Introduction
Last week’s column concluded my consideration of the first of four modelled drivers [that is, Guyana’s oil and gas resources and reserves] and their related metrics, as displayed in the analytical framework I am using here [see January 28, 2023 column.] Today’s column centres on what I have earlier termed as Guyana ‘s oil opportunity.
By this I refer to the modelled time window remaining for Guyana to continue its profitable crude oil exportation to world markets. I have urged on several previous occasions that this window’s timeline lasts up to the decade of the 2050s. In turn, my conviction of this, rests largely on two projected variables.
These are, firstly, the United Nations modelled target date for a successful global climate transition away from carbon emitting fuels. And, secondly, the US Energy Information Administration’s (EIA) modeled projection of primary energy use going forward.
Clearly, the first consideration is largely declaratory. As a result, it is to that extent quite straightforward. As regards the second consideration the US, EIA data support the UN target revealing that, in the face of the challenges of global climate transition Guyana faces a decades-long opportunity to become, and remain, a significant global player as a primary energy supplier with its petroleum resources. The modelled global transition away from petroleum is, therefore, at a minimum, around three decades away.
For the second consideration the US, EIA data support the target arrived at in its EIA’s International Energy Outlook, which had estimated global primary energy shares from pre-Covid 2018 up to 2050. This modeling exercise centered on five modes of primary energy supply. The projected shares by 2050 are: renewables 28, petroleum liquids 27, natural gas 22, coal 20, and nuclear 4, percent.
The trends revealed in the Report show that petroleum loses its lead role [held in 2018]; and, declines as a share of global primary energy supplies. The share of renewables however, rises from 15 percent to 28 percent; natural gas remains constant over the period, at 22 percent; with coal’s share falling the most, from 26 percent to 20 percent, And, finally, nuclear power’s share declines marginally from 5 to 4 percent, and remaining a marginal source.
In Q3 last year, I had re-visited the timeline of the opportunity window remaining for Guyana’s successful export of crude oil and whether this is still constrained to the 2050s as argued above? I still remain steadfast in the belief that this window is likely to last until the decade of the 2050s. With the recent COP 28 I have been reviewing the Reports of the World Benchmarking Alliance, WBA and have become concerned about my declared conviction. In fairness to readers of this Sunday column I reproduce what gives me cause for concern below.
World Benchmarking Alliance, WBA
I had pointed out earlier that the WBA is a non-profit organization seeking to hold influential companies accountable for their contribution in achieving the United Nations Sustainable Development Goals UNSDGs. It performs this task by publishing benchmarks linked to company’ performance in his regard. And, with an Alliance comprised of more than 350 stakeholders, it is able to highlight best practices from leading companies and in so doing, it incentivizes laggards to catch up.
The WBA was launched in 2018 based on the belief that change in the way in which business impact is measured is necessary for motivating and stimulating action for an energy transition to a sustainable future for everyone.
Five years on, the 2023 Climate and Energy Benchmark of the oil and gas sector is the second iteration of this benchmark. This second iteration brings together the assessment of companies’ climate strategy and performance together with social performance in the same benchmark and ranking. The performance on climate is examined through an Assessing Low-Carbon (ACT) assessment. Social performance is examined through the just transition indicators (JTI).
As I had earlier reported, the WBA has identified “seven systems transformations that have a potential to put our society, planet and economy on a more sustainable and resilient path”. These transformations are varied, ranging from climate, nature, finance, urban, food, digital inclusion, to social aspects [such as, corporate human rights, companies acting ethically and providing decent work]. As noted WBA’s benchmark analysis focuses on areas for improvement, relying on governments to develop tailored policies and civil society to drive partnership efforts and investors to leverage their influence within companies”.
This information is intended to be made freely available to everyone; thereby allowing investors, governments, civil society, individuals and the companies themselves to be empowered. Investors can influence the companies they invest in. Governments can develop better policies and civil society can direct public support and partnership efforts. Individuals can decide where to spend their money and where they choose to work.
These benchmarks are intended to reveal both to companies and stakeholders where each company stands compared to its peers; where it can improve, and, where urgent action is needed to deliver on the SDGs. To turn business into a force for good. Ranking and measuring the companies will give them the guidance to drive change and create accountability for those who don’t change.
Conclusion
I’ll conclude this discussion next week before addressing the third modeled driver listed in the analytical template revealed on January 28.
