Exxon should be incentivised to produce more gas in Guyana

Dear Editor,
Guyana needs cheap gas to fire power-generating plants. One plant is due for completion by end of 2025, and more are being considered. Exxon can supply all the country’s gas needs for electrical power-generation, and should be incentivised to produce more gas.
Burning gas emits virtually no carbon, and is ideal for clean air. Carbon emissions are not a major problem for Guyana; carbon emissions are the outcome of using fossil fuels (petroleum or oil) to generate electricity and power vehicles, and for cooking. Currently, almost all of Guyana’s electricity is produced from burning diesel and wood. Burning gas (for cooking or generating power) also emits carbon, but significantly less than diesel, gasolene, kerosene, wood, and charcoal.
The release of carbon from burning fossil fuels warms up the earth’s atmosphere and adds to pollution and bad air quality. Every effort should be made by all countries to reduce their carbon footprint — the amount of carbon emitted.
Guyana can get to near zero emissions by turning to green energy (solar, wind, and gas), which is the pathway to decarbonise the country. ExxonMobil (EM), which produces oil, has an important role in moving the country towards green energy: by making available clean gas (from oil production) to fire electrical plants, and even for domestic use. It is noted that gas-driven energy is known to be cheaper than diesel-generated electricity. And right now, high diesel and wood-burning energy cost makes it challenging to drive domestic offtake industries. Cheaper gas-generated electricity is urgently needed. This is where Exxon’s presence in producing oil off shore is so critical for generation of cheaper energy in Guyana to facilitate industrial development.
Currently, Exxon is producing about 650,000 bpd oil, with an additional 200K next year and by 2027 some 1.2M bpd. Aside from earning revenues, production of oil necessarily involves gas, which is trapped and re-inserted into wells or the oil reservoir. The more oil produced, pulled up from under the ocean floor, the more gas is available, coming up with the oil. The gas can be monetized or used for other purposes, or even sold.
Exxon has agreed to capture and supply some of the gas to power an electrical plant at Wales, to produce some 300MW of energy. Exxon signed an agreement to transport the gas via pipe on the ocean floor to West Coast (Vreed-en-Hoop area) from where it would be further transported by pipes on land to Wales to supply gas to the power station. The media reported that Exxon completed its part of the project to supply gas over six months ago, and is waiting to tie in the gas to storage facilities at Wales that would supply the power station to generate cheaper power than currently obtains. Instead of abusing or attacking the oil giant and telling it to pack up and leave, Exxon should be encouraged to produce more gas for Guyana’s industrial development.
That gas-fired power project at Wales was supposed to be up and running by end of 2024, but the completion of the project was mired in a dispute over US$50M that is in arbitration. The dispute is expected to be settled early next year, and it would result in the completion of the power station. Once that is ready, Exxon would begin supplying gas to generate electricity.
Gas-powered energy produces significantly less carbon emission than diesel. The gas-fired power plant does not mean that Guyana would cease producing diesel-generated power. As standard of living increased over the years, demand for power has been growing, while supply has not been keeping pace. That is why there have been blackouts or rolling supply of electricity. GPL has not been able to keep up with rising demand. Diesel plants and two heavy oil-fired power ships have been contracted to generate electricity to meet demand, and even that may not be sufficient.
At any rate, ship-floating power-generating plants are not an efficient way to produce electricity, and they leave behind a lot of carbon footprint. Gas-powered plants are more efficient, with minimal carbon emission. It is also noted that gas energy cost is substantially less than diesel-generated energy. Such gas-powered plants would lower the cost of energy, making it attractive to private investment for petroleum and gas-related products like fertilizer, creams, etc. That is why the Wales Power Generating Plant and Exxon’s supply of gas are critically important to the economy.
Exxon can supply gas for multiple power-generating plants, and even (bottling of) gas for domestic use (cooking); and perhaps even exporting gas if available in large quantity, keeping in mind that gas must also be re-injected into the oil reservoir. The daunting economics of financing such a project may be an impediment for Guyana, but not for Exxon to finance such a green energy project. Government should consult with Exxon on this emerging sector (economics of bottling gas).
And another gas-fired power generating plant, perhaps on the Corentyne, should be immediately considered. And the oil company should be nudged into increasing production of oil and gas, which would result in greater revenues for Guyana.

Yours truly,
Vishnu Bisram