Guyana could be heading for environmental and economic disaster

Jan 05, 2021 News

Gas to shore project…

– Int’l lawyer alarmed no EIA done to date

International Lawyer, Melinda Janki

Kaieteur News – While the People’s Progressive Party /Civic (PPP/C) administration has continued where its predecessor left off on establishing a project to bring gas to shore so as to meet the increasing energy demands of the city, some industry stakeholders are now advising against it as they believe the project has the potential to land Guyana in environmental and economic disaster.
During a recent interview on Kaieteur Radio’s programme, Guyana’s Oil and You, International Lawyer, Melinda Janki, bluntly stated that the authorities of the day are actually embarking on a “lunatic project” which will place more massive debt on the backs of Guyanese. According to a 2018 feasibility study that was handed to the former APNU+AFC administration, a whopping US$304M is needed for ExxonMobil and its partners to bring natural gas from the Stabroek block to Guyana’s shores. The feasibility study, which was compiled by Energy Narrative, a US-based market analysis firm, states that out of the US$304M, ExxonMobil would be responsible for US$165M, which will be used for pipeline construction costs. The remaining US$139M for the construction of the onshore infrastructure will have to be financed by the Government of Guyana. Also, Guyana would still have to pay for the transportation of the gas but that price is currently under negotiations between the PPP/C and ExxonMobil.
Further to her concerns about the increase in debt, Janki expressed that the nation is supposed to see an Environmental Impact Assessment (EIA) on the project before thought is given to its execution. Considering that the law requires EIAs to be done for projects of this nature, Janki is of the belief that the gas to shore venture in its current state, is illegal.
The lawyer also contended that Guyanese are yet to see a current economic analysis which shows that this project is economically sound for Guyana in the long run as opposed to going the route of renewable energy. Taking the foregoing factors into consideration, Janki said that the gas to shore project is a foolish proposition.
Also sharing similar sentiments during the radio programme was Tom Sanzillo, Director of financial analysis at the Institute for Energy Economics and Financial Analysis (IEEFA).
During the discussions on Guyana’s proclivity to bring gas to shore in a mere four years, Sanzillo said he can certainly appreciate the nation’s desires to respond to the rising demand for electricity as well as to find a solution to the issue of power outages and high electricity costs.
He stressed, however, that the manner in which Guyana went about negotiating a lopsided deal for oil provides no evidence that it can do otherwise for bringing gas to shore.
The financial expert said, “…I have to be frank about this, the way the contracts were negotiated for this oil endeavour gives me no confidence that the country has any ability to negotiate the best price for a pipeline and other infrastructure to bring gas to shore…There is no evidence of that. In fact, one has evidence to the contrary.”
In addition to this, he said that based on his observations of how Guyana’s leaders intend to pursue the gas to shore project spells out “a recipe for financial bankruptcy for Guyana.”
In this regard, Sanzillo recalled that the leaders have intentions of having ExxonMobil build a pipeline that would allow for the project to be brought to shore.
Guyana would not be paying for the gas but it would have to pay ExxonMobil the cost for transporting the resource.
By subjecting itself to such an arrangement, Sanzillo said that Guyana is 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 debt.
He said that Guyana is not only accepting a lopsided deal with the Stabroek Block but it is now moving to invest in a project that will handsomely support the interests of oil companies and their bankers. This he alluded is not just backward, but a dangerous precipice for Guyana to be hanging from.