Money from flaring cannot offset environmental damage – Min. Bharrat

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With oil giant ExxonMobil currently paying for every cubic foot of gas it flares in its operations offshore Guyana, Natural Resources Minister Vickram Bharrat said that the money cannot offset the environmental damage, but can go towards doing some good, including creating employment.

This comes after Guyana’s Environmental Protection Agency (EPA) would have modified the Environmental Permit for the Liza-1 Development Project to include, among other things, a fee of US$30 per tonne of excess carbon emissions that is flared.

In an interview with this publication, the Minister acknowledged that the money Guyana gets from Exxon’s subsidiary, Esso Exploration Production Guyana Limited (EEPGL) cannot undo the environmental damage.

“As you’re aware with the flaring issue, now it is actually bringing in a fee. We’re charging Exxon a fee for flaring offshore. That would have started May 26. That permit was updated by EPA on May 12. Exxon applied for a 36-day period to get the flash gas compressor fixed. And the flaring minimised to a very low level.”

“I know that cannot offset the carbon emissions and the damages to the environment, but at least we are bringing something back into Guyana. Something we can use in other areas, maybe in forestry or other sectors, to do some offset and maybe have alternative means of economic employment. Especially in the hinterland communities,” the Minister suggested.

Based on the amended environmental permit, EEPGL will have to pay the Guyana Government in excess of US$1.3 million for excess flaring of gas at its Liza-1 operations in the Stabroek Block offshore.

During a recent press conference, Vice President Bharrat Jagdeo disclosed that the oil major has since applied to continue flaring for a 36-day period. He explained that this application takes effect from May 26, hence Exxon will have to pay for the excess flaring from that day, for the next 36 days. Based on calculations, the Vice President disclosed that this 36-day flaring will rack up a fee of some US$1.3 million.

Exxon has come under fire over its increased flaring activities in recent years with environmentalists up in arms over its harmful effects on the environment. Earlier this year, the company had sent its gas compressor for repairs in Germany after it developed technical issues resulting in increased flaring. But after being reinstalled in April, technical issues were still encountered, forcing the company to significantly drop production.

It was reported that ExxonMobil’s oil production had plummeted to 30,000 barrels of oil per day (bpd) in mid-April, as the gas compressor that had been in Germany for much of February being repaired after developing technical issues, once again failed.

The oil giant had explained that other problems in the discharge silencer were detected during the final testing phase of the reinstalled flash gas compressor on board the Liza Destiny FPSO vessel.

It was explained that a team from SBM Offshore, MAN Energy Solutions and ExxonMobil are on site to assess repairs, supported by engineering experts in Europe and the United States of America (USA).

Nevertheless, in a subsequent update on April 21, Exxon had said production was back up to 110,000 bpd accompanied by a flare level of below 15 million cubic square feet of gas per day.

Meanwhile, it was announced a few days ago that after weeks of repairs following recurring technical issues, the newly upgraded flash gas compression system onboard the Liza Destiny vessel was returned to Guyana and was being reinstalled.

The third stage discharge silencer, a key component of the flash gas compression system for the Liza Destiny, has had to be upgraded. Additionally, a redesigned third stage discharge venturi had to also be manufactured. [Guyana Times]