Positing that the government’s proposed budget is filled with opportunities at throwing money at issues without proper analysis, parliamentary shadow Minister of Natural Resources David Patterson on Thursday said more studies should have been undertaken before making decision on the Wales gas to energy project.
“We see a few mega projects described as very important and transformative. The government says that they are so important and transformative that we don’t have time to study them properly to let information guide decision-making,” Patterson said during his contribution to the budget debate, which wrapped on Friday.
The APNU+AFC coalition parliamentarian argued that if government had commissioned a detail-ed study of the project, it would have been informed that the pipeline solution proposed is simply not the best to utilize the country’s natural gas resources.
“The pipeline gas to shore solution is much too expensive. It is transporting gas for electricity generation at a cost of about US$4.50 per million Btu, a cost for transportation that exceeds the average market price for gas worldwide over the past year. This cannot and will not result in cheaper electricity for our nation,” Patterson told the House.
He pointed out that the proposed 1,800 km pipeline designed to transport 1.2 billion cubic feet of gas per day between Israel and the European Union has been put on hold. He said the project was paused due to concerns for the lack of financial feasibility expressed by both the Israeli and the US governments.
According to him, the concerns about feasibility for that pipeline project should have raised a red flag for the Guyana pipeline project since the EU pipeline would be transporting gas at more than 30% less cost than our pipeline project.
The former Minister of Public Infrastructure said further studies would have brought to light scenarios that would have led them to reconsider moving ahead with the project. He stated that it would have highlighted that transporting gas in the form of compressed natural gas (CNG) to shore by ISO Containers is much more cost effective than a pipeline.
“A study would likely have brought to light that transporting gas to shore by ISO containers would be almost 75% cheaper than by a pipeline. Further studies would also likely have brought to light that the ISO Container method of transporting gas has the possibility of opening huge export markets for Guyana into CARICOM and Brazil,” he reasoned.
The opportunities to utilize our gas reserves are enormous, he said, before extending a hand from the opposition to support government in negotiations with the Stabroek Block Operators in getting, a better oil contract, lowest price for the gas, and better conditions for the Guyanese public.
Countering his position was Minister of Natural Resources Vickram Bharrat, who in his rebuttal said that the gas to shore project will revolutionise the life of every Guyanese through the provision of cheap electricity as well as the creation of manufacturing and industrial sectors and employment opportunities.
He also stated that the project will reduce Guyana’s carbon imprint through the use of cleaner fuel.
Patterson, in his presentation, chastised the government for allowing ExxonMobil to continue flaring by “callously revers[ing] the Zero Flaring Mandate” with the option to pay a fee of US$45 per tonne of carbon dioxide flared.
While Bharrat did not address this, Vice President Bharrat Jagdeo at a press conference on Thursday explained that government maintains the policy of no flaring. He refuted comments that they are allowing flaring to continue for financial gains but stated that Guyana is among a few countries who have implemented such a hefty fine against oil producers.
While Patterson accused the government of allowing the dumping of waste water from the production back into the ocean without any penalties, the Minister refuted the claim and said that it was the PPP/C government that imposed the mandate for waste water to be treated at international standards before it is disposed.
Bharrat told the House that the Liza Floating Production Storage and Offloading vessel had provisions on how to deal with water produce from operations. He further said that it was the PPP/C administration which made such provisions for current operations and in the Payara well permit. He stated that the Environmental Protection Agency have been monitoring the disposal using international standards.
Patterson also used his time to criticise government for the lack of transparency on the daily operations of the oil and gas sector.
“This lack of transparency dominates the PPP/C’s activities in the oil and gas sector and quite frankly characterizes the PPP/C’s activities in general and should be concerning for all stakeholders wherever they may be,” he added.
He said despite the numerous request to provide the daily production information for the oil, there is no information forthcoming.
“There are no figures to perform analysis on, no production data which can be tabulated with the corresponding oil prices to ensure that we are receiving value for our oil. So, the Guyanese citizen, the main stakeholder in all of this, remains in ignorance and cannot check what we are told,” he pointed out.
