Guyana’s expanding oil and gas sector will not affect the country’s environmental credentials, effectively allowing it to maintain its carbon sink status, according to Senior Director for Climate and REDD+ (Reducing Emissions from Deforestation and forest Degradation) in the Ministry of Natural Resources Pradeepa Bholanath.
Bholanath, who also heads the Environmental Assessment Board (EAB), made the statement on Wednesday during a seminar on the prospects of carbon capture and storage for Guyana held by the University of Guyana’s Faculty of Earth and Environmental Sciences’ Department of Environmental Studies.
Responding to questions on whether enough data is being collected to accurately calculate the difference between carbon generated by oil use and exports against the amount being absorbed and stored by the forest, Bholanath said that Guyana’s forest stores 90.5 gigatons of carbon. She added that given the low deforestation rate as opposed to higher forest covers, the country will continue remaining a carbon sink even as it ramps up offshore production.
“What we have assessed over the last two years in close work with the GGGI [Global Green Growth Institute], working with the office here in Guyana, we’ve been able to analyse the carbon emissions for each of the aspects of the oil and gas industry. Particularly looking at the natural gas project that will come on stream and also looking at each FPSO [floating, production, storage, offloading vessel] and the emissions associated at every stage of its operation. What that has summarized for us is that we look at fugitive emissions, we look at the emissions that would be involved in the commissioning and startup and we also look at the emissions that will be part of a natural gas operation.
“Having said all of that, what all of the data summarized is—is that with four FPSOs by 2027 or with that even doubling in the years to come, that 154 million tonnes of Co2 that the forest is sequestering annually far eclipse the level of emissions that would come from a single FPSO which is estimated to be about 2 million tonnes of Co2. So you can imagine, therefore, that as we keep an eye on the various aspects of emissions per FPSO, and for new projects that may come on board like the natural gas project, Guyana will always be a net sink. There is hardly a reality where one can contemplate that 154 million tonnes of Co2 is being taken off by the operation of FPSOs,” she explained.
She added that even with that information, the government still has to ensure that all the environmental standards are maintained and that low carbon development takes place within the oil and gas industry.
Observers have been questioning the impact of the oil and gas sector on Guyana’s environmental standing since the world is looking at phasing out the usage of fossil fuels. However, the government has largely ignored those questions and has continued to develop the sector at unprecedented speed.
She also used much of her time to explain the process and goals of Guyana’s Low Carbon Development Strategy (LCDs) 2030. The panel also included ExxonMobil Carbon Storage and Transport Manager James White and Dr Lorraine Sobers, who lectures in the Department of Chemical Engineering, Petroleum Studies Unit of the University of the West Indies, St Augustine.
Bholanath clarified that LCDs 2030 is not an environmental mandate rather it is a development strategy that takes into focus environmental, social and economic aspects along with low carbon growth and planning. She added that the 2030 strategy is building on the 2009 version and using the knowledge gained for Guyana to further economize the benefits of its forests.
35M carbon credits by September
Carbon credits are referred to as “hall passes” greenhouse gas emissions. Forests serve as carbon sinks and with approximately 85% of its landmass covered in forests coupled with a low deforestation rate, Guyana is looking to further market its carbon absorption capabilities through the ART-TREES [Architecture for REDD+ Environmental Excellence Standard] registry.
Guyana is hoping to complete ART-TREES certification no later than August 2022 after which it would have credits available on the market. Once the credits are certified, the ART-TREES Secretariat will record them on the publicly accessible ART registry, from which point they will be available for purchase by governments or companies with high emissions which they want to offset.
And when the credits are available for sale, these can be sold on the market, either directly by Guyana or through brokers.
Guyana alone stores about 19.5 billion tonnes of carbon in its forests that are estimated to be valued at US$40 billion to US$54 billion annually, according to President Irfaan Ali.
Now, with the sale of carbon credits, Guyana is aiming to earn significant sums from its carbon storage potential. By purchasing carbon credits, companies and governments with high CO2 emission rates are granted permission to generate one tonne of CO2 emissions per credit.
The sale of carbon credits is not a foreign concept to Guyana since it had the second-largest such agreement with Norway under the LCDS piloted by Jagdeo. Under that carbon credit agreement, Guyana earned over US$212 million which was used for various transitional projects.
Bholanath told the virtual seminar that when the agreement was entered into with Norway, there was not a market at the time willing to buy carbon credits. She added that this has now changed and the world is now recognizing that value should not just be placed on countries replanting their forests but also on countries that do everything to ensure their forests remain standing.
“…one of the key programmes that Guyana is engaged in at this point in time that is going to allow for payments to come together for conserving forest carbon and for continuing to sequester forest carbon,” she noted.
She further explained that Guyana is one of the most outstanding countries when it comes to sequestering and storing carbon. She said that Guyana’s forest stores 5.8 tonnes of carbon per hectare adding that the information has been measured and established on the MRP system and scientifically peer-reviewed.
Under the ART-TREES programme, Guyana is expected to have between 8 and10 million carbon credits on the market annually but Bholanath said in this first instance there will be approximately 35 million credits up for sale by September 2022. She said this is so because of an accumulation of credits from 2016 to date.
“Our last crediting year was 2015 under the Guyana – Norway agreement and because we entered into the ART-TREES Programme in the very early days. I recall it being in December of 2020. It allowed for us to take advantage of that window to benefit from the 2016 to 2020 carbon credits. So that would mean that Guyana will have the opportunity to benefit from close to 35 million credits for the period 2016 to 2020 and up to 10 million credits annually every year thereafter,” she said.
Speaking about the financial value of the credits, Bholanath said that under the Norway agreement Guyana used to be paid US$5 per credit (equivalent to a tonne of carbon) but under ART-TREES it can receive a minimum of US$10 per credit.
“So that is where things stand right now for us. We’re at the stage of verifying and validating our submission to the ART-TREES programme for the period 2016 to 2020. So hopefully, in the next few months, those credits would have been through and hopefully successfully. So the scientific validation exercises to clear those credits being available for sale,” she noted.
When asked whether the agreement with Norway would still be engaged under the same agreement or through the ART-TREES programme, Bholanath explained that the agreement was never meant to be a bilateral one.
“…we never earned 100% of what we could have earned because in the Guyana-Norway agreement there was that clause, as you know, that says we will never receive more than 85% of the earnings unless other partners come into the agreement. It was always intended to be more than just a bilateral. So fast forward now 12 years later to the point where we’re at now [where] Norway, the UK, the US, Germany, a lot of other countries in Europe are all now moving towards the market-based mechanism,” she added.
The government, back in March, had issued a call for proposals for transactions of ART-TREES certified carbon credits.
“On October 26, 2021, the Architecture for REDD+ Transactions (ART) Secretariat, approved TREES (The REDD+ Environmental Excellence Standard) Documents Submitted by Guyana. Verification and Validation processes are currently being conducted. TREES is the standard under which Guyana’s carbon credits are being registered and certified for transaction in a carbon market. Since October 2021, these documents have been posted publicly on the ART Registry and include a TREES Registration Document and TREES Monitoring Report for the 2016-2020 Crediting Period and a TREES Registration Document for the 2021-2025 Crediting Period,” the document read.
It is unclear how many proposals have been received thus far since the government has not released that information.
