, among others.

As such, Mahadeo reasoned, “there is need for insurance coverage in the building stage that is required for employers’ liability, public liability etcetera. The Contractor who undertakes the project must undertake such insurance coverage as part of the project itself.”

He therefore went on to note, “The longer term public liability coverage is also of critical importance. Jagdeo’s statement that no insurer will offer a policy without the structure being in place is factually correct. Indeed, you cannot insure something that doesn’t exist. However, a local insurance company will be able to acquire adequate international backing and could give an estimated public liability coverage cost based on the risk variables to the population and other potential risk areas.”

The advocate was keen to note that Guyana is not the only country in the world with such a project meaning estimates for risk coverage would not be an improbable consideration. He said, “I do not think that the administration lacks care about the risks…what we are seeing is a gamble that nothing will happen.”

Even as the administration has made its position clear on the issue of insurance relating the Gas to Energy project, it must be noted that other measures for safety are being handled in a similar fashion.

A Gas Leak Management Plan (GLMP) for example has not been submitted by ExxonMobil even though its Environmental Impact Assessment (EIA) has been submitted to the Environmental Protection Agency (EPA) already. When the VP was asked about this document, his excuse was, “We have probably about a year and stuff like that. Over a year before we actually bring the gas in, it’s 2024.” Experts have argued that this document should be inserted in the developer’s impact study.

Gas leak impacts
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 its EIA. In an earlier article, this newspaper reported that gas releases from the planned GTE project can result in explosions which can pose grave risk to human and environmental health.
In the EIA document, the developer 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.” Exxon’s Consultant 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. Exxon said that to reduce the likelihood of a gas release, the offshore pipeline design and installation will vary depending on the pipeline depth.

 

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