Guyana's oil sector should fund 'green economy' ; divert fossil fuel cash to climate change resilience - experts
Guyana’s oil revenues should be used to finance the development of renewable energy sources and cash normally spent on fossil fuels should be fund systems that can resist the impact of climate change, say top local and regional officials.
“Anticipated earnings from the oil and gas sector should fund Guyana’s transition to a ‘green economy’ and provide a mechanism for a greenhouse gas set-off to compensate for greenhouse gases emanating from this sector,” Presidential Adviser on the Environment, Retired Rear Admiral Gary Best told a University of Guyana (UG)-organised forum titled “Climate Change: The Guyana Imperative for Prospering in a Climate Altered World.”
He said Guyana would require significant “obligated” public and private financing to address climate change adaptation and mitigation. Best noted that Guyana was on track to ensuring that sufficient funds are made available in this regard, “given the endless debate on what constitutes new and additional financial resources.”
He argued that climate adaptation measures do not yield significant profits and climate financing institutions have not provided new and additional cash, as mandated by the United Nations Framework Convention on Climate Change, causing many countries count overseas development assistance as climate finance contributions.
Best also took issue with the recently introduced insurance mechanism to cover most vulnerable persons against the the “most adverse” effects of climate change. “This is now an insurance mechanism driven and controlled by the developed countries. It is not new and additional climate finance. This is another control mechanism and deviation from public funding of adaptation efforts,” he said.
He noted that an Adaptation Fund, which should have been funded by public funds as a key adaptation bank, has been overtaken by a Green Climate Fund now being capitalised through significant private sources.
The Caribbean Community’s (Caricom) Programme Manager for Energy, Dr. Devon Gardner added that Guyana and other Caribbean countries should not depend need to generate a renewable energy plan that could allow them to divert a lot of their fossil fuel expenses to developing infrastructure and other systems that can resist the impact of climate change.
Gardner he said Guyana has the capacity to produce bio-energy at 12-13 US cents per kilowatt hour, solar energy and small hydro-power stations. “A system that is properly planned and a system that is suitably designed can in fact just not just mitigate greenhouse gas emissions but really derive a greater benefit, that of adaptation,” he said.
Gardner agreed with Best that the region could no longer depend on the international community to pay for climate adaptation. “We must find ways of means of being able to raise resources from within our internal structures that can support some of our adaptation plans and the place to find much of those resources is in the energy sector because the energy sector is where most of our economies bleed,” the Caricom Secretariat official told the 10th Turkeyen Tain Talks named after UG’s campuses in Georgetown and Berbice.
The Caricom Programme Manager on Energy noted that energy costs are up to 29 percent of Gross Domestic Product (GDP) in some countries, and in the case of Guyana, energy imports last year accounted for 24 percent of GDP.
He also highlighted the vulnerability of the Caribbean to higher oil prices as a result of hurricanes that slam the Gulf of Mexico, further depleting the region of much needed foreign exchange that should be spent on social sector development, salaries and develop infrastructure that could withstand the effects of climate change. “If the system is properly designed, those numbers can in fact go down to the extent where much of that money that is being spent on energy imports could be channeled elsewhere to design the kind of agricultural systems that are more adaptable to climate change to improve some of the coastal infrastructure to make them more resilient to climate change to the flooding that is likely to come and to the countries of the Caribbean where hurricanes are obviously an issue,” he said.
Finance Minister, Winston Jordan, in delivering his 2018 National Budget speech last week in the House, said already the installation of solar photovoltaic panels on 70 government buildings, including ministries, schools, and health centres, has resulted in a 1.86 gigawatt of power savings. Last year, government also installed 10,427 LED lamps and 3,766 motion-sensors across 46 buildings
Government intends to next year install more panels on 74 additional buildings and an additional 10,610 lamps and 1,486 motion sensors, all of which Jordan said could save taxpayers GY$45.5 million per year in energy costs.
In conclusion, Gardner said the region needs the 3Ps- Prioritization, Planning and Partnership- to build energy resilience.
Turkeyen and Tain Talks: Guyana's Emerging Oil & Gas Sector
The University of Guyana’s Turkeyen and Tain Talks held its seventh meeting in New Amsterdam, Berbice on Wednesday, on Guyana’s emerging oil and gas economy.
Present at the talks were Director of the University of Guyana, Berbice Campus and Vice Chancellor of the University of Guyana, Professor Ivelaw Griffith and Minister of Natural Resources Raphael Trotman among others.
According to GINA, Minister Trotman told the students and other persons gathered for the Turkeyen and Tain talks that the potential they have heard that Guyana has is real. The Minister noted that the oil which was discovered in 2015 is estimated to have a minimum of 800 million barrels and a maximum of 1.4 billion barrels of oil.
Minister Trotman also made those gathered aware that in addition to the first discovery of oil, there have been two more which may not be as large as the first, but are considered to have a significant amount of oil. Production of the oil is expected to begin in 2020 by ExxonMobil, Hess Corporation and Nexen companies.
Strengthening legal framework
Minister Trotman noted that with the discovery of such a large quantity of oil and gas, the government thought it necessary to strengthen its legal framework. The Minister pointed out that unless there are systems in place, Guyana would not be in a position to handle production and benefits of oil production. Hence, Minister Trotman noted that the government has begun the process of reviewing Guyana’s Petroleum Act of 1986 which he said is quite dated.
Minister Trotman also pointed out that in addition to reviewing the Petroleum Act; the government is creating new laws. Two new laws have already been created, he said. This includes the Sovereign Wealth Fund which is with the Minister of Finance, and the Petroleum Commission Bill which was recently read for the first time in the National Assembly.
Kiran Mattai, Oil and Gas Attorney stressed the importance of having the necessary laws in place that relate to the oil and gas sector. According to Mattai, with Guyana being an emerging economy and oil and gas economy, it needs to be able to appreciate the ownership of its resources while encouraging international relationships. Legal training she said “must account for the host country discovering the oil and the company exploring for oil.”
She highlighted, “For legal training, the lesson in preparing for oil and gas is recognising that oil and gas is only a piece of the puzzle; there must be complementary interdependence to achieve sustainability.”
According to GINA, Professor and Director of the Institute of Applied Science and Technology, Suresh Narine stressed the importance of training. He noted that while training may take five to seven years, with Guyana expecting to receive oil by 2020, it is something that must be pursued.
According to Professor Narine, nothing is wrong in accepting that Guyana has poorly trained business people, engineers and scientists. In order to fully benefit from the wealth expected to come, Guyanese have to divorce themselves from thinking that all roads to success are paved with intentions on oil and gas.
“We have to ourselves, begin to train our students, advice our children, create our businesses in ways that look at those other sectors of the economy,” Narine explained.
However, Dr. Narine pointed out that there is (the) need for effective policies that will give the necessary guidance. He stated that, “without policy that allows the oil revenue to be channelled in an equitable, thoughtful fashion, the capital to ensure that those sectors of our economy which are more sustainable than oil is created, is not going to be wisely spent.”
- The University of Guyana