Two roads

Apr 07, 2021 Editorial

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Kaieteur News – In Robert Frost’s much loved, much quoted and much misunderstood ‘The Road Not Taken’, the persona in the poem presents a narrative in which the underlying metaphor is the choice between two possible pathways forward:
“Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood…”
Frost makes the case for the dilemma presented between the two pathways, one well-trodden, the other not as significantly explored. In the end, the persona chooses:
“Two roads diverged in a wood, and I—
I took the one less traveled by…”
When it comes to energy policy, Guyana faces a similar bifurcation of pathways: on the one hand, we have the well-worn path of fossil fuels, with the most recent big sell being government’s plans to establish a gas to shore facility that brings natural gas from the Exxon-operated oil fields (with the generous cooperation of Exxon of course) offshore Guyana to generate electricity; on the other, we continue to take tangible if tiny steps along the road to renewable energy.
The thing is that the basic arguments for natural gas sound good on paper, but they continue to be curiously absent any sort of deeper contextual analysis and this is worrying. The main argument is that a unit of electricity produced by natural gas is a fraction of a unit of electricity produced by heavy fuel oil, which is what we are currently using to produce the vast majority of our energy needs. This is what Vice President Bharrat Jagdeo refers to as the no-brainer logic on choosing to use natural gas to fuel our electricity generators. What is missing however are a couple of crucial calculations, the most obvious one being what the exact infrastructural cost – pipeline and processing plant – is going to be. That cost is going to determine the economic viability of whether or when natural gas electricity generation will be indeed cheaper than heavy fuel oil.
Even if the answer is yes, there exists yet another layer of consideration for economic feasibility. In theory, we could build an efficient natural gas pipeline and processing plant and produce significantly cheaper electricity as promised yet still end up at a loss considering the sheer reality of the volume of natural gas produced and how the excess is handled. Our fellow CARICOM country, 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 considerable national electricity needs, and sells the balance on the world market. The challenge for Guyana, currently with a population just about two thirds of Trinidad’s hence smaller domestic consumption and nowhere near the twin island republic’s industrial capacity, would in that scenario be what to do with the excess gas produced. It isn’t merely that we would have to enter a market that is already dominated by major, more established players, but that we are also seeking to establish viable marketshare of an increasingly shrinking market. Who are we selling to, at what price and for how long in such a market? How do we mitigate the impact of volatility? How do we handle storage in a glut?
Interestingly enough, we are ourselves contributing to that shrinking market. The Guyana Energy Agency’s Strategic Plan, 2016-2020, notes:
“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 while addressing global climate change. This goal is a timely one; particularly, in light of the recently concluded twenty-first session of the Conference of the Parties (COP 21) of the United Nations Framework Convention on Climate Change (UNFCCC) where developing countries, including Guyana, provided nationally determined contributions for limiting emissions to relatively safe levels. One significant and transformative goal under these contributions is the target of having 100% of electricity generation from renewable energy sources by 2025. This target will not only result in significant reductions in the consumption of fossil fuel but also improve Guyana’s energy security given the need for electricity generation to match the significant growth in electricity demand that is expected in the coming years, with IDB’s predictions of electricity consumption more than doubling in the next ten years.”
In the document, objectives are set out for a renewable power transition that includes hydropower, solar power, wind and bioenergy. In the past few months, the GEA specifically and the government in general, seem to [still] be committed to this plan, one that appears to have transcended political administrations considering that it is a Granger-administration (2015-2020) document that sets its goals within the framework of then President Jagdeo’s brainchild, the Low Carbon Development Strategy. The Agency is currently enthusiastically rolling out solar power initiatives all over the country and has expressed commitment to hydropower initiatives including the resuscitation of the ill-fated Amaila Falls Hydropower project.
Logic would dictate that the country cannot be simultaneously transitioning in the short term to primarily renewable energy for domestic (meaning national) purposes, and fossil-based natural gas electricity generation at a cheaper price than heavy fuel – we barely have the economy of scale for one of those pathways, much less both. The GEA Head, Dr. Mahendra Sharma, has put forward the lofty goals of reduction of 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 outlining a clear path to becoming a net energy exporter. The question is, are we taking the natural gas pathway or are we taking the renewable energy pathway towards these goals?
What in essence really should be a binary choice, at present is being presented as seemingly schizophrenic policy with one section of government taking a gung ho, Oilfield of Dreams approach to natural gas (If you build it, the savings will come) and the other section forging ahead with a seemingly sound renewable energy transition plan but one that appears to completely ignore what is being sold as a fait accompli with the gas to shore project.
Two roads are before us when it comes to addressing our energy needs over the medium to long term. We cannot travel both and be one traveler or, as we seem to be telegraphing, continue to straddle both with different legs, one increasingly at odds with the other. What we need from government is a clear, comprehensive, fact-based plan to how we sensibly and practically handle our energy future, at the very least in the medium term. Whatever path we decide to take, that will make all the difference.

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