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ExxonMobil paid EPA $US9M for one year of flaring
Kaieteur News – American oil giant ExxonMobil last year paid US$9 million to the Environmental Protection Agency (EPA) to flare excess gas at its offshore operations in the Stabroek Block.
This information was revealed during the Consideration of the Budgetary Estimates on Monday. Minister of Parliamentary Affairs and Governance, Gail Teixeira explained, “The revenue that came in, as you will see under the revenue, $1.8 billion came as revenue last year and this is the money that the EPA got from the flaring tax that was introduced.”
She said in the Budget document this year, the agency did not cater for revenue as flaring is hard to project. At the same time, she pointed out that the regulator has not increased the amount as “they feel that there would be (or) they (ExxonMobil) are not expected to continue with flaring as they did before.”
Alliance For Change Member of Parliament – Khemraj Ramjattan followed up to enquire whether this $1.8 billion will be available to the EPA to spend which was confirmed by the minister. The EPA introduced a flaring fine following rampant offshore flaring by Exxon’s operator, Esso Exploration and Production Guyana Limited (EEPGL) in 2019, shortly after the start-up of first oil at Liza One.
ExxonMobil flaring at the Liza Destiny
The fine was increased from US$45 per every ton of carbon dioxide emitted through flaring to US$50. It can therefore be determined that the oil giant made payments on approximately 180,000 tonnes of Carbon Dioxide equivalent (CO2e) flared last year.
Presently, oil is being produced at two fields in Guyana’s rich Stabroek Block, inclusive of Liza One and Liza Two. The oil company has always been hesitant to release its flaring data.
In July last year, Production Manager at ExxonMobil Guyana, Mike Ryan told members of the media fraternity that the company was finally able to bring an end to the gas compressor woes that plagued the Liza Destiny floating, production, storage and operating (FPSO) vessel. The malfunctioning equipment had led to two years of flaring which released over 200 toxic chemicals into the atmosphere.
Ryan said the Exxon team was able to successfully install a new compressor from Germany and was even open to sharing that over US$10M in flaring fees had been paid over to the Environmental Protection Agency (EPA).
But what the Production Manager carefully dodged was questions posed by Kaieteur News on the amount of gas flared to date via the Liza Destiny FPSO for the two-year period. Ryan would only repeat that the company maintained full compliance with the EPA’s permitted parameters for flaring which was between15-7 million cubic feet of gas per day. After public pressure, the company came out saying that “To date, we have made payments on 279,537.33 tonnes of CO2e (Carbon Dioxide equivalent) flared.”
The company’s response came in after environmentalists and transparency advocates called out the hiding of information as a breach to transparency best practices.
The oil company said it remains proud of its “strong safety record” and that it has been reporting all its emissions and releases to the EPA. According to ExxonMobil, “The company has always been open and transparent about the volume of gas being flared and has routinely provided this and other operational information to the government, media, and other stakeholder groups.” Contrary to these claims, one Energy Technologist, Mr. Alfred Bhulai said that his requests for flaring data from both the oil company and EPA have been ignored. It must be noted that this information is now available on the Ministry of Natural Resources website, see link below. https://petroleum.gov.gy/data-visualization?tid=206
Flaring, as the word suggests, is the process of burning associated gas that is brought up during oil production. Notably, this process emits harmful gases into the atmosphere that can, not only affect seabirds and marine creatures, but also climate change. In addition, it must be noted that there are alternative options available to the oil company to avoid flaring, such as gas re-injection. However, Exxon has publicly made it clear that it is cheaper for the company to flare the associated gas, rather than re-inject it into the wells. Various studies conducted have outlined that gas flaring is a major source of greenhouse gases (GHGs) that accelerates global warming. Flaring releases two major GHGs – Carbon Dioxide and Methane.
- EPA, ExxonMobil, Flaring, oil, tax
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