The court has no business examining Exxon’s $2B document and should take EPA’s word about its existence and adequacy
What’s in the 2B Exxon oil spill guarantee that the courts need to see and why? At first thought, it seems ridiculous that the EPA would not present the court with the document but as one digs deeper into the issue it becomes clear that the court has no business examining the document and has to take the word of the EPA that A. It exists and B. It is adequate for oil spill exigencies. Let me expound. The Environmental Protection Agency (EPA) was established under the Environmental Protection Act 1996: AN ACT to provide for the management, conservation, protection, and improvement of the environment, the prevention or control of pollution, the assessment of the impact of economic development on the environment, the sustainable use of natural resources and for matters incidental thereto or connected therewith. The agency is autonomous (like the Judiciary) and is regulatory with the authority to grant or not grant permits for developmental projects that will impact the environment.
The EPA is staffed with experts in various fields who examine projects carefully to ensure a balance is maintained between economic development and the protection of the environment. The Judiciary has neither the expertise nor authority to usurp the functions of the EPA and has already overreached by ordering a USD 2B guarantee without supporting documentation, studies, or reasoning; ExxonMobil and the EPA made informed decisions that USD 600M was more than adequate to clean up three simultaneous spills in Guyana’s waters based on the size of wellheads, pressures in the wells, spill capping capabilities and equipment available (and subscribed) in the region. All of this knowledge was spurned by arguments based on layman hysteria and fears drummed up by references to the Deepwater Horizon incident. This illogical court order has cost Guyanese millions of USD as the cost of the additional insurance is now part of ‘cost oil’, which brings me to the actual guarantee document and its contents.
The Guarantee document is a combination of costs, that of subscription to wellhead capping stack systems in the event of a spill which makes capping stacks, their transportation to the site, and specialist spill crews for cap installation and cleanup available within seven days of an incident and insurance costs, a premium that is negotiated in confidence between the operator (Exxon) and the Insurance company, both of whom have experts and access to information that allows full risk assessment to both parties. Given that the risk assessment called for USD 600M and Exxon was ordered to purchase additional (and unnecessary) coverage, the premium paid will be a closely guarded secret, its revelation has implications for Exxon, the Insurer, and Guyana, all of which lose negotiating power in the future if those premium rates become public knowledge.
Should the court succeed in its demand to see the document, it begs the question of who competently assesses it. Is the court going to employ an oil spill actuary in this exercise? Would the lawyers for the EPA and Exxon agree that the court’s actuary is competent? Our judges had previous difficulties with basic mathematics that did not engender my confidence. Further, what, if any corrective action could be ordered by the court without usurping the function of the EPA; it is an exercise in futility at best, ego and judicial overreach at worst.
The EPA Act specifies what documents should be made public by the agency; it does so with good forethought by the framers. Editor, this entire environmentalist crusade against Guyana’s oil production is based on personal beliefs, hysteria, and fear-mongering, absent are facts and reality. Our judiciary has overreached and cost Guyanese untold millions for which there is no recourse to recover, we cannot sue judges for ignorance or overreach, instead, we have to pay the bill and hope for good sense to prevail soonest. Given the prevailing winds, I would rather see urgent changes to legislation that further clarifies and solidifies the autonomy of the EPA and keeps activist judges out of an area for which they have no training, expertise, or knowledge, legislation that strictly/explicitly confines judges to interpret the law not making it up as they go along; take the advice offered by American writer Will Leamon “never give a clown too many balls to juggle”.