The economy Guyana inherited at Independence in 1966 has remained largely unchanged. Throughout the period Guyana was a primary producer of bauxite, sugar, rice, timber and gold. The fortunes of some industries have improved while those of others have declined, and a few added, like fisheries. The absence of cheap, adequate and reliable electricity was recognized as one important reason for the failure to industrialize. In this new era, as in the past, Guyana can never attain its full economic potential unless the production and delivery of electricity is vastly improved.
The era of economic nationalism began with the PPP government of 1957-1961 which emphasized the necessity to transform the economy. It saw an increased supply of electricity leading to industrialization as being of great importance. It significantly expanded supply by upgrading the Guyana Electricity Corporation (GEC). It advocated the construction of a hydro power facility at Tiger Hill to produce electricity for an alumina plant at Linden. Studies were done but no aid was forthcoming.
In 1973, Forbes Burnham, as part of the election campaign, announced plans for the Upper Mazaruni Hydro Project to deliver electricity for an alumina plant at Linden and elsewhere. For those who were not yet around and for those who have forgotten, millions of dollars of equipment were purchased and sent into the area to clear the dense forest. Hundreds of students from Guyana and overseas volunteered to the Mazaruni to supplement the work of the machinery. However, objection by the Venezuelans closed off the possibility of aid from the IDB and World Bank. The equipment was overtaken by the bush.
In the midst of this, Guyana experienced its first major electricity blowout with the collapse of the GEC in the mid-1970s due to lack of maintenance. Blackouts began then and continued with great intensity over two decades. The consequence of the Guyana’s failure to acquire the capacity to supply electricity in adequate quantities for industrialization specifically, and economic development generally, has retarded Guyana’s development over the period.
After 1992, great efforts were made, including attempts at privatization, and multi-billions of investment in electricity to stabilize and increase its supply. Even though the situation has been completely transformed, blackouts continue, and the supply is still inadequate and too expensive for industrial development. With the economy improving by 2000, increasing the electricity supply was back on the agenda. Guyana’s REDD+ Agreement with Norway in 2009 provided the pathway and significant funds, US$80 million, to assist in financing the Amaila Hydro Power Project which was launched. It was designed to produce 165 megawatts of electricity at a cost of US$900 million.
The Amaila Project was immediately opposed by civil society opponents of the Government. They argued that the government could not be trusted with such a large project having regard to the alleged failure of the US$200 million Skeldon Project. They also complained, among other things, about the alleged failure of the government to release authentic information in a timely manner. The opposition joined in opposing the Amaila Project. By the time the Ramotar administration came to office in 2011, all possible information had been released and later an internationally credible consultant, Norconsult, employed by Norway, had approved the project. However, because the project failed to attract majority support in the National Assembly, in which APNU+AFC had a majority, the developer pulled out and the project had to be cancelled.
Those who lived through Amaila, and are now living through Gas to Shore, would be excused for feeling a sense of déjà vu. But the electricity situation is direr today than it ever was, even ten years ago. Guyana is now expected to need 465 megawatts of electricity in 5 to 7 years. To achieve this, it would need the production from the Gas to Shore facility to supplement GPL’s production. Amaila and other projects, such as Upper Mazaruni, would be needed for replacing GPL’s diesel and increasing demand. Natural gas is used for electricity in large proportions in the US and EU.
But storm clouds are gathering over Gas to Shore. The project is flatly opposed by environmental advocates because it worsens the climate crisis. Civil society advocates, in alliance with the environmentalists, reject desk studies, demand full feasibility studies, complain about the choice of Wales to locate the facility without study or an environmental permit, the withdrawal of EPA’s recent guidelines, and demand a copy of Exxon’s application for the environmental permit. The EPA has provided a summary. The opposition to the Gas to Shore Project has only now begun. It is unlikely that APNU+AFC will not take the opportunity of confronting the PPP/C Government, no matter what position it may have taken in the past.
Guyana cannot afford to lose the opportunity offered by the availability of gas to expand its production of electrical power. It’s not clean but it’s far cleaner than diesel. In deploying gas, the Government, EPA and other agencies must satisfy the expectations of environmental activists and address the concerns of civil society. It is expected that due diligence studies will be carried out, full disclosures will be made and all facilities and structures will conform to the highest environmental standards. Any shortcuts will meet stiff resistance and jeopardise this project and Guyana’s future.
This column is reproduced, with permission, from Ralph Ramkarran’s blog, www.conversationtree.gy
