Two ways
Kaieteur News – In Robert Frost’s much-loved and much misunderstood The Road Not Taken, the persona in the poem presents a narrative where the basic metaphor is the choice between two possible paths on:
“There were two roads that split in a yellow tree,
And I’m sorry we can’t travel both
Being a long time traveler, I stood… ”
Frost argues for the dilemma presented between the two paths, one trampled, and the other not so thoroughly explored. In the end, the persona chooses:
“Two roads diverted into a forest, and I did—
I took less traveling by… ”
In terms of energy policy, Guyana faces a similar bifurcation of routes: on the one hand, we have the well-worn path of fossil fuels, and the most recent major sale is government plans to establish a facility offshore gas that naturally brings gas from the oil fields operated by Exxon (with the generous cooperation of Exxon of course) offshore Guyana to generate electricity; on the other hand, we continue to make small, tangible steps along the way to renewable energy.
The thing is that the basic arguments for natural gas sound good on paper, but they remain strangely absent any kind of deeper contextual analysis and this is worrying. The main argument is that a unit of electricity generated by natural gas is a fraction of a unit of electricity produced by heavy fuel oil, which is what we currently use to generate the vast majority of our energy needs. This is what Vice President Bharrat Jagdeo refers to as the no-thought logic on choosing to use natural gas to power our electricity generators. However, what is missing is a couple of vital calculations, the most obvious being the exact cost of infrastructure – a pipeline and processing plant. That cost goes into determining the economic viability of whether or not natural gas electricity generation will be cheaper than heavy fuel oil.
Even if the answer is yes, another layer of consideration exists for economic feasibility. In theory, we could build an efficient natural gas pipeline and a much cheaper electricity processing and generation plant as promised but still at a loss given the pure reality of the volume of natural gas produced and how the excess. Our country partner CARICOM, Trinidad and Tobago – a mature producer of oil and gas – uses only eight percent of the natural gas it produces to fuel all of its significant national electricity needs, and sells the balance on the world market. The challenge for Guyana, which currently has a population of around two-thirds of Trinidad’s smaller domestic consumption and therefore nowhere near the industrial capacity of the dual-island republic, in that scenario would be what to do with the excess gas produced. Not only would we have to enter a market that is already dominated by large, more established players, but that we are also trying to establish a viable market share of an increasingly shrinking market. Who do we sell to, at what price and for how long in such a market? How to mitigate the impact of volatility? How do we handle cache storage?
Interestingly, we ourselves contribute to the shrinking market. The Guyana Energy Agency Strategic Plan 2016-2020 sets out:
“Recognizing the need for urgent action, Guyana’s Low Carbon Development Strategy, outlines Guyana’s approach to promoting economic development by protecting Guyana’s tropical forests in tackling climate change globally. This goal is timely; in particular, in light of the recently concluded twenty-first session of the United Nations Framework Convention on Climate Change (UNFCCC) Parties Conference (COP 21) in which developing countries, including Guyana, provided contributions set nationally for limiting emissions to relatively safe levels. One significant and transformative goal under these contributions is the target of 100% electricity generation from renewable energy sources by 2025. This target will not only lead to significant reductions in fossil fuel consumption but will also improve Guyana’s energy security given the need for electricity generation to match the significant growth in electricity demand expected in the coming years, with IDB predictions of electricity consumption more than doubling over the next ten years. “
The document sets out objectives for the transformation of renewable power which includes hydropower, solar power, wind and bioenergy. Over the past few months, the GEA appears to be specific and government in general [still] be committed to this plan, one that appears to have exceeded political administrations given that it is a Granger-Administration document (2015-2020) that sets its goals within the then President Jagdeo’s framework of thought, the Low Carbon Development Strategy. The Agency is currently actively rolling out solar power initiatives across the country and has expressed a commitment to hydropower initiatives including the resuscitation of the Amaila Falls hydropower project.
Logic would insist that the country cannot be simultaneously transitioning to renewable energy primarily for domestic (meaning national) purposes, and the production of fossil-based natural gas electricity at a cheaper price than heavy fuel – rare that we have the economies of scale for one of those routes, much less both. The Head of GEA, Dr. Mahendra Sharma, presented the lofty goals of reducing electricity costs for households and businesses; making Guyana’s energy cost globally competitive; working with Brazil and Suriname to create a new energy corridor; and outline a clear path to becoming a net energy exporter. The question is, are we taking the natural gas route or are we taking the renewable energy path toward these goals?
What should essentially be a binary option, is currently being presented as a emerging schizophrenic policy with one government department taking a gun, the Oilfield of Dreams approach to natural gas (If you build it, the savings come) and the other department takes forward a seemingly solid renewable energy transition plan but one that seems to ignore what is being was sold as a fait accompli with the onshore gas project.
There are two ways ahead in terms of addressing our energy needs in the medium to long term. We cannot travel both and be one traveler or, as we seem to be telegraphing, continue to dive both with different legs, one and the other increasingly. What we need from government is a clear, comprehensive, fact-based plan for how we handle our energy future sensibly and practically, at least in the medium term. Whatever path we decide to take, that will make all the difference.