Esso Exploration and Production Guyana Limited (EEPGL) President Alistair Routledge has disclosed that the emissions from oil giant ExxonMobil’s local operations are 30 per cent lower than the rest of its upstream operations.
Routledge made this disclosure during an appearance on the BBC show HardTalk when he was interviewed by host Stephen Sackur. Routledge was quizzed about the volume of carbon emissions that was likely to be released throughout oil extraction in Guyana and the concerns of some environmentalists.
However, the oil executive maintained that Exxon approaches oil exploration with lowered emissions in mind and that the emissions were actually quite low compared to its other upstream operations in other countries. Further, he alluded to the current global demand for reliable energy and made it clear that suddenly halting production was not an option.
“What we see is a world that still needs a dependable, secure energy supply. And in our minds, this is a (responsibility). We can’t fail in our duty to deliver modern society’s needs. We need to deliver that, but we can do it while reducing emissions. The emissions from our operations here will be 30 per cent lower intensity than from the rest of our upstream operations.
“With the projects and the developments we’re doing here, investing in the latest technology, lowered emission intensity developments, we’re reducing the overall emissions footprint of operations today. And as a corporation, we’re committed to the pathway to net zero by 2050. It’s a pathway. You don’t get there overnight. We can’t meet the needs of society today if we just turn the lights off,” Routledge further said.
Since 2021, Guyana has received billions of dollars in flaring fines from Exxon following changes to its permit. That year, Guyana’s Environmental Protection Agency (EPA) had modified the Environmental Permit for the Liza-1 Development Project to include, among other things, a fee of US$30 per tonne of flared excess carbon emissions.
This fee was subsequently increased to US$45 per tonne. Background flaring is within the legally-allowed limit, which is less than one million standard cubic feet of gas per day. Outside of these measures, however, Guyana has taken concrete steps to ensure that its vast forest cover can be applied to the climate change fight.
Back in December 2022, the Guyana Government signed a historic multi-year agreement for the sale of certified carbon credits to US energy major Hess Corporation to the tune of US$750 million – 15 per cent of which is going directly towards the development of hinterland communities.
This deal came after Guyana was the first country to receive certification of its carbon credits by the Architecture for REDD+ Transactions (ART) on December 1, 2022.
The 33.7 million credits sold to Hess Corp is just 30 per cent of the carbon sink contained in Guyana’s vast forest. The country’s more than 18 million hectares of forests are estimated to store approximately 20 billion tonnes of carbon dioxide equivalent.
Guyana’s is also one of the few credits in the forestry sector that can now be sold in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) market, which is the compliance market for abating airline emissions.
A carbon credit is a tradable permit or certificate that allows the holder of the credit the right to emit a stated tonnage of carbon dioxide or an equivalent of another greenhouse gas. Countries and companies that exceed their permitted limits can purchase carbon credits from nations that have low emissions such as Guyana.
There are two categories of carbon offset markets in which carbon credits are traded: the voluntary carbon market and the compliance carbon market.
In the voluntary carbon offset market, organisations or countries, in Guyana’s case, create carbon credits by lowering their greenhouse gas emissions and selling them to other organisations or countries that have high emission levels.
With the compliance market, however, there are certain caps on emission levels set by Governments and other regulators as a means of achieving carbon reduction targets. This market is also known as the cap-and-trade and similarly, allows organisations that emit less to sell to high emitters, but this is driven by a legal mandate.
