Guyana on its way to becoming energy powerhouse – expert

With the strategies that the Guyana Government has laid out and is in various stages of implementing, the country is on its way to becoming an energy powerhouse in the region. But according to one expert, more can be done when it comes to diversifying the economy.
According to analyst at Americas Market Intelligence (AMI) and Africa Market Intelligence (AfMI), Arthur Deakin, Guyana’s surging economic growth on the back of oil and gas production comes at a time when fossil fuels are losing favour among investors and governments.

“In May 2021, the International Energy Agency said that no new fossil fuel projects should be developed if the world aims to get to Net Zero by 2050. Three months later, the United Nations Panel on Climate Change (IPCC) stated that the world can only emit 15 more years of industrial emissions to give it a 50 per cent chance of limiting temperatures to 1.5°C above pre-industrial levels,” Deakin said in a recent missive.
According to the expert, the first solution for Guyana is to diversify its economy in a proactive and thorough manner. Additionally, he said that Guyana can opt to transform itself into a new type of oil & gas producer.
He cited the development of Carbon Capture Storage and Utilisation (CCSU) projects, in which carbon is captured from the air, stored deep underground, and sometimes utilised. According to Deakin, Guyana can develop an energy sector in which fossil fuel production is mixed with CCSU technologies, cleaner power generation, and nature-based solutions.
“This will allow for Guyana’s energy sectors to be preferred over other dirtier, less profitable, and riskier jurisdictions,” Deakin said, although he acknowledged that CCSU projects are still limited and underfunded in Latin America.
“Guyana is no exception. CCSU projects will require large investments from foreign companies and funds to become a reality in emerging economies. To promote CCSU at home, and create a more sustainable oil & gas sector, the Guyanese Government will have to develop business-friendly regulations to attract these types of investments.”
Important to implementing these strategies is an effective framework for regulating the sector. He acknowledged that President Dr Irfaan Ali recently pledged to create the Petroleum Commission by year end.
“While implementing these important regulatory changes, the Government must include incentives for CCSU, renewable energy and nature-based solutions. The path is being charted for Guyana to become an energy powerhouse, but without these strategies, it is “more likely than not” that it will be left behind in this rapidly changing energy sector,” Deakin said.
The Petroleum Commission Bill was initially tabled back in 2017 by then Natural Resources Minister Raphael Trotman during the 11th Parliament. It was to be taken to a Special Select Committee at a later sitting after its second reading. However, it was yet to be passed when the current Government took office last year.
After taking office in August 2020, Vice President Bharrat Jagdeo had indicated that several moves were being made immediately to ensure that the oil and gas sector is effectively managed; and this includes putting skilled persons at the helm of the Commission
Last month, Natural Resources Minister Vickram Bharrat had said that amendments are still being made to the Petroleum Commission Bill, and that the greenlight will soon be given for this document to be re-tabled in the National Assembly.
He had further explained that several faulty sections of the bill are being amended which will also remove the overarching power which the Minister with responsibility for petroleum was given to cause disruption at any time.
In the meantime, work continues towards the construction of a gas-to-shore pipeline and power plant, a game-changing initiative that will see gas from the Liza Field offshore Guyana being pumped onshore to generate power.
The main objective of the initiative is to transport sufficient gas from the Stabroek Block’s petroleum operations to supply some 200-250 megawatts of energy to the national grid, leading to a significant reduction in electricity costs.
Exxon has said that around 30 to 35 million cubic feet of natural gas would be required for the gas-to-shore project. Recently-released data from Norwegian research company Rystad Energy had indicated that less than 20 per cent of the 1.8 billion Barrels of Oil Equivalent (BOE) discovered last year was gas.