Guyana will “green” its grid in the future

Dear Editor,
The PPP/C Government recognises the appeal of its newfound treasure and has vouched that its future oil contracts will generate more profits for the Government and the people of Guyana also recognising the need to pump out as much oil as possible while “there is still demand” for fossil fuels. While some feel we are faced with a “Catch 22”: accelerating oil production and increasing oil profits, while at the same time depending on changing energy demand and companies seeking to maximise their shareholder returns.
It is no secret that Guyana boasts some of the world’s most economic offshore fields, now our Government must navigate how to produce them in a “world” that is asking for oil producers to pull back.
Guyana’s prized green fields have emerged against a backdrop of mounting pressure to decarbonise the world’s energy supply in a bid to curb climate change.
However, Vice President Bharrat Jagdeo defended Guyana’s position at the Offshore Technology Conference (OTC) in Houston when he spoke about the juxtaposition while telling attendees at the industry conference that with over 85 per cent forest cover, Guyana is “already a net-zero emitter” and added, “Where the world is trying to get to by 2050, Guyana is already there.”
Despite this, there are voices from within Guyana and from environmental groups around the world imploring our Government to halt future offshore development, which “We believe it’s totally unfair,” said Jagdeo, who rejects the “leave it in the ground” argument.
He emphasised that Guyana has a “legitimate expectation” to achieve prosperity after highlighting that per capita income in the country is around $6000—one of the lowest such figures in the western hemisphere. Guyana’s Government wants to raise the income benchmark to $30,000 in the coming years, something that won’t happen without oil and gas revenue.
Trying keep Guyana on the side lines only benefits those countries already participating in global oil trade. “Why should we not want to displace some of the higher-cost producers in the world? We want to share in that market,” the Vice President said.
As Guyana seeks to ramp up oil production by about tenfold in the coming years, it is also looking to establish new terms for future licensing agreements. Our Vice President outlined some of the recently adopted licensing changes along with some of the proposed changes:
President Ali recognises the urgency of the situation, as he recently pledged to create the Petroleum Commission by year’s end. While implementing these important regulatory changes, Our PPP/C Government will include incentives for CCSU, renewable energy and nature-based solutions. The path is being charted for Guyana to become an energy powerhouse.
Another top priority for our Government is to pursue what our Vice President called “an aggressive local content strategy.”
Our country doesn’t have the capacity to build FPSOs, but it can turn out more welders and absorb more of the offshore logistics and support business. Our Government is trying to bolster local participation in these areas by improving access to universities and trade schools.
For its part, since making its first discovery 6 years ago, the ExxonMobil-led consortium reports spending nearly half a billion dollars on goods and services from hundreds of Guyanese vendors.
An ExxonMobil Executive speaking later at OTC shared that the international major employs 2800 Guyanese nationals, including about 500 women. This represents 50 per cent the workforce supporting Guyana’s first two offshore projects. The consortium is also backing a $100-million initiative to fund local education, health, and economic-development projects across the country.
Another project aimed at improving the quality of life in Guyana plans to bring offshore gas via a 160-km pipeline to an onshore power plant. Proposed by ExxonMobil and the PPP/C Government last year, the gas-fired power plant would be the nation’s first.
Like several of our neighbours in the Caribbean region, Guyana is wholly dependent on bunker fuel for power generation. Our country’s generators are not only unreliable but also are the reason why Guyana has some of the highest electricity rates in South America—around $0.30 per kWh, a price that is “debilitating for industry and for people.” of Guyana
Our Government is looking into what it would cost to build new hydroelectric plants and solar farms, but the gas-to-power project is considered a bigger priority. While construction has yet to begin, ExxonMobil’s subsea pipeline as proposed would carry enough gas to generate up to 250 MW, more than double Guyana’s current 120 MW installed capacity.
Some people are saying our Government shouldn’t do it, but those who are criticising the gas-to-power project for running afoul of global climate goals cannot see the long-term vision of our People’s Progressive Party/Civic Government, this gas-to-power project will make a big difference in the lives of many not just Guyanese but investors, and it can catalyse a whole series of new industries.
Guyana continues to diversify its economy in a proactive and through manner and transform itself into a new type of oil & gas producer: one 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.
Our Government will ensure that these strategies will also be accompanied by a more transparent and accountable Government while complementing all these strategies with the development of renewable energy sources to sustain its growing energy demand. Historically, Guyana has been reliant on diesel and heavy fuel oil to power its economy, which not only emit more carbon emissions but are also more expensive. By developing our wind resources along the Atlantic shoreline, installing solar panels in the hinterland, and developing a large-scale hydro project, Guyana will “green” its grid in the future. Our country will also capitalise on the large offshore gas discoveries by developing a gas-to-shore plant that produces cheaper and cleaner power that can be dispatched quickly to back up renewable energy, allowing Guyana to play an important role in the Emerging Green Energy Transition.

Sincerely,
David Adams