‘Tax the oil companies, demand 50% returns’

Jun 10, 2022 News

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– Bhulai tells President Ali after his complaints about developed countries

Kaieteur News – Civil society advocate and energy technologist, Alfred Bhulai said that President Ali should find ways in getting more out of oil companies operating here, including insisting on a 50% returns on profits, rather than complaining that this country does not have money to fund renewable projects.

Bhulai, who holds a degree in Applied Chemistry (U.G) and Engineering (Technical University of Berlin) made the comments in a letter to the editor of this newspaper, where he pointed how the developed countries have safeguarded themselves, while Guyana doing the opposite.
Last Sunday during his remarks at the World Environment Day activities President Ali while railing against the developed world argued that Guyana must aggressively pursue the production of oil to gain the revenues the country needs to combat the effects of climate change. “We cannot address climate issues unless we address the fundamental needs and wants of human beings. We cannot even speak about climate change if we have people who are hungry, people who don’t have access to water, people who don’t have access to wages and earnings…” the Guyanese leader told the gathering following a fitness walk at the National park.
He shared figures from the United Nations International Children’s Emergency Fund (UNICEF) which estimates that one in three persons globally does not have access to safe drinking water simply because the developing world lacks the resources it needs to grant those facilities. Additionally, the President shared that some 20 percent of the global population does not have access to adequate housing and one billion people of the global population lives in slums.

In this light, he said “We cannot have one world and one planet where more than half the people are without water, without food, without food security. We cannot have one world and one planet if we have such grave inequality that exists in our world. We can’t have one world and one planet when more than 68 percent of our population is projected to live in urban centers; the stress that will put on small land areas will be enormous…that is the reality of the world we live in today that is why we have been consistently calling on the developed world to (honour) the pledges they made. We are far away from the US$100billion pledge that the developed world would have made to fight climate change on adaptation and mitigation measures.”
According to him, for adaptation alone, developing economies need around US$140 million annually to cope with rising sea levels due to climatic conditions. As a consequence he said “That is why developing countries like Guyana must take a balanced approach. We must explore every possible revenue generating activity so that we can have the resources necessary for adaptation and mitigation but we must do so in a sustainable way.”
Fanciful speech
However, Bhulai said President Ali displayed good reasoning in his speech noting that he correctly makes the point that the developed countries are unfair in using the environment “to want us to not exploit our resources, while they renege on what they owe the present population of the Earth for the environment they have already exploited in past generations to enrich themselves.”
However, Bhulai asked rhetorically whether Ali can do anything about it to bring them to heel for Guyana at least. “The answer is yes! The oil companies are already effectively repatriating about 85% of the value of the oil by; buying equipment manufactured in the developed countries, thus developing those economies more; providing expensive technical expertise, remunerated at their rates, only paying taxes to us if they choose to be more than 180 days in our inefficient jurisdiction; and their 12.5% of the so far unaudited profits.
Bhulai said some developed countries have now slapped a windfall tax on their oil companies. “The USA is also budgeting to ensure that their multinational corporations pay an effective tax rate of at least 15%. They did not make deals with their oil companies to pay no tax or even, like we seem to be doing, paying their taxes for them. Those developed countries considered the needs of their people while allowing their companies to thrive.”
“So what can President Ali do? He can insist we get at least 50% returns from the oil. Complaining to his own people that the developed countries are not doing their share sounds nice in a speech and makes him look clever. But his words are not going to change the attitude of the developed countries, who are not under his jurisdiction,” Bhulai asserted. He insisted that the oil companies are in the jurisdiction of President Ali. “Does he have the guts to treat them like the developed countries treat the oil companies in their jurisdiction? Or is he in his turn being bullied?”
Meanwhile, Ali also urged during his speech that Guyanese must not live in a false reality but conscious of the global economy in which we must operate. “Whether you are an environmentalist, a Scientist an Economist, a social activist you cannot live in silos. We have to live within the construct of the global reality and that is why we are pursuing the growth and developmental path that is carved under the Low Carbon Development Strategy where we are seeking to strike the balance. Where we are seeking to ensure that sustainability is built on economic viability, sustainability is built on environmental sustainability, (and) sustainability is built in reducing inequality disparity and building balanced growth and equitable growth for the people of One Guyana.”
He said in some countries that have high deforestation rates, they were simply going after livelihood opportunities to ensure food stays on the table.
In this regard he pointed out, “We have already made it very clear that we cannot be blamed or we cannot be subjected to under development because of what took place by a few countries. We have a fundamental right to equitable development but in exercising that fundamental right we are saying to the world we will do it in a different way, in a sustainable way, in a way in which we secure the environment, in a way in which we keep that forest cover, in a way in which we continue to contribute to the global fight against climate change.”
In Guyana, the President said we have 425 kilometers of coastlands that must be protected to save lives, crops and safeguard livelihoods. He therefore said the onus will be on the country to find more than one billion in adaptation funds to meet this singular need. “I ask all the specialists who speak every day to tell us how do we address this if we don’t address our revenue needs and don’t pursue aggressively the forms of revenue that must come,” Ali argued. According to him, “We have to ensure we have energy security, we have to ensure we have food security, we have to ensure we have climate security but importantly in all of this we have to ensure we have economic viability.”
“You can preach all day to the developing world-go solar, go wind, go green hydrogen- what is the capital cost?…yes we must because it’s good for the planet, it is healthy for the planet but let’s be realistic, at the current capital cost how many developing countries can afford this transition and who is paying for this transition,” the President added.
While speaking to the United Nations Resident Coordinator to Guyana, Yesim Oruc, who was present at the event, President Ali said: “don’t tell us that the developing world must move to investing in renewable. That is not fixing, that is passing the buck to the developing world again that you must find money to fix the problem once more. That is not fixing the solution that is not fixing the problem. Tell us how to fix it. Tell us how we are going to raise the money. Tell us how you are going to put more money into grants and concessional loans to fix this…and those in our society who are blindsided or short sighted to these realities must wake up, must wake up to the reality! Nobody is going to come home to us here and find the resources to give you the best possible health care and the best possible education…the one world and one responsibility must not be divorced from the equality of treatment, the nondiscriminatory nature of the global system and the access to resources.”

 

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