The EPA Joined Exxon’s Side — Now It Wants Credit for “Protecting” You

Editorial

After siding with the world’s most profitable oil company to gut an unlimited environmental guarantee, Guyana’s regulator breaks its silence with a statement of breathtaking audacity. The 592 Guardian is not buying it.

592 Guardian. Opinion

There is a particular kind of institutional dishonesty that does not lie outright, but instead arranges carefully chosen truths into a structure designed to mislead. The Environmental Protection Agency’s statement welcoming the Court of Appeal’s ruling on financial assurance for offshore petroleum operations is a masterwork of exactly that genre. It is, in plain language, spin dressed in the clothing of principle — and the people of Guyana deserve to see it for what it is.

Let us begin with what the EPA’s statement conspicuously omits: the EPA was not a passive observer of this ruling. It was an active and willing participant in the effort to achieve it. When Esso Exploration and Production Guyana Limited (EEPGL) — the Exxon subsidiary that holds the environmental permit for Stabroek Block operations — appealed the High Court’s landmark ruling requiring an unlimited Parent Company Guarantee, the EPA did not stand aside in its duty as regulator. It did not file submissions defending the position that an unlimited guarantee was appropriate. It joined the appeal. Alongside Exxon and the Government of Guyana, Guyana’s own environmental watchdog argued in court to replace an unlimited liability mechanism with a capped financial assurance of $2 billion USD. That is the fact the EPA’s carefully worded statement never once states plainly.

“2 billion cap is not protection. It is a ceiling placed on what Guyanese citizens can ever recover when the worst happens.”

The High Court ruling that was overturned was not a technicality. It was a considered judicial determination that the scale of environmental risk posed by deepwater offshore operations in Guyana’s waters warranted the most robust financial protection available under law — an unlimited guarantee backed by Exxon’s parent company. That ruling was described as landmark precisely because it placed Guyanese law and Guyanese interests at the centre of petroleum regulation in a way that this country has rarely seen. The Court of Appeal has now reversed it. And the EPA, rather than offering any honest accounting of what has been lost, offers a press release telling us not to worry.

 THE DISTINCTION THAT DECEIVES

The EPA's statement makes much of the legal distinction between "financial assurance" and "liability." It is technically accurate. Liability is indeed the underlying legal obligation. Financial assurance is the mechanism that makes that obligation real and enforceable. But in making this distinction, the EPA reveals — whether it intends to or not — exactly why the High Court's original ruling mattered so profoundly.

Consider what it means in practice. Under Section 14 of the Environmental Protection Act, a company that causes environmental harm can be held “liable for the cost of any necessary restoration or remedial measures.” The EPA quotes this provision proudly, as though it settles the matter. It does not. A legal liability without a funded guarantee is a judgment against a company that may, when the catastrophe comes, restructure, withdraw, or simply be incapable of meeting an obligation of the scale that a Stabroek-level blowout would demand.

THE NUMBERS DO NOT LIE
The Deepwater Horizon disaster in the Gulf of Mexico — a single blowout from a single well — ultimately cost BP in excess of $65 billion USD in cleanup costs, fines, settlements and economic damages. The Stabroek Block contains multiple active deepwater wells operating in one of the world's most ecologically sensitive marine environments, adjacent to Guyana's entire coastline and neighbouring Caribbean states.

The EPA and the Government of Guyana fought in court to limit the financial guarantee for this entire operation to $2 billion USD. Let that figure sit alongside $65 billion and ask yourself: whose interests were being protected?

Liability without enforceability is a promise written on water. It is precisely the function of financial assurance — an unlimited parent company guarantee — to ensure that if Exxon’s subsidiary in Guyana causes catastrophic harm, the parent’s full resources are legally committed to making Guyana whole. That is what was stripped away. The EPA’s statement that liability “remains” is true. The statement that Guyanese citizens are therefore protected is a misdirection of the highest order.

REGULATORY CAPTURE IN PLAIN SIGHT

This episode is perhaps the most explicit illustration yet of what independent analysts, civil society organisations and this publication have long observed: the regulatory framework governing Guyana’s oil sector has been structured not to maximise protections for the Guyanese people, but to minimise friction for the oil companies extracting Guyana’s wealth.

