Guyana has limited time to exploit, develop oil resources – Professor Clive Thomas warns

Mar 26, 2022 News

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As Energy Transition nears…

Kaieteur News – Renowned Economist Professor Clive Thomas issued a strong warning to Guyana’s authorities to make the best of the country’s oil and gas resources now and as quickly as possible as the time for exploiting and growing wealthy off the commodity will soon come to an end.

Professor Thomas was at the time discussing Guyana’s political economy on the Politics 101 show with Associate Professor and Executive Member of the Working People’s Alliance (WPA) Dr. David Hinds.
Dr. Thomas pointed out that what is most significant for the Guyanese people to understand is that if they are to alleviate many of their economic problems, particularly poverty through oil and gas wealth, they must do so now as the time the world needs to transition to clean energy is nearing.
“Guyana has a limited time span for trying to make use of its oil and gas because the transition from carbon emitting energy to renewable energy is also going to be as rapid as it has been at the outset of the discovery of oil and gas.”
Dr. Thomas estimated therefore, that there is only some four to five decades left to change the entire energy and the mix of energy that the world uses. “So, our opportunity with oil and gas is very limited,” the economist warned. He said now is the time to use the resource to its maximum as not to look back in regret when oil is no longer a commodity of priority.
Dr. Thomas highlighted that the most significant activity taking place in the world right now is the pace at which change is occurring. He also pointed to how quickly global economical hardships escalated as a result of the Ukraine/Russia war regarding its effects on the world along with the short space of time Guyana would have discovered over 11 billion barrels of oil; the shortest time span ever seen in the world, among other events as evidence of an unprecedented change which the world is going through.
In Guyana, the economy is also evolving at a rapid pace and that is bringing rise to many new and existing problems. Dr. Thomas reasoned however, that the time horizon that Guyana must solve its developmental problems is very short, “And that is why it is very important for us to come to grasp with them today.”
Guyanese leaders may very well want to heed Dr. Thomas’ warning on Guyana’s short time to grow on oil and gas since a recent study from the Manchester University’s Tyndall Centre for Climate Change said that rich countries had up to 12 years left to produce oil, while poor countries were given up to 28 years.
The report by the University’s leading researcher in Energy and Climate Change, Professor Kevin Anderson and Dr. Dan Calverley, warned that, “There is no room for any nation to increase oil production, with all having to make significant cuts this decade. The richest, which produce over a third of the world’s oil and gas, must cut output by 74 percent by 2030; the poorest, which supply just one ninth of global demand, must cut back by 14 percent.”
Professor Anderson said that rich countries must end oil and gas production by 2034 to keep the world on track for 1.5°C and give poorer nations longer to replace their income from fossil fuel production. Considering countries’ differing levels of wealth, development and economic reliance on fossil fuels, the report says that the poorest nations should be given until 2050 to end production although they will still need significant financial support to transition their economies.
The Professor related that, “Responding to the ongoing climate emergency requires a rapid shift away from a fossil fuel economy, but this must be done fairly. There are huge differences in the ability of countries to end oil and gas production, while maintaining vibrant economies and delivering a just transition for their citizens. We have developed a schedule for phasing out oil and gas production that – with sufficient support for developing countries – meets our very challenging climate commitments and does so in a fair way.”
The energy and climate report also reminded that, when countries signed the UN Paris Agreement on climate change, they agreed that wealthy nations should take bigger and faster steps to decarbonise their economies, and also provide financial support to help poorer countries move away from fossil fuels. This principle, it was noted also applies to coal power generation, with the United Nations pushing for wealthy Organisation for Economic Co-operation and Development(OECD) countries to phase out their coal use by 2030 and the rest of the world by 2040.
The Professor reasons that, “There is very little room for manoeuvre if we want to limit warming to 1.5°C. Although this schedule gives poorer countries longer to phase out oil and gas production, they will be hit hard by the loss of income. An equitable transition will require substantial levels of financial assistance for poorer producers, so they can meet their development needs while they switch to low-carbon economies and deal with growing climate impacts.”

 

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