ExxonMobil never examined cost of an oil spill to Guyana, Caribbean nations – Public meeting on 6th project hears

Sep 13, 2023 ExxonMobil, News, Oil & Gas

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By Davina Bagot

Kaieteur News – Four months after the President of Exxon Mobil Corporation (XOM), Darren Woods urged shareholders of the fortune 500 company to vote against a petition calling for a thorough study on the economic impacts of an oil spill from the Stabroek Block, the company’s consultant; Environmental Resources Management (ERM) has revealed that no such assessment was ever conducted.

Woods had called on the shareholders of the company to vote against the proposal since he believes there were adequate studies already done to determine impacts to the Region.

However, on Tuesday, ERM’s Socioeconomic Resources / Stakeholder Engagement Specialist, Anna Sundby, during a public consultation hosted at the Leonora Technical Institute, West Coast Demerara, it was revealed that no such financial study was ever done in Guyana.

Yesterday’s meeting was hosted as part of the application process for a Permit applied for by ExxonMobil Guyana Limited (EMGL) for the sixth deepwater development, Whiptail.

EMGL, ERM and representatives from the Environmental Protection Agency (EPA) were part of the meeting. During the question-and-answer segment, Kaieteur News asked the consultant team what the likely devastation of an oil spill at the sixth project could cost.

Sundby in response explained, “I can’t say because it’s not part of the EIA. We haven’t done an economic model of what the maximum economic impact would be. What we focus on with the unplanned events chapter is identifying what the risk of those scenarios are so we can put the right measures in place to manage that risk and so that really comes down to the oil spill response plan.”

In addition, she explained that if a spill were to occur offshore Guyana, ExxonMobil would engage in a claims process where, if appropriate, citizens could make claims for economic compensation or support to rebuild their livelihoods.

The ERM Specialist said, “Ultimately we hope that those events do not happen and most of the effort goes in to making sure that they don’t happen and that’s where (or) how the content of the EIA is based.”

Following up on the response provided to the question, Kaieteur News asked the consultant if such an assessment was ever conducted in prior EIAs or separately to underline the cost associated with a spill that can occur at any of the deepwater projects.

To this end, Sundby explained that ERM has never undertaken such a task, since evaluating the cost of a spill is not ideally part of an EIA.

She explained, “In the unplanned chapter for Whiptail and the other projects we do go through the same components, the socio-economic resources that we went through for the planned activities then we think about what would be the impacts in the event of something like an oil spill or another event so if you go to the EIA in the unplanned events chapter it does discuss impacts on coastal agriculture, impacts on fishing in the near shore area, impacts on coastal communities that kind of thing but again that’s, the intent of that is really to drive the mitigation and drive those risk management measures rather than to do…an economic model is a big undertaking.”

The Specialist added, “There is a lot that goes into that, that’s not part of any of the EIAs that we have done in Guyana and it’s honestly not part of, it’s not a standard part of an EIA that I’ve ever seen anywhere.”

Meanwhile, ERM’s Senior Project Manager and Technical Support, Jason Willey noted that while the Consultancy firm did not undertake an economic valuation, it attempted to quantify the probable risks associated with a spill on various locations across the country.

In the absence of such a study, the country is completely in the dark regarding the likely economic devastation to Guyana and its Caribbean neighbours should an oil spill occur in the Stabroek Block.

Notably, this document could be used as a tool to aid in the preparation for such an event. It would also inform other necessary steps such as adequate insurance and other protective measures.

The revelation that such a key assessment is yet to be conducted comes months after President and Chief Executive Officer (CEO) of XOM, Darren Woods told shareholders of the company to vote against the need for such an assessment since it was a waste of time and money.

Woods during Exxon Mobil’s Annual Shareholder Meeting in May this year said, “Given the comprehensive materials that are publicly available on our website, including our preparedness plan and the EIAs (Environmental Impact Assessments) related to our Guyana operations, creating an additional report as requested by this proposal would place an unnecessary administrative burden on ExxonMobil, be wasteful of the Company’s time and resources, and therefore is not in the best interests of shareholders. For the reasons stated above, the Board recommends a vote against this proposal.”

Mercy Investment Services Inc., a Shareholder in the company submitted a proposal seeking support for a thorough assessment to be conducted of the likely impacts to the Caribbean islands.

In their petition for an ‘Additional Report on Worst-case Spill and Response Plans’ Mercy Investment Services, Inc, pointedly noted that “ExxonMobil operates one of the largest oil plays discovered in the past decade, offshore of the South American country Guyana.”

The shareholders, in the petition seen by Kaieteur News, argued that Caribbean countries rely on tourism and fishing industries to support their economies, yet ExxonMobil’s EIAs characterizes “residual risk to employment as minor and assumes that a large oil spill is unlikely.”

To this end, Mercy Investment Services requested that the Company issues a report evaluating the economic, human, and environmental impacts of a worst-case oil spill from its operations offshore of Guyana. It noted that the report should be prepared at reasonable expense, omit proprietary or privileged information, and clarify the extent of the Company’s cleanup response commitments given the potential for severe impact on Caribbean economies.

The petition by Mercy Investment Services Inc. was later defeated as majority of the oil giant’s Shareholders voted against the proposal.

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• cost, oil, spill, study, Whiptail

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