Guyana would be left to foot costs of over US$20B yearly compensating Caribbean islands for an oil spill - Environmental activist, Janette Bulkhan

Guyana would be left to foot costs of over US$20B yearly compensating Caribbean islands for an oil spill – Environmental activist, Janette Bulkhan

Jun 13, 2023 ExxonMobil, News, Oil & Gas

…nation could be slapped with further charges for impacts to fishing industries

Kaieteur News – Pre-pandemic statistics available for 10 Caribbean islands that can be affected by a devastating spill in the Stabroek Block shows that Guyana would have to foot costs of over US$20 Billion a year for affecting the beaches these countries rely largely on for tourism.

Environmental activist, Janette Bulkhan

This point was shared by activist, Janette Bulkhan in a letter to the Editor of Kaieteur News. Bulkhan has been championing calls for good environmental management practices, especially in the petroleum sector. She is a member of an advocacy group, Oil and Gas Governance Network (OGGN) that was formed to hold government to account in the sector.

Bulkhan in her missive prefaced her argument by highlighting the ongoing matter before the Appeal Court in which a ruling by the High Court, ordering the Parent Company of Esso Exploration and Production Guyana Limited (EEPGL) to supply an unlimited guarantee to cover the costs of an oil spill beyond the limited US$600 million policy, has been challenged by the Environmental Protection Agency (EPA), the Government of Guyana (GoG) and the oil company.

She explained that a spill in the Gulf of Campeche back in 1971 released three millions barrels of oil over a period of nine months. The slick traveled across oceans to adjacent countries which resulted in devastating effects on coastal communities. Locally, the activist pointed out that the Environmental Impact Assessments (EIAs) for the Stabroek Block projects conducted by EEPGL- ExxonMobil Guyana- indicate that 12 Caribbean islands can be impacted by a spill.

The table used by Bulkhan depicting the 2019 contribution of tourism to the GDP of 10 Caribbean islands.

Bulkhan noted that while Guyana’s “muddy shores” are not associated with beach-based tourism, these nations which rely on their beaches to contribute to the growth of their economies can be severely impacted. To this end, she said that data available for 10 of the 12 Islands signal that close to US$29 billion alone could be needed annually to compensate these nations for impacts to their tourism sectors.

Bulkhan was keen to note that this cost does not consider likely damages to the fishing industries too that will be affected. She said, “The Government as represented by the Environmental Protection Agency can see from this table that loss of the annual travel and tourism value of nearly USD 29 billions is nowhere near covered by a collateral security of only USD 2 billion from EEPGL and/or its parent company ExxonMobil.”

The US$2 billion guarantee she referred to is the guarantee Exxon has been ordered to lodge, pending the outcome of the Appeal Court decision. On Thursday, Appellate Judge, Justice Rishi Persaud granted a stay of the High Court ruling for the unlimited parent company guarantee to be supplied by June 10, 2023. Failure by Exxon to comply with this order would have resulted in the suspension of the Liza One Permit. Justice Rishi Persaud has now given the company 10 days to lodge the US$2 billion parent guarantee. In this regard, the activist reasoned, “In the absence of the parent company letter from ExxonMobil to cover completely the liabilities, our Caribbean Island friends may be asking in a quite unfriendly letter for USD 27 billions of dollars of compensation for oiled beaches, to be paid by the Guyanese taxpayer; and that would be just for one year.” She noted, “Add more for loss of income over the several-to-many years to clean and restore the beaches and fisheries. Such a claim would bankrupt Guyana.” Bulkhan believes that Guyana should not be made to wait any longer for adequate protection in the extraction of its oil wealth.