GUYANA’S rapidly developing offshore oil and gas sector presents a once-in-a-generation opportunity to secure wealth for a country that has historically suffered from low growth and underinvestment. This new wealth also presents a challenge to managing the natural wealth of Guyana – the land, air and sea that underpins our green identity. Tasked with maintaining Guyana’s global leadership on sustainability and environmental protection is the Environmental Protection Agency (EPA).

The EPA has broad responsibility under the Environmental Protection Act to oversee the environmental activities of all persons – including companies involved in the extraction of Guyana’s natural resources in the mining sector, forestry and oil and gas development. Before any project that might impact the environment can proceed, the EPA determines the necessity of an environmental impact assessment or EIA to ensure the effects can be mitigated and managed in a way that limits impacts that are unavoidable.

Guyana’s ability to both accelerate the pace of oil and gas development – crucial in a globally competitive market for exploration dollars – and preserve the environment, is contingent upon the EPA’s ability to expand and add new capabilities. The safety and success of development so far is a credit to the EPA’s own rapid growth over the past several years.

The EPA has steadily boosted its capacity to regulate the oil and gas industry and adhere to international standards. At the start of the year, Guyana approved its largest budget in history, G$552.9 billion, which included oil revenues for the first time. The 2022 budget for the EPA included some G$100 million in allocation for capital expenditure, with G$74.1 million of that money to be spent on digital environmental monitoring, and reporting and verification of the framework for offshore, petroleum, mining, and forestry activities.

This allocation is pivotal to providing remote monitoring sensors, instruments, and dashboards as well as scientific and laboratory equipment that will be useful in oil and the non-oil industries.
The EPA has faced some challenges owing to a steep learning curve which isn’t remarkable, considering that Guyana did not have an oil and gas sector until recently. Notably, the EPA has come under criticism for failing to act quickly after the Liza Destiny, the very first floating production, storage and offloading (FPSO) vessel operating in the Stabroek Block, faced repeated issues with the flash gas compressor that led to excess flaring.

Since that time, however, the agency has tightened the language in subsequent environmental permit to explicitly prohibit routine flaring and venting outside of startup and maintenance periods and continued to invest in the personnel and expertise necessary to provide world class oversight of the operations offshore.

The EPA is undergoing important investments in recruiting talent, most notably an increase in the oil and gas unit from just six persons in 2021 to more than double that number presently. This will further allow the agency to conduct remote monitoring onshore and to deploy staff aboard the FPSOs for independent monitoring and verification.

Beginning in May 2021, the EPA modified the Environmental Permit for the Liza Phase One Development Project to include a penalty of US$30 per tonne of Carbon Dioxide equivalent (CO2e) flared in excess of the timelines permitted in the permit. The permit was further modified in January 2022 to increase the fee to US$50 per tonne of CO2e. Fees are just one of many tools the EPA has at its disposal to ensure that operators are held to account.

The recently renewed Environmental Permit for the Liza Phase One Project issued in June 2022 also reflected many changes now required by the EPA since the previous permit issued first in 2017. This update incorporated many lessons and best practices learned and follows the new and improved standards set out by the Yellowtail Environmental Permit.

Importantly, the permit strengthens Guyana’s ability to quickly respond to any incident offshore by requiring well capping equipment, crucial to stopping unabated oil flow, to be present and available in country.
“So, the permit will see a focus on preventing pollution, preventing any accident, preventing any oil spill. This will be done in a comprehensive way even as we ensure there is a safety case” Executive Director of the Environmental Protection Agency (EPA), Kemraj Parsram said.

Included in the renewed permit are additional requirements for ExxonMobil Guyana’s offshore production. The renewed Liza Phase One Project permit includes the increased fees for excess flaring to US$50 per tonne of CO2e and included requirements for financial assurance, monitoring of the effects of effluent discharges and a grievance mechanism by which citizens are able to seek redress. The standards set under the new permit will ensure that all environmental and social safeguards are taken for the protection of human health and the environment.

The permit process reflects the EPA’s newfound knowledge and strength. This enables it to engage oil companies as a partner and peer in collaborative discussions that can find win-win solutions to protect both the environment and Guyana’s financial future.

Guyana’s Environmental Protection Agency has risen to the occasion to safeguard the natural environment and preserve the collective inheritance of all Guyanese. The EPA has taken the lessons learned from local and international offshore operations, and feedback from stakeholders throughout the country. While oil and gas and other extractive industries are not without risk and more remains to be done, a robust and competent EPA is a key safeguard to protect the natural environment.