Exxon gas project in PNG underscores need to release all economic models

Jan 04, 2020 News

An ExxonMobil-led Liquefied Natural Gas (LNG) project in Papua New Guinea has failed to provide the projected economic growth for the people of that Asia-Pacific country. One of the failures noted in a report by Jubilee Australia Research Centre is of an economic model on which the projections were faultily done. Those projections were heavily focused on public discourse in Papua New Guinea, leading up to the approval of the project.

ExxonMobil PNG LNG project

In its report, Jubilee Australia made several recommendations to ensure that the unfortunate duping of Papua New Guinea does not repeat itself.
The authors, Paul Flanagan and Luke Fletcher, stated “Projects should not be approved without the production and release of transparent, verifiable, contestable and independent economic modeling by the Government; this modeling should include a completely new independent model that includes net costs to the budget.”
In Guyana’s case, the country is looking to start up a gas-to-power plant that would revolutionise the energy sector for a people who have long been plagued by blackouts.
Several bodies have drafted economic models for this project, including ExxonMobil, Mitsubishi and the Inter-American Development Bank (IDB). None of those have been published for scrutiny by the general public.
Yet, Government is already working with the contents of those reports.
Meanwhile, the public does not even know how much gas there is in the Stabroek Block.
Kaieteur News has asked ExxonMobil to reveal details on the quantity of gas it has found. But the company claimed that it was still analysing data up to three months ago.
Despite that claim, the company was able to inform the IDB that between 30 and 50 million cubic feet per day of Natural Gas (NG) can be made available for electricity generation in Guyana. It has come to the conclusion that that quantity of gas, taken from the excesses of the Liza-1 project alone, would power Guyana for over 15 years.
Together with Renewable Energy (RE) sources, the Bank said that this could transform the electricity generation sector. Further to this, the Bank said that the use of NG could help to lower carbon emissions and ensure cost savings, while benefiting residential, commercial, and industrial consumers.