Guyana could be heading for an environmental and economic disaster
Gas to shore project …
– Int’l lawyer has not been scared of any EIA done so far
International Lawyer, Melinda Janki
Kaieteur News – While the People’s Party / Civic Progressive Party (PPP / C) administration has continued where its predecessor left to set up a project to bring gas to shore to meet the city’s growing energy demands, some industry stakeholders are now advising . against it as they believe the project has the potential to land Guyana in an environmental and economic disaster.
During a recent interview on Kaieteur Radio program, Guyinda’s Oil and You, International Solicitor Melinda Janki, pointed out that the authorities of the day are actually embarking on a “moon project” that will put more massive debt on backs Guyanese. According to a 2018 feasibility study given to the former APNU + AFC administration, ExxonMobil and its partners need a staggering US $ 304M to bring natural gas from the Stabroek block to Guyana’s shores. The feasibility study, compiled by Energy Narrative, a US market analysis firm, indicates that ExxonMobil out of the US $ 304M would be responsible for US $ 165M, which will be used for pipeline construction costs. The Government of Guyana will have to fund the remaining US $ 139M for the construction of the onshore infrastructure. Also, Guyana would still have to pay for transporting the gas but that price is currently under negotiation between the PPP / C and ExxonMobil.
In addition to her concerns about the rise in debt, Janki expressed that the nation was due to see an Environmental Impact Assessment (EIA) on the project before considering implementation. Given that the law requires EIAs to be made for projects of this nature, Janki considers that the gas-to-shore enterprise in its current state, is illegal.
The lawyer also argued that Guyanese has not yet seen a current economic analysis showing that this project is economically sound for Guyana in the long run rather than pursuing renewable energy. Taking into account the above factors, Janki said the onshore gas project was a foolish proposition.
Also sharing similar sentiments during the radio program was Tom Sanzillo, Director of financial analysis at the Institute of Energy Economics and Financial Analysis (IEEFA).
During negotiations on Guyana’s acquisition of gas in just four years, Sanzillo said he can certainly appreciate the nation’s aspirations to respond to growing demand for electricity as well as finding a solution to the issue of high power cuts and electricity costs.
He stressed, however, that Guyana’s handling of a top deal for oil provides no evidence that he can do otherwise for bringing gas to shore.
The financial expert said, “… I have to be honest about this, the way the contracts for this oil effort were negotiated gives me no confidence that the country has any ability to negotiate the best price for a pipeline and other infrastructure to bring gas up … There is no evidence of that. In fact, one has evidence to the contrary. ”
In addition, he said, based on his observations of how Guyana’s leaders plan to pursue the gas-to-shore project setting out “a recipe for financial bankruptcy for Guyana.”
In this regard, Sanzillo recalled that leaders had intentions of getting ExxonMobil to build a pipeline that would allow the project to be brought ashore.
Guyana would not pay for the gas but would have to bear the cost of transporting the resource to ExxonMobil.
By being subject to such an arrangement, Sanzillo said Guyana was in simple terms, taking the little oil money it would make and investing it in another fossil fuel project that would leave the country saddled with more of debt.
He said Guyana not only accepted a top-notch deal with the Stabroek Block but was now moving to invest in a project that will handsomely support the interests of oil companies and their bankers. What he referred to is not only backwards, but a dangerous sediment for Guyana to hang from.