The International Energy Agency (IEA) recently warned that exploration and development of new oil and gas fields must stop this year if the world is to reach net-zero emissions by 2050.
This increases pressure on countries newly emerging in the fossil fuel industry, including Guyana and Suriname, to limit operations so that the world can achieve its climate goals.
However, developing countries see this as an attempt to monopolize the industry in a world that still relies heavily on fossil fuels.
In a recent exclusive interview with Stabroek News, Vice President Bharrat Jagdeo disclosed that the Guyana and Suriname governments will take the opportunity at the United Nations Climate Change Conference called COP26 to explain their decision to continue their oil and gas operations.
The two governments recently agreed to make joint presentations at COP26, which will be held in Glasgow, Scotland from November 1st to 12th, on several matters including their oil and gas industries.
Jagdeo said that COP26 presents a good forum to deter-mine whether Guyana’s and Suriname’s intention to continue being oil producers will conflict with their international and national positions on climate change of getting to net-zero emissions.
“We have to explain this nuanced position to the world in light of the IEA report which said you have to stop all new development of fossil fuel resources from explorations right up to development,” the Vice President said.
He noted that this recommendation was not only made by the IEA, but also by the United Nations (UN) Secretary-General Antonio Guterres and the Inter-governmental Panel on Climate Change (IPCC), and as parties committed to the Paris Agreement, it is only right that the two countries make known their positions.
According to Jagdeo, the focal point of their arguments will be that Guyana and Suriname are already net carbon neutral, thanks to both countries’ vast forests which are acting as a carbon sink.
“Where the world is trying to get to by 2050, we are already there. That’s position number one,” he stated.
The Vice President noted that both countries support rapid decarbonization and are com-mitted to helping the world achieve climate goals.
However, he says, more pressure must be placed on the developed countries that are emitting a high level of green-house gases as the success of the Paris Agreement highly depends on the steps those countries take to meet climate change goals, especially when it comes to the fossil fuel industry.
As it is right now, he said, an oil and gas industry worth about US$4 trillion still exists because there is a demand for fossil fuel, even though many countries are turning towards renewable energy. Despite the attempts to adopt renewable energy sources, he added, the demand for fossil fuels outweighs the implementation of projects to adopt renewable energy.
He subsequently added that the demand for fossil fuels is dependent on the actions of the developed world and the pace at which they move to phase out the fossil fuel industry.
No abatement
“Right now we see no abatement in that pace,” he said.
Jagdeo went on to add that if countries are being asked to stop the development of new oil and gas fields and there is still demand for fossil fuel, then essentially current producers are locking in a monopoly.
That means, he said, Guyana will be unable to sell its fossil fuel resources. “We have to forego our production just because the world wants to lock in a monopoly for these existing countries, but why? We are a low-cost producer and our crude is light sweet crude, which is less polluting than the others,” he said.
He pointed out that despite developed countries pledging to assist developing countries in terms of financing as part of the Paris Agreement, this is not being done.
As a result, Jagdeo disclosed, their presentation at COP26 will argue why developing countries like Guyana and Suriname need to be part of the oil market. The additional finances from the industry will allow investments in the non-polluting areas of the economy and also, raise living standards.
He added that if the fossil fuel industry is monopolized then, Guyana is going to be stuck in the cycle of low emissions and low income.
“We’re trapped in that sort of cycle, so our argument is nuanced, once you need it, we should be supplying it but we support the world moving to a decarbonised future. If you can end fossil fuel demand, we support a carbon tax. If you can end it 10 years, then fine, but if you need it for another 10 or 20 years, then let us be part of the supply chain,” he said.
He went on to emphasise that Guyana is only contributing to a tiny portion of global emissions with its fossil fuel industry but this is not even an issue because Guyana is a carbon sink. According to Jagdeo, this would continue to be case even if ExxonMobil was producing at its maximum capacity in Guyana.
“[Our oil and gas industry] is not going to affect our commitment globally, or nationally towards climate change goals but we need resources to develop our country and people once there is a demand [for fossil fuels] globally,” the Vice President said.
Only a few days ago, Exxon increased its estimate of the discovered recoverable resource for the Stabroek Block offshore Guyana to approximately 10 billion oil-equivalent barrels.
The updated resource estimate includes a new discovery at the Cataback-1 well, which brings the total significant discoveries to more than 20 within the Stabroek Block.
Meanwhile, the report released by the IEA is its most comprehensive report yet into what is needed to achieve the world’s climate goals, the implications of which will be felt around the world. The IEA set out 400 milestones for governments to reach, including the phasing out of new fossil-fuel cars from 2035 and the decarbonization of global electricity generation by 2040.
