National Review

Climate change and oil drilling 

Ahead of his departure to Glasgow, Scotland, to attend the 2021 United Nations Climate Change Conference, also known as COP26, Prime Minister Philip Brave Davis told National Review that his government’s policy on oil drilling in Bahamian waters would be shaped by the outcome of the global summit.

This issue did not feature prominently in the recent campaign, but Davis shared his views on oil drilling one year ago when he was leader of the official opposition.

Davis said at the time his administration’s policy position on the matter would be clear.

He said a Progressive Liberal Party (PLP) administration would be supportive of drilling for oil in Bahamian waters if two key questions are positively answered: “My position would be – first of all, I was part of the regime that transformed the archaic law as it relates to oil drilling and once the law is complied with, the question that I would ask myself is whether it could be done in a sustainable and environmentally friendly way; and if that answer is yes, the second question I would ask myself is if the arrangements that would be entered into with the developer, if that is going to have significant benefits to the Bahamian economy and its people, and once those two key elements are in place, why not drill?”

Davis suggested there is a widespread misperception about the level of risk attached to oil drilling.

“Etched in many of our minds when we hear about oil drilling is this picture from these cowboy movies where people drill for oil and once they hit the oil it is gushing out of the ground,” he said. “That’s the only picture we have about drilling, but that’s not the case anymore because of the modernization of drilling today.”

How will this so-called modernization of drilling impact decisions pertaining to any further drilling in our waters?

Challenger Energy Group PLC (formerly Bahamas Petroleum Company) said last month it was still negotiating to extend its leases in The Bahamas for another three years,  adding that it has relinquished the lease for the Miami license in the northern Bahamas.

While earlier this year the company failed to find commercial quantities of oil at its Bahamas test site Perseverance-1, which cost the company $45 million, the company’s chief executive officer Eytan Uliel said in September there remained the distinct possibility of commercial quantities of oil within the remaining four license areas in the southern Bahamas.

“As I have observed in other forums, we had hoped for ‘instant gratification’ with Perseverance-1, which was not the case. However, it is important to remember that in our industry, several exploration wells are often required before the potential of a frontier basin is unlocked, and based on what we have learned from Perseverance-1, we continue to believe that our licenses in The Bahamas are prospective,” Uliel said.

“We have thus shifted our focus to the future of this project: (i) renewing the licenses into a third, three-year exploration period, and (ii) securing a partner – ideally a large industry player – to provide expertise and capital for the next phase of activity.”

It has not yet been revealed how the new administration will address this issue.

 It will be difficult for the now prime minister to dodge conflict of interest claims in this regard.

Davis, an attorney, said last December he represented BPC as it was attempting to secure licenses under the first Christie administration, which it eventually secured. He was not in Cabinet at the time.

“There was no conflict, but you know how our politics operates, because I’m PLP and I’m in the House and I represent this company. I didn’t need that, so I told my clients that they need to find other lawyers and they went and found other lawyers,” he said.

Ahead of the 2012 general election, then Prime Minister Hubert Ingraham revealed that Davis and then PLP Leader Perry Christie, also an attorney, had both had ties to Bahamas Petroleum Company (BPC).

Christie, hitting back at conflict claims, promised to hold a referendum on oil drilling if elected. He was elected, but he did not follow through on that pledge.

We asked Davis last year whether this is an issue his administration would put to a referendum. He said, “You just have to follow what the law is, what the Petroleum Act says, and what the regulations say and once you conform to those, you let the rule of law run its course and the law doesn’t call for a referendum.”

Dr. Hubert Minnis (the now former prime minister) had been extremely critical of the Christie administration’s stated position on a referendum, insisting that the government, not the electorate, needed to make a decision on the matter.

Davis said that as deputy prime minister it was his view that updated legislation on this issue was critically needed before BPC was allowed to proceed with anything it wanted to do.

In 2016, the Petroleum Act was passed and the Petroleum Offshore Environmental Planning and Protection regulations were promulgated – mandating, among other requirements, that BPC secure an application for an environmental authorization in order to proceed with its project.

That authorization was granted in February 2020 and was the subject of a legal challenge mounted last year by environmental groups Waterkeeper Bahamas Ltd. and Save the Bays. The case has since been discontinued. 

Minnis said last December he was totally against oil drilling and his government was only allowing BPC to go ahead with the drilling because it could not legally get out of the commitment previous administrations made to the company.

Davis believes Minnis’ explanation was a cop out, however.

“I think he is just pandering to the politics of the issue,” he said in December.

“He wants to be on the side that suggests that he is environmentally friendly, but what you can call upon him to do is to be more transparent in what he is doing.”

He added, “I would have expected that the government would have renewed the arrangements or extended the arrangements to allow them to be in a position where they are drilling now. So they (the government) can’t say that they were stuck by anything because … they had sufficient input in this to decide what they want to do or not do, and if they agreed for them to go and drill, well that was the position of the government.

“They should not be pointing a finger at any place else or at anyone else.”

Davis at the time called on the Minnis administration to make public all agreements The Bahamas government entered into with BPC, including extensions on licenses, and the legal opinion it proceeded on in its conclusion that there was no way the government could break its agreement with the company.

Then Attorney General Carl Bethel said the licensing agreements “are not public documents”.

Davis seemed equally astounded as we were by that statement, saying such agreements are structured based on statutory requirements and are public documents.

We asked him why agreements and extensions provided by the Christie administration cannot be readily accessed by the public.

Davis said as he was not in Cabinet at the time the licensing agreements were entered into, he could not speak specifically to the matter.

Last month, environmental activists urged the new administration to implement a ban on oil drilling in Bahamian waters.

At a youth forum in Glasgow this week, Minister of State for the Environment Basil McIntosh had an embarrassing showing, clearly seeking to “flam” his way through as he represented The Bahamas.

Asked about the oil drilling issue, he asked the moderator why she was “putting me on the spot”.

He then said, “You just said, we are a new government, just elected to office. I cannot answer that question directly right now because we don’t know. We need to evaluate, see what was done prior to us getting in office. Once we understand what was happening then we can make a decision as to the road we should take.”

In Glasgow, Davis was also asked about his government’s position on drilling for oil in Bahamian waters. 

He said, “Drilling in and of itself does not necessarily mean exploitation. If you drill and find, you could monetize the find without exploiting it. But for right now, what we are doing, what I am considering is the replacement of the thought of drilling with monetizing our carbon credits.”

Many will be watching to see how the Davis administration addresses this issue, especially in light of Davis’ previous backing of oil drilling, his call for transparency and his commitment to secure a more environmentally protected future for The Bahamas. 

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Candia Dames

Candia Dames is the executive editor of The Nassau Guardian.

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