From all indications, Guyana is on centre stage in one of the great transitions in modern world history: the end of the fossil fuel age. Coal, petroleum and natural gases were used from the 18th century to provide energy to literally fuel the Industrial Revolution. This fundamentally changed the trajectory of human life. Almost every aspect of modern life that we take for granted currently depends on fossil fuels: food production, transportation, electricity, heating, medicine, communication and information technologies, construction, manufacturing, and most consumer products.
But carbon dioxide, a byproduct of fossil fuel- combustion, precipitated a just-as-significant negative impact: global warming. This is now threatening our existence as a species, unless there is a dramatic reduction in its creation. After decades of warnings and desultory action by the world community, we have reached an inflection point when the recommendations for reducing the production of carbon dioxide through generating energy from “renewables” have cumulatively turned the tide. The change was driven by economics: renewables are now as cost effective as focal fuels, but are less polluting.
The great petroleum plays off our shores (as well as Suriname’s) will in all likelihood bring the curtain down on the “fossil fuel age”. While there are numerous technical studies for supporting this assessment, the recent removal of ExxonMobil from the “Dow Jones Industrials” of the NY Stock Market and the threatened downgrades of the credit rating of all the major oil companies are a more pointed signal of where the energy breeze is blowing. From all indications, we have a two-to-three-decade window before the bottom falls out of the fossil fuel market.
The Government has therefore made a very wise strategic decision to collaborate with the international oil companies (IOCs) to extract our oil as quickly as possible to benefit from the best market prices. While the COVID-19 pandemic has reduced demand for petroleum products drastically – and concomitantly their prices – our “light and sweet” crude commands the highest price in the market, and, combined with its comparatively low extraction costs, makes our operations quite viable.
But this window of opportunity must be seized with both hands to accomplish three major strategic goals: first, to achieve low-cost energy self-sufficiency; second, to create a world class infrastructural network across our country, especially into our interior; and third, to diversify our economy using our comparative advantage in agriculture. Sequencing the embarkation of these goals is critical, since the third, which is the desired end state, depends on the first two being successful. It is therefore quite heartening to see that this is exactly the course the Government has embarked on with alacrity.
On the energy question, we have to balance our use of fossil fuels, which presently provide all our energy, with our transition to renewables. The Government has proposed to utilise natural gas from our oil fields to fuel a power plant at Wales to satisfy all the energy demands from our electricity grid. The use of natural gas rather than the present heavy fuel is less polluting, and this is a plus. There have been concerns raised both about the cost and environmental impact of the project, and we are sure the Government would address these. In the meantime, the Government has indicated that wind, solar and water power generation are also on the cards.
Fortuitously, natural gas can be combined with nitrogen from the air in an industrial process (Haber Process) to produce urea, which is a vital fertilizer needed for our agricultural diversification. The roads to ease the congestion into Georgetown, the Linden Highway, the bridges across the Demerara and Corentyne Rivers, a second West Coast Highway and a new inland city are the backbone of the infrastructural transformation.
The agricultural diversification will then proceed, since the agro-processing facilities needed for export markets will be facilitated through cheap energy and better transportation.
The Government is happily making hay while the (fossil) sun shines, and must be supported.
