Of all the signs, Guyana on stage is one of the great transitions in modern world history: the end of the fossil fuel age. Coal, petroleum and natural gas from the 18th century were used to provide energy to literally fuel the Industrial Revolution. This fundamentally changed the trajectory of human life. At present almost every aspect of modern life we take for granted relies on fossil fuels: food production, transportation, electricity, heating, medicine, communications and information technologies, construction, manufacturing, and most consumer products.
But carbon dioxide, a by-product of burning fossil fuels, had an equally significant negative effect: global warming. This now threatens our existence as a species, unless a dramatic fall creates it. After decades of warnings and uninformed action by the world community, we have reached an inflow point when the proposals for reducing carbon dioxide production by producing energy from “renewable energy” have turned the tide. Economics driving the change: renewable energy is now as cost-effective as focal fuel, but they are less polluting.
The great petroleum playing off our shores (as well as Suriname’s) will probably bring the curtain down on the “fossil fuel era”. While there are several technical studies to support this assessment, ExxonMobil’s recent withdrawal of NY Dow Stock Market’s “Dow Jones Industrials” and the credit rating’s threatened downgrades of all major oil companies is a more pointed indication of where the breeze is. energy is blowing. Of all the signs, we have a window two to three decades before the bottom drops out of the fossil fuel market.
So the Government has made a very wise strategic decision to cooperate with the international oil companies (IOCs) to extract our oil as quickly as possible in order to benefit from the best prices on the market. Although the COVID-19 pandemic has significantly reduced demand for petroleum products – and in parallel with their prices – our “light and sweet” crude commands the highest price in the market, and, along with its extraction costs relatively low, it makes our operations quite viable.
But this window of opportunity must be grasped with both hands to achieve three major strategic goals: first, to achieve low-cost energy self-sufficiency; second, to create a state-of-the-art infrastructure network throughout our country, especially for our interior; and third, diversifying our economy using our comparative advantage in agriculture. Sequencing the onset of these goals is critical, as the third, the desired final state, depends on the first two being successful. It is therefore encouraging to see that this is exactly the course that the Government has embarked upon with alacrity.
On the energy question, we have to balance our consumption of fossil fuels, which currently provides all of our energy, with our transition to renewable energy. The Government has proposed using natural gas from our oil fields to power a power plant in Wales to meet all the energy requirements from our electricity grid. The use of natural gas as opposed to the current heavy fuel is less polluting, and this is an advantage. Concerns were raised about the cost and environmental impact of the project, which we are sure the Government would address. Meanwhile, the Government has noted that wind, solar and water power generation are also on the cards.
Fortunately, natural gas can be combined with nitrogen from the air in an industrial process (Haber Process) to produce urea, which is an essential fertilizer needed for our agricultural diversification. Ways to ease 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 infrastructure transformation.
The agricultural diversification will then proceed, as the agro-processing facilities needed for export markets will be facilitated through cheap energy and improved transportation.
The Government is happy making hay while the (fossil) sun is shining, and it must be supported.