The EPA is not a neutral body that happened to share the same legal position as Exxon. It is the regulator — the institution specifically empowered by law to act as the guardian of Guyana’s environment against the risks posed by exactly this kind of industrial operation. When a regulator joins its regulated company in court to defeat a protection that a judge found appropriate and necessary, something has gone profoundly wrong with the regulatory relationship. That is not a minor procedural matter. It is a fundamental question about whether the EPA serves Guyana or serves the industry it is supposed to oversee.

The Government of Guyana’s presence in the same appeal carries its own implications. The government is, simultaneously, the licensing authority for petroleum operations, a shareholder through its National Resource Fund, and — through the EPA — the environmental regulator of those same operations. When all three capacities align to reduce the financial burden on a foreign oil company, the public is entitled to ask plainly: who in this arrangement speaks for the people of the Essequibo coast, the fishermen of the Demerara, the communities whose livelihoods sit downstream of whatever a blowout would bring?

 “The EPA broke its silence only to celebrate a ruling it helped engineer. That is not transparency. That is a victory lap.”

   THE SILENCE, THEN THE SPIN

It is telling that the EPA “broke its silence” — as it is being characterised — only after the ruling came down in its favour. There was no public communication from the Agency during the period between the High Court’s decision and the Appeal Court’s reversal explaining to the public why it believed an unlimited guarantee was inappropriate. There was no public interest statement. There was no engagement with the civil society voices arguing that unlimited guarantees are the global standard in high-risk offshore operations precisely because the consequences of failure are unlimited in nature.

Instead, the Agency waited for its preferred outcome, and then issued a statement framed not as accountability to the public it serves, but as a public relations exercise designed to pre-empt criticism. “The EPA wishes to make it absolutely clear,” the statement declares, that permit holders remain fully liable. One would wish the EPA had been equally eager to make things absolutely clear before the ruling — when transparency might have invited scrutiny rather than deflected it.

  WHAT MUST NOW BE DEMANDED

The ruling has been made. The court has spoken. The 592 Guardian does not litigate final judgments. But what comes after a ruling matters as much as the ruling itself, and what comes after this one must not be silence dressed as satisfaction.

The National Assembly must now demand a full accounting from the EPA of the basis on which it determined that a $2 billion cap constitutes adequate financial assurance for the Stabroek Block operations. That determination must be made public, subjected to independent technical review, and tested against international benchmarks. The Environmental Protection Act, if it is genuinely silent on the level of financial assurance required — as the Court found — must be amended to speak clearly and ambitiously, not quietly and conveniently.

Civil society, the legal community, and the Opposition must use every available avenue to ensure that the gap between “liability” and “enforceability” does not become the gap through which Guyana’s future is swallowed if the unthinkable occurs. And the EPA must be made to understand — by public pressure if not by institutional conscience — that its mandate is to the Guyanese people, not to the companies whose operations it permits.

Guyana is now an oil-producing nation of genuine global consequence. Its institutions must rise to that consequence. The EPA’s statement this week demonstrated that, so far, they have not.

𝙏𝙝𝙚 592 𝙂𝙪𝙖𝙧𝙙𝙞𝙖𝙣 𝙞𝙨 𝙖𝙣 𝙞𝙣𝙙𝙚𝙥𝙚𝙣𝙙𝙚𝙣𝙩 𝙂𝙪𝙮𝙖𝙣𝙚𝙨𝙚 𝙘𝙤𝙢𝙢𝙚𝙣𝙩𝙖𝙧𝙮 𝙖𝙣𝙙 𝙤𝙥𝙞𝙣𝙞𝙤𝙣 𝙤𝙪𝙩𝙡𝙚𝙩 𝙘𝙤𝙫𝙚𝙧𝙞𝙣𝙜 𝙘𝙞𝙫𝙞𝙘, 𝙥𝙤𝙡𝙞𝙩𝙞𝙘𝙖𝙡, 𝙖𝙣𝙙 𝙧𝙚𝙜𝙞𝙤𝙣𝙖𝙡 𝙖𝙛𝙛𝙖𝙞𝙧𝙨.