Introduction
As a social scientist, I have observed, in recent years the unprecedented rise at a global existential level of some of the scariest social phenomena I have ever encountered. This phenomenon is unfolding within the political bosom of the world’s leading superpower. It threatens to implode there under the sheer weight of an ever-expanding universe of noise and nonsense, which today dominate its social consciousness, political discourse and behaviour. This statement is not intended to capture attention by being alarmist, exaggerated, or hyperbole. I ask readers to ponder the significance of results in two national US polls.
First, six months after the failed January 6, 2021 insurrection aimed at preventing the formal certification of President Biden, who had won the popular vote in the 2020 US elections, more than one-half of the members of the losing Republican party believe Donald Trump is still the President! Second, and equally scary, nearly three-quarters of the same Republicans continue to believe that the 2020 elections were rigged. Two signals have become evident: namely, 1) huge sections of the American populace cannot distinguish between fake news and reality, and 2) active agents and agencies of fake news are clearly conniving to sustain an ever-expanding echo chamber in which false news is replicated.
Published research (Oxford University) has revealed that, nowadays, echo chambers constructed to promote misinformation, false and fake news are so well structured they secure the diffusion and flow of misinformation at a faster, further, deeper, and more broadly controlled directional rate than real news. Consequently, if allowed to persist, this will make it progressively difficult to establish reality in the US. Readers can easily recognize this is an exceptionally dangerous outcome, since truth and reality are being replaced with misinformation and lies.
It is not the purpose of this column to litigate the present American dilemma. I mention it merely to observe that Guyana’s emergent oil and gas sector finds itself in a situation where noise and nonsense in the social and print media have created a dangerous detachment from reality for sections of the populace. This inevitably places unacceptable risks to the future economic well- being of the broad mass of Guyanese. Misinformed and fake doom and gloom portrayals do not simply trade in ignorance, and thus can be ignored. No, such portrayals also distort the economic outlook, dis-incentivize economic agents, adversely dampen investment spending, undermine self- confidence, erode trust, and, ultimately facilitate distraction from growing inequality and poverty. They lead also to the pursuit of division for individual and partisan benefit, both tangible (in-kind) and intangible (vanity).
For the remainder of today’s column and continuing next week I’ll offer some illustrations of the noise and nonsense to which I refer. These illustrations repeat very basic information that every informed Guyanese require for understanding the country’s emergent oil and gas sector.
Illustration 1: Damaging the planet
Going back over six decades to the 1960s, during the debates on the petroleum political economy, the term “Big Oil” has been applied to describe multinational or transnational oil companies that have been 1) relentlessly damaging the planet with their greenhouse gas emissions, ghg, and 2) simultaneously raping the petroleum resource wealth of poor countries. Over time the term has been more closely linked to the six oil supermajors, of which ExxonMobil is one. This pattern of behaviour is still evident today, wherever appropriate controls and safeguards are not in place. As noted last week, next to coal, oil, and then gas yield the most ghg. Indeed, it is claimed that fossil fuels contribute 80 percent to ghg.
Over time, in response to the ravages of Big Oil, many countries have resorted to establishing state owned and/or controlled national oil companies, NOCs. As petroleum producers these NOCs of course generate ghg. Given, therefore, the fact that every oil producer adds to ghg, all must share in the responsibility towards the global effort to prevent climate disaster and play a part in the containment of ghg emissions.
Noticeably, the noise and nonsense agents and agencies operate in pretended or otherwise ignorance of this reality and conundrum. Recall as I have repeatedly reminded readers, after allowing for year-to-year fluctuations worldwide, today NOCs produce more than one half of global oil and gas output. Indeed, the five leading oil producers, based on daily production, are all NOCs. And, furthermore, three of the next five producers (six to ten) are also NOCs. Clearly, therefore, no honest observer should represent the ghg threat as one confined to Big Oil.
As matters stand, the bulk of present day NOCs’ output comes from states which have not publicly prioritized today’s burdens of planetary ghg emissions. This is the reality with which Guyana has to contend. In addition, we should also note that all our neighbours – Suriname, Brazil, Venezuela Trinidad and Tobago – have had NOCs for several decades now. I recall that I was invited, and had attended the formal opening of Staatsolie, as far back as 1980
The noise and nonsense misinformers collude, connive, conspire to conceal the reality of today’s petroleum sector and pursues very outdated narratives.
Illustration 2: The IDB’s Technical Note
The second illustration I present is the way in which the noise and nonsense misinformers have studiously avoided the publication of an IDB report: Technical Note, IDB-TN-1994, published last year, August, 2020. It is entitled, ‘Traversing a Slippery Slope: Guyana’s Oil Opportunity.’ The Note’s Abstract declares four areas of focus; namely 1) the Guyana context; 2) the fiscal mechanism and projected revenues for the sector; 3) hurdles to constructing an effective governance regime for the sector; and 4) “new” policy perspectives on oil revenues utilization for sustainable development. I had written five columns covering key items in the report that were immediately relevant to shedding light on ongoing debates. These were published over the period December 20, 2020 to January 17, 2021.
Conclusion
In conclusion, I repeat my earlier urgings that readers peruse this well constructed IDB Note for themselves. My focus next week will be on highlighting gross misinformation peddled by the noise and nonsense doomsayers on two facets of the industry; namely, cost of production and the average effective rate of taxation under the extant PSA.