Guyanese still to feel positive economic impact from oil

Nov 13, 2021 News

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…as ExxonMobil’s operations endanger country’s key industries—Report finds

By Chris Arsenault

Kaieteur News – The capital of Guyana, Georgetown, has yet to reflect its burgeoning fortunes. Deep puddles of water pool on pot-marked roads. Key heritage buildings are in sore need of fresh paint, and minimum wage workers toil for just over $1 an hour.

This was the assessment as reported by Al Jazeera News—the most widely circulated news agency in the Middle East including, Dubai—which in its most recent report on Guyana observed that the country saw some of the planet’s fastest economic growth last year: more than 43 percent, according to the World Bank, as new offshore fields started production.
According to the Al Jazeera News report, Guyana’s drive to develop its oil wealth is colliding with the threat climate change is posing to its future.
It was noted that earlier this year, devastating floods wrecked crops and destroyed thousands of homes.
This publication also recently reported rising sea levels that threaten Georgetown as one of nine major world cities forecast to be under water by 2030 if greenhouse gas emissions continue to rise at their current rate, according to the research group Climate Central.
As world leaders wrap up United Nations climate negotiations in Glasgow, Scotland, this week, it was observed that Guyana is attempting to strike a delicate balance between extracting oil to lift people out of poverty and combatting the climate crisis.
“We are a poor country; we’re developing. We have a resource; we have to capitalize on it,” said Kemraj Parsram, Executive Director of the Environmental Protection Agency (EPA), the government body responsible for safeguarding ecosystems.
“At the same time, we can maintain and achieve international [climate] obligations and maintain net-zero [carbon emissions],” he told Al Jazeera during an interview at his office in the capital.
Investing for the future
With more than 40 percent of its population living on less than US$5.50 per day, according to the World Bank, Guyana has played a minimal role in causing climate change and its officials say Guyana can extract billions of barrels of oil, while maintaining net-zero carbon emissions due to its vast rainforests, which suck carbon dioxide from the atmosphere.

Regardless of whether that accounting proves to be accurate, environmentalists worry that Guyana is joining the black gold business, in the waning days of the petroleum era, with dangerous consequences for its climate and long-term economic prospects. Others proffer that the demand for oil will continue for an extended period into the future.
Only recently, Vice President, Bharrat Jagdeo noted that even at 2050 when the world is aiming to reach its net zero emissions, there will still be a demand for some 24 million barrels of oil daily, and that Guyana must not be left out of the supply chain.
“It’s like going into the telegraph business now when we are talking about 5G cellular,” Martin Dietrich Brauch, a senior economics researcher with Columbia University’s Center on Sustainable Investment, told Al Jazeera of Guyana’s move into offshore oil drilling.
“It’s a technology we know will need to be phased out. This is the key issue for Guyana: is it worth entering this now with huge investments that will be impossible to maintain after 2050?”
Under current emissions reduction pledges from countries at the Glasgow summit, the planet is expected to warm by 2.4 degrees Celsius by 2100, the Climate Action Tracker research group reported this week.
That’s far above the 1.5-degree limit scientists say the world must meet to avert the most devastating impacts of climate change.
Tapping vast new oil deposits simply isn’t viable, according to the scientific consensus, if the world is to avoid climate catastrophe.
Guyana has every right to develop its economy and infrastructure, Brauch said, but even putting the climate crisis aside, going hard on renewable energy now makes more long-term economic sense than pouring billions of dollars into oil infrastructure.
ExxonMobil, the biggest player in Guyana’s new offshore fields, started production in December 2019.
“The production of resources will continue to generate billions of dollars of revenue, significant economic development and job creation for Guyana,” an ExxonMobil spokeswoman told Al Jazeera.
The company expects to reduce absolute greenhouse gas emissions from its production business by 30 percent by 2025, the spokesperson added.
On the frontline of global warming
On the streets of Georgetown, some residents are keenly aware of the impacts of climate change.
And many say the benefits of oil money have yet to arrive in their pockets.
“With the oil, the cost of living is way up,” Rawle White, the owner of a vegetable stall at a local market, told Al Jazeera. He spent 20 years working as a farmer, but gave up due to frustration over environmental shifts.
“Because of climate change, you can’t do much farming now,” White said. “The tractor [often] can’t go onto the land with all the sinking because of rainfall.”
Businesspeople at the Georgetown Chamber of Commerce and Industry (GCCI) say it will take some time and planning for oil wealth to improve life for the average Guyanese, and growth is compatible with sustainable development.
“Local content legislation is what’s going to bring everyone into this … and make sure every Guyanese is benefiting from their resources, not just the oil companies sucking it out.”
Guyana could become a high-income country in the next three decades, GCCI executive member Richard Rambarran said, and a “leader of the global south for sustainable development” if the industry is managed properly.
On the docks of Georgetown’s main fish market, many workers don’t see it that way.
Catches have dropped by about half in the past two years, said Melvin Hussein, as he removed scales from a fish with a sharp silver knife.
“The fishing economy is getting low and we can’t do a damn thing about it … so far it [the oil] ain’t doing no good for us.”
Parsram, from the government’s EPA, said climate change, pollution from other sources, and overfishing are almost certainly impacting fish stocks, but there isn’t hard scientific evidence linking the oil industry to reduced catches.
Standing on a rickety wooden wharf poking into the Atlantic Ocean, boat captain Chris Singh said he expects grim times ahead.
“The fishermen are going to be the biggest losers at the end of this oil industry,” Singh, who has worked these waters for 40 years, told Al Jazeera and asked “What will we do when Exxon leaves?”

 

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