GUYANA, through the Environmental Protection Agency (EPA), has received approximately $930 million (US$4.5 million) in payments from ExxonMobil for the flaring of gas at the Liza Phase One operation in the lucrative Stabroek Block, offshore Guyana.

The figures, initially released by petroleum website, OilNow, were confirmed by Head of the EPA, Kemraj Parsram, who emphasised that the money collected is “cumulative.”

He reminded that the penalty for flaring, as calculated locally, is US$45 per tonne, which is an increase from the US$30 as was previously agreed to.

The payments for flaring are being made in accordance with the Polluter Pays Principle (PPP), as specifically outlined in Guyana’s Environmental Protection Act implemented in 1996.

Gas flaring essentially refers to the more than one and a half century old burning of natural gas during the oil extraction process.

Globally, such flaring causes more than 300 million tonnes of carbon dioxide to be emitted into the atmosphere each year, and, as stated in the government’s modified Low Carbon Development Strategy (LCDS), those damaging gases could be best used as alternative sources of energy.
Based on the strategy, global emissions are enough to satisfy the annual electricity demand of the entire continent of Africa.

To this end, the People’s Progressive Party/Civic (PPP/C) government is pursuing the implementation of a massive US$900 million gas-to-energy project which is slated to be established within the Wales Development Zone on the West Bank of Demerara, at least by 2024.

The ground-breaking project will see the construction of a state-of-the-art pipeline which will transport natural gas from the Liza Phase One and Liza Phase Two operations to an onshore natural gas processing (NGP) plant.

And, instead of the gases being destructively flared into the environment, it will be converted to energy and fed to the national power grid.
Ultimately, in keeping with its age-old climate change fight, the Government of Guyana is implementing a “no flaring” policy, except in the case of genuine emergencies.

One such emergency presented itself in the last few months, when ExxonMobil was forced to flare above the pilot level due to a defective gas compressor on the Liza Destiny FPSO.

This situation has since been remedied, but it did see Guyana being compensated for environmental damages totalling $400 million.

It was previously reported that, owing to the damaged compressor, ExxonMobil was “compelled” to flare natural gas of 15 million standard cubic feet per day (mmscfd) for several months. It was eventually able to reduce flaring to at least six mmscfd. Importantly, it was noted that subsequent to ExxonMobil reducing its flaring, the EPA moved to increase the US$30 fee to US$45 per tonne of carbon emitted.

Both President Dr. Irfaan Ali and Vice-President, Bharrat Jagdeo, have said that even though Guyana has every intention to extract and market its oil resources, the operations will be done in a manner that minimises environmental harm.

The government has said that it will be utilising the country’s oil revenues to execute a number of developmental projects, including those that serve to advance the fight against climate change.

In that fight, achieving at least 75 per cent renewable energy is paramount, and will be driven largely by an energy mix which will utilise hydro, solar, wind and natural gases.

The gas-to-shore project aside, the government is also moving aggressively to realise the Amaila Falls Hydropower Project, which was unjustifiably quashed under the David Granger-led government. Also in the pipeline is the establishment of a number of mini hydropower plants and solar farms.

GLOBAL RESPONSIBILITIES
Vice-President Jagdeo had previously made it clear that even though Guyana will be developing its oil resources, it will still fulfil its global responsibilities in the fight to achieve net zero carbon emission targets by 2050.

There have been concerns that, in an emissions-free world, Guyana will have to pump the brake on its oil production; however, Jagdeo has maintained that his government has no intention to do so.

On the contrary, the former President said that PPP/C government will be positioning Guyana to become a long-term oil producer, since there will be a daily global demand of 24 million barrels of oil, even in an emissions-free world.

Speaking at a recent awards ceremony hosted by the Georgetown Chambers of Commerce and Industry (GCCI), Jagdeo declared, “the developed world has done its bit,” alluding to the issue that even though first world countries are the leading carbon emitters and polluters of the environment, small and developing nations such as Guyana are the ones suffering the brunt of the consequences, stemming from destructive hurricanes and earthquakes, to disastrous floods and drought.

“If you add all of the emissions from Exxon Mobil… and emissions from every sector here in Guyana, it will not be equivalent to the emissions of the world in one hour in a day; it would be less than; that is annual emissions,” the Vice-President posited.

He believes that Guyanese who want the country’s oil production to cease are essentially propagating the agenda of developed nations that are adamant to continue the operations that make them wealthier, while saddling developing states with the responsibilities of protecting the environment.

“So, our NGO [Non-Governmental Organisation] believes we must shutdown the operations here, but in the developed world, they want more oil pumped because prices are escalating and affecting their people, their businesses, their consumers,” Jagdeo highlighted.

He continued: “There are just 490 trillion tonnes of carbon dioxide allowance remaining before we achieve net zero and the 1.5 degrees targets; that belongs to us now in the developing world; the developed world has used up its allowances, but they don’t behave that way; they want equal burden sharing now, all of everything that we have.”

The former President went further to lament the hypocrisy behind some of the environmental instructions that come from larger countries, including a directive that the developed world will not support financing for any fossil fuel-related activities and that gas, which is a fossil fuel-related sector, should not be part of the energy mix of the future because it is polluting.

“But we have just seen that when gas prices tripled in Europe, the same countries that say this, they’re now starting up some coal fire power plants which are even more polluting than using gas for energy,” Dr. Jagdeo lamented.

He argued that when developed countries are faced with crises, “they look at any solution, whether it’s polluting or not.”
In addition to flaring taxes and contributing over $50 billion to the economy, Guyana’s oil industry also has untouched revenues totalling US$534 million.