EPA increases charge for flaring at oil ship

Flaring levels at ExxonMobil’s Liza 1 Development has been significantly reduced to six million standard cubic feet (mscfd) per day, according to the Head of the Environmental Protection Agency (EPA) Khemraj Parsram.

The oil company was flaring 15 million standard cubic feet prior to July due to mechanical difficulties with the flash gas compress on the Liza Destiny Vessel.

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Parsram, in an invited comment on Tuesday, explained that the EPA has now bumped up Exxon’s flaring charge from US$30 to US$45 per tonne of excess Carbon Dioxide equivalent (CO2e) emitted, which will be applied from August to the end of the year.

That flaring charge was instituted in the revised Liza 1 Environmental Permit in accordance with the EPA’s legislation and to bring it in line with the Payara Permit.

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Terms and conditions in this permit include emissions reporting requirements, technical considerations for flaring, timelines for flaring events and an obligation on the company to pay for the CO2e as a result of excess flaring.

The EPA Head further explained that the company has indicated that it could return to pilot levels of flaring by the end of the year.

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“The US$45 is in keeping with standard international practice…and we thought it was reasonable to raise the fee for now and then we take it from there,” Parsram said.

When asked what would be the next step if December comes and ExxonMobil is unable to resolve the flaring issue, the EPA Head noted that “a combination of things would occur.”

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“We have not reached there as yet but it depends on the situation. So, if we find that it is unreasonable – if there is no real effort or something does not make any sense – and we find that it was purposefully done, then we will apply the full arm of the law as necessary.

“When that time comes, we will have to evaluate it, see what is the situation and determine the way so it could be a no-no and they would have to find some way for compliance but we are working with them [ExxonMobil Guyana] on getting it to be solved.”

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Thus far, the EPA has already received approximately $400 million in payments for flaring.

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