(Continuing from last week)
Additionally, apart from good governance and strong political leadership and stability, which is a given to achieve these goals, Guyana needs to address its human capital deficit, infrastructure deficit and high energy cost. By addressing these issues, these of itself can be pioneer developmental strategies wherein Guyana leads the regional integration agenda. Guyana does not only have oil as its attractiveness to foreign investors and underpinning its geopolitical importance, but it is also endowed with an abundance of natural resources including arable agricultural land and potable water. The Caribbean Community alone imports US$ 10 billion in food annually, a significantly important market where Guyana can tap into the opportunity to supply these markets. As a strategy to bridge the human capital deficit gap, a structured immigration policy can be put in place to attract the skills and expertise needed to advance the country’s development agenda through these regional associations as well.
There is also the need for regional capital market development; the need for creative tools and innovative financial products that will align with these development goals for the region need to be examined from a regional and global perspective. As a region and a sub-continent together, the Political Leaders of South American countries need to start examining the need for a South American Development Bank to focus on large scale development projects in the member states. In the long term as well, the need to connect the continent through the construction of railways would be necessary if the leaders of South America are serious about deepened integration of the continent and to cement its role in regional integration in order to conduct business with the rest of the world. To this end, Guyana can become a regional hub for shipping and commerce, mirroring the Dubai and /or the Panama model.
It is against these backgrounds, and the high level of investors’ confidence, both local and foreign, that Guyana’s development outlook is extremely positive. These developments have strategically positioned Guyana to lead a regional integration agenda aimed at strengthening South-South cooperation in South America, Latin America and the Caribbean through the auspices of CARICOM and the other regional trading bloc, inter alia, leveraging the country’s development needs. In these respects, Guyana could become the leader in the region to drive these objectives within the framework of a regional integration agenda.
Natural gas is defined as gas obtained from a natural underground reservoir. It generally contains a large quantity of methane along with heavier hydrocarbons such as ethane, propane, isobutane and normal butane. In the raw state, it also contains considerable amounts of non-hydrocarbons, such as nitrogen, hydrogen suiphide and carbon dioxide. Natural gas is generally used for electric power generation for residential, industrial and commercial use. It is also used as cooking and heating fuel. Of the three fossil fuels used for electric power generation (coal, oil and natural gas), natural gas emits the least carbon dioxide per unit of energy produced. It emits 30% less carbon dioxide than burning oil and 45% less carbon dioxide than burning coal. Burning natural gas also releases lower amounts of nitrogen oxides, sulfur dioxide, particulates and mercury when compared to coal. There are a number of other uses of natural gas in the production of raw materials, for example in manufacturing processes.
Natural gas potential in the Caribbean
Citing an Inter-American Development Bank (IDB) study on ten selected countries in the Caribbean (Guyana included), 74 % of energy demand is met by oil products. The study titled “unveiling natural gas opportunities in the Caribbean”, concluded that the selected countries can develop a gas market by importing Liquified Natural Gas (LNG) or through pipelines. Notably, this study was done in April, 2019, well before Guyana’s natural gas potential was known. It therefore means that this recommendation can be reversed – that is, instead of the selected countries forming a gas market to import LNG from the U.S; Guyana, Suriname, and Trinidad & Tobago can form a regional gas market to export LNG within the Caribbean market. This would certainly be a worthwhile study to now explore given the turn in events.
The study further concluded that the supply options for gas pipelines and LNG are complementary and do not substitute each other. Nevertheless, LNG is likely to be the preferred technology since the results point it as the cheapest technical option to deliver natural gas to the Caribbean. Furthermore, the IDB study noted that LNG is a more mature technology that is technically feasible for all nearly all countries (IDB, 2019). The LNG market may be developed under at least three alternatives that involve individual projects and regional integration.
Individual and regional integration projects are the most feasible in the short and medium term. A natural gas market organized by a distribution hub would allow the maximum number of countries to buy LNG at the lowest price possible. The array would maximize the environmental benefits and reduction in electricity prices for all countries. Moreover, a distribution hub would likely lead to the lowest natural gas prices for all off takers. Aligning off takers incentives might help coordinate timing and contract for natural gas supply, although these steps will still be difficult (IDB, 2019).