Dear Editor,
After many months, the peaceful Deepavali celebrations allowed me a chance to glance at one of the daily newspapers in detail. At the bottom of the front page of one of the newspapers was the headline, “New UN Report warns against gas-to-energy type projects”. This newspaper article piqued my interest. So I took the time to read the entire UN Report. The UN Report sought to lecture the Latin American countries on what they should and should not do concerning their energy development plan. But history will prove that this same UN conveniently chose not to steer China, India, Europe, Australia and North America for too many decades away from their climate destructive energy development plan.
The mainstream environmentalists have labelled these plans as the primary cause for the current destruction of the environment. But I want to focus on my homeland and a significant positive development in the making. From all that I have read, Guyana is trying its best to break free from the environmentally destructive “Bunker C” power generation systems by switching to Natural Gas. No nation could achieve first-world status unless it has a low-cost, reliable and uninterrupted power supply. And why should Guyana not dream of such a status in my lifetime? The facts will clearly illustrate that our energy network is one of the most expensive and unreliable in the Caribbean.
I want to stand with the ideas put forward by Vice President Jagdeo, who stated, “There is no path to net-zero without using natural gas as a transition fuel”. It is economically reckless of any nation to leave natural gas in the ground and move straight to renewable energy at a hefty cost. In support of Jagdeo’s suggestions, we must push extremely hard to build the Gas-to-Energy Power Plant before the end of 2024. Any delay will cost this nation billions in lost economic potential. Let me outline my case for the man in the street:
1. With modern technology, higher-efficient natural gas power plants with low methane leakage rates have been proven to produce half the contribution to global warming compared to fossil fuel plants such as those that currently exist at GPL. Thus, there is real and measurable potential climate benefit in replacing those low-efficiency “Bunker C” gas-guzzling power plants at GPL with higher-efficiency natural gas plants such as the one designed to be built at Wales. The bottom line is that our Green House Gas (GHG) emissions will be slashed by almost half if we use natural gas at this time at a negligible cost.
2. In pursuit of the President’s ambition to expand and build a more resilient and competitive economy by 2030, natural gas is a more sustainable fit into the energy mix. The academic paper by Professor Xiaochun Zhang et al. (2014) confirms that the economic cost implication to transition the baseload energy of any nation from coal or base fuels such as Bunker C (as we are using in Guyana) would cost half as much if we move to natural gas as a bridging fuel rather than transition directly to total renewables. And why not when we have almost free natural gas in Guyana in 2022?
3. The facts will reveal that 95% (almost all) of the natural gas from our oil wells is re-injected back into the earth. Would you want that state of affairs to continue with no benefits to the people of Guyana? Or would you prefer some of it to flow to Wales, at a negligible cost to benefit the people of Guyana directly? The Wales-based Gas-to-Energy Power Plant will produce electricity at approximately five (5) US cents per kWh. When you bolt on GPL’s transmission, distribution, and administrative costs, the Guyanese public can benefit from a retail electricity cost at some fourteen (14) US cents per kWh. Compare that to the current price of electricity in Guyana; thirty (30) US cents per kWh.
4. It is basic economics; almost free natural gas, readily available, can leave some 50% of the current light bill in the pockets of every Guyanese electricity consumer.
5. The Gas Pipeline Project will be funded as part of the developmental cost of the oil project. Thus the cash flow implication for the National Treasury is negligible; no loans, no diversion of funds from other sectors to fund it; and most importantly, no need to tighten the belts of the working class to support it as was done in 1979 when the workers were told: “do you want hydro or do you want $14 minimum wages”? They never got the hydro and the $14 minimum wage in 1979. This historical comparison serves as a timely reminder of what a golden opportunity this nation has today in 2022 to build this Gas-to-Energy Power Plant; we must not lose it.
The fact remains that Natural Gas is the bridge fuel and is not the “be all and end all” of the energy transition strategy of this nation and will not be the only ingredient in our future energy mix. But, what is sure at this point in time, is that the low-efficiency “Bunker C” gas-guzzling power plants must go, and the faster this happens, the better for the economic transition ambitions of this nation. Enough said, but I cannot, without a clear conscience, remain silent on an economically and scientifically sound attempt by Jagdeo to provide lower cost and more reliable energy to this nation using a “bridge fuel” called Natural Gas which is in abundance in our jurisdiction.
Sincerely,
Sasenarine Singh- M.Sc.
Finance, ACCA