EPA unable to impose fines against ExxonMobil for flaring

Despite calls for fines to be imposed against ExxonMobil over its continued flaring of gas as a consequence of a damaged compressor on the Liza Destiny, the Environmental Protection Agency (EPA) is hamstrung in doing so at this time because the oil-giant has not exceeded the 14 billion cubic feet listed in their agreement with the EPA.

“It is unacceptable,” Vice-President, Dr Bharrat Jagdeo said of the continuous flaring, during a press conference on Tuesday at the Arthur Chung Conference Center

On Monday, ExxonMobil said that it was producing at what has always been stated as the maximum production – 120,000 barrels of oil per day – with flaring currently occurring at 16 million cubic feet per day.

Although that’s one million more than it is permitted, Jagdeo pointed out that in the agreement, the EPA granted ExxonMobil permission to flare a total of some 14 billion cubic feet of gas under the current Liza permit which comes to an end in June.

ExxonMobil has reported to the government that it has only flared 12 billion cubic feet of that amount thus far. Jagdeo said at the current rate, the 14 billion cubic feet should be utitlised by ExxonMobil by April.

Until that time, the EPA seems constrained in imposing any fines.

Jagdeo said once the Liza permit ends in June, the new permit will have similar features of the recently issued Payara permit with makes provisions for fines.

According to the Vice-President, with current flaring occurring at 16 – 18 million cubic feet of gas per day, it equates to roughly 1.3 kilotons of carbon emitted. He said if the government were to impose a fine of US$30 per ton, then it amounts to a US$39,000 per day fine, should it be instituted.

Meanwhile, Jagdeo said the government has to verify Exxon’s report on flaring and its production levels. He noted that the Ministry of Natural Resources has been receiving daily production reports from the oil major which is shared with the EPA.

That report offers details on oil produced, water and gas production, and total water and gas reinjection. The Vice-President said the government will have to build capacity to verify these reports and is exploring the possibility of doing so remotely.

Although it seems costly, Jagdeo said it is something that will have to be done in the future