Gas to shore to energy project

ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) has embarked on a series of public hearings for the crafting of the terms of reference for the Environmental Impact Assessment (EIA) that will have to be done for the Gas to Energy Project Onshore and Offshore Guyana.

This project encompasses: an onshore natural gas liquids and natural gas processing plant to be located on the West Bank of Demerara (WBD), an offshore 12-inch pipeline approximately 220 km long, an onshore 12-inch pipeline approximately 27 km long and a temporary materials offloading facility on the WBD.

Two of the sessions thus far, a virtual one on July 8th and a public one at the Umana Yana on July 9th have seen some of the most intense questioning and challenging of the intent of Exxon, EEPGL, the Environmental Protection Agency (EPA) and, of course, the Guyana Government. This is a most welcome development. Several questioners raised an important point. Why is it that Guyana is embarking on a project to transform associated gas from its offshore well to energy when it will compound the climate crisis and when there are suitable green energy options that could be invested in? Unfortunately, this conundrum would probably be ruled out in its entirety from consideration in the EIA as it falls outside of the ambit of what is before the public at the moment.

The question of the burden of associated gas on the already perilous climate crisis and the fundamental contradiction with Guyana’s aspiration to become a Green State should have been comprehensively addressed before a decision was taken by the PPP/C government to embark on a gas-to-energy project. This question along with an independent financial feasibility of the proposed project should have formed the basis of the government’s consideration of whether it should have gone ahead or whether Exxon should be made to re-inject the gas to ensure it wasn’t flared, vented or otherwise released into the atmosphere. A major role should also have been played by the Natural Resources Committee of Parliament in canvassing various experts on the wisdom of this project.

Instead, in its irresponsible headlong rush to monetise Guyana’s offshore petroleum resources, the PPP/C government has ignored completely the increasingly germane problematic of where to draw the line in fuelling the dangerous warming of the Earth and all that that entails. Guyana’s right to sustainably

extract petroleum for sale on the international market cannot be reasonably challenged in the milieu of limited economic development opportunities. However, the piping of associated gas in a complicated confabulation studded with numerous risks and upping Guyana’s greenhouse gas emissions cannot be easily agreed. Yet, it was decided apparently on the no-brainer say-so of Vice President Jagdeo. It is unclear what President Ali’s standard was for a decision on the project.

It must be stated again that any government that decides to risk a complicated US$900m taxpayer-funded project without a comprehensive study is engaging in governance of the worst order and would be held fully accountable for it. The government’s excuse was that it used a series of studies under the former APNU+AFC government – none of which encompassed all of the attributes of the present project and one of which expressly ruled out the site now handpicked by the PPP/C government as the locus of the project. This must be the first project of any sort in the postIndependence history of the country where a change of government from one party to another has preserved planning for a mega project. In this case, it has nothing to do with continuity between governments but only to enable this administration’s zealous drive to monetise oil and gas resources so it could spend to the hilt.

Given that the government has already made a decision to proceed with the project, the most that could be hoped for at this stage is that the resultant EIA will set out the extensive jeopardies and risks to the environment, human health and climate in sufficiently stark terms to engineer a rethinking of whether to proceed at all. The agency selected to undertake the EIA must be made to take full account of all of the concerns that have been raised thus far in these public consultations.

Another concern raised by members of the public was the suspicious retraction of new guidelines just recently set out by the EPA for EIAs. It was

surmised that this withdrawal was done to limit any complications to the rapid compilation of the EIA and the green lighting of the project. The EPA is still to convincingly explain why the withdrawal has occurred.

It had not previously been known that ExxonMobil/EEPGL was planning to sell a portion of the gas to a third party. Such matters should have been fully ventilated in the feasibility study and does raise another question posed at the recent consultations as to who owns the gas and the project? Who is the major decision-maker? Is it ExxonMobil, EEPGL or the Guyana Government? Where will the liability lie for anything that goes wrong and is that party fully insured?

Another troubling aspect of this project is that it will be financed out of the proceeds of the Liza-1 well. This imposition on the Liza-1 revenues will further extend the cost recovery phase and limit monies available for profit share in the name of a project that is riddled with risks and which will exacerbate the climate crisis. The only upside to this imposition on revenues is that it is another ground for the Guyana Government to say to ExxonMobil and its partners that the time has arrived for a complete renegotiation of the 2016 Production Sharing Agreement (PSA) to enable Guyana to earn more with each new platform approved, encompass safeguards such as ringfencing and to inscribe a depletion policy for the country that takes account of international climate commitments.

The public awaits any semblance of intent by the PPP/C government to redress the 2016 PSA in favour of the country, its people and the planet.