Gas-to-Energy project could be disastrous for Guyana’s economy – Gaskin

May 31, 2023 News

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Kaieteur News – Economist and transparency advocate, Ramon Gaskin believes that Guyana’s Gas-to-Energy (GTE) project could be disastrous for the country’s economy.
In an interview with Kaieteur News on Tuesday, Gaskin explained that he submitted a number of questions to Vice President Bharrat Jagdeo, Natural Resources Minister, Vickram Bharrat, Finance Minister, Dr. Ashni Singh and Commissioner of Information, Charles Ramson S.C. since April 25, 2023 but got no response to date.

Gaskin’s questions sought to scrutinize the total cost of the project and owners of the separate components; Guyana’s share of the total cost; availability of a feasibility study- showing capital and operation costs, among others – and the proposed rates for resale of the electricity. He also queried about who would take responsibility for any environmental issues and available insurance for the project. Importantly, the advocate also asked the leaders to clarify whether ExxonMobil would enjoy tax free activities in the gas project and the role of the Auditor General in the initiative.

Given that all four of the appointed spokespersons on the project have not acknowledged his request for information, Gaskin believes investing into such a project could spell disaster for the country’s economy. He told Kaieteur News that the government would not be able to justify this project and have refused to share any information with the public, which would confirm this suspicion.

According to him, “The gas-to-shore project is a big project where billions of US-dollars is involved and it may even be the biggest project ever done in this country. It will bankrupt this economy. At $600 billion, it will bankrupt the Guyana economy.”

So far, the project is pegged at US$2.3 billion but other costs are yet to be added to support the project.
Gaskin said he plans to go to Court as the leaders have not responded to his questions. He intends to stop the project and will focus his arguments on the economic aspect.
He argued, “The real grounds for challenging the project is that a project of such magnitude requires Parliamentary approval but they haven’t approved this thing. The Parliament has not approved US$3 billion for this project. There is no proper feasibility study for the Parliament to examine and enquire into this thing if it’s feasible. The government is saying that if you do this, we would cut the electricity cost by half (but) it’s a confounded lie- it will never happen.”

Gaskin explained that the Wartsila generators currently produce electricity at an average US$1 million per megawatt of power while the GTE project would generate electricity at US$7 million per megawatt.

“Gas to shore is seven times more expensive per megawatt than Wartsila and therefore you could never cut electricity if you do anything like that.”
He continued, “Besides that, the economics of it is disastrous for the economy. When we go to Court, we would go there with the law which would show that the government is breaking the law to do this project without approvals.”

The advocate argued that the project has been separated into a number of components, and it is unclear who the owners of these various aspects are. Additionally, he said there is no document proving the return on the investment for all the funds being spent on the project and who would benefit from the profits.

Gaskin also questioned how Guyana would utilize all the power to be generated from the project, in addition to all the other sources of power to be built, such as the Amaila hydro project.
He believes, “The gas-to-energy project will damage the economy of this country in a big way. The Skeldon project was only US$200 million that Jagdeo wasted. This is hundreds of millions now involved.”

The Economist said the funds would better be used to develop the country’s health and education sector. He also believes job creation should be a focus of the government. Gaskin was keen to note that Guyana must stay away from companies like Exxon that come to the country and avoid paying taxes, while other citizens must be subjected to taxes on their meager salaries, compared to the earnings of the oil companies.

On the issue of power generation, Gaskin, former Chairman of the Guyana Electricity Company (GEC) – now known as the Guyana Power and Light Inc (GPL) – said he believes Guyana should continue the use of heavy fuel oils (HFOs) for power generation. He believes the environmental impacts of this method of power generation would not be significant considering the power needs of the country.

Moreover, he noted, “We are short of electricity right now- we need about 60 megawatts of power to deal with the present short fall. We need another 5 megawatts at Bartica, another five at Anna Regina, another 5 at New Amsterdam, another 5 at Corriverton, so this thing that they bringing at Wales can’t help you. It can’t go to Corriverton, they can say what they like. But if you have 60 megawatts of Wartsila power, this could fix the problem which we need.” Similarly, he said if more power is needed to supplement the electricity supply in those areas, it can easily be done.

 

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• court, Disaster, economy, feasibility, GTE, questions

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