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Dr. Narine justified his support for the Amaila Falls Hydropower Project on the basis of “monotonic” increases in oil prices, saying: “What we have in Guyana is an opportunity in hydro which allows us to address this issue in a very elegant fashion.”
The impact of rising energy prices on Guyana would be significant, he pointed out, as “a shocking 94 percent of all energy consumed in this country” is derived from imported fossil fuels, which “as early as 2008”, cost the country between “45 and 55 percent of GDP.”
“That’s a crippling amount to spend, for any country,” Dr. Narine observed, in positing that costly energy impacts on Guyana’s industrial competitiveness.
He declared: “Expensive energy in Guyana is the single largest barrier to increased manufacturing, value added processing of agricultural commodities, mechanisation of agriculture, large-scale mining; and, indeed, quality of life in Guyana.”
High energy costs, he asserted, constitute a “security issue”. He said: “Countries like us (Guyana) won’t be able to access that energy…this is the reality, today.”
Dr Narine cautioned that the region’s energy security might also be at risk as a result of the uncertain political situation in Venezuela, and what this could mean for Petrocaribe, the Hugo Chavez-founded facility which provides oil to Caribbean and Central American nations on favourable terms.
Professor Narine, who teaches at Trent University in Canada, cited an “explosive” growth in the world’s population as one of the reasons behind the upward swing in oil prices. While indicating that as at 2013, the world’s population stood at seven billion, he opined that “at current rates, conservative estimates are that we’d be nine billion in 2050.”
He added that the growth of the middle classes in developing countries such as Brazil, India and China has also placed a skyward pressure on energy prices.
He explained that while having “half a billion people moving into the middle class” is a good thing, it also yields “on average, a tripling of their energy dependence.” In addition, he pointed out that as poorer people move into the middle classes, they eat more protein, and this ups the demand for energy.
“One unit of protein takes seven units of grain to produce,” the scientist informed, adding: “And guess what produces grain? Energy! The energy equation is linked…to our ability to produce, process and transport safe food.”
The conventional supply of oil is being outstripped by demand, he indicated, and this will worsen the escalation of fuel prices. Addressing the eventual onset of peak oil – the point in time when it is expected that the maximum rate of petroleum extraction would be reached – he noted that peak oil might be reached as early as 2024, or by as late as 2040.
The exploration of natural gas in shale rock formations would merely serve to delay the onset of peak oil, Dr. Narine, who also heads the Institute of Applied Science and Technology (IAST), admonished.
“What nobody argues about is we will hit a point where peak oil will be a reality. Fossil fuels are a finite resource, it is not an ‘if’ but simply a ‘when’,” he stressed. Even long before peak oil is reached, he suggested, speculation of oil as a dwindling resource would add to pushing oil prices upward.
Observing that much of Guyana’s current electricity generation uses diesel, Dr. Narine warned that with the coming on line of natural gas production in the United States, this would make diesel refining uncompetitive in that country, and lead to the shuttering of “twelve to eighteen percent of the refining capacity” there.
He elaborated that this would lead to a contraction of diesel supply and a concomitant increase in the price for that fuel, which would raise the cost of generating electricity in Guyana.
Describing himself as a proponent of renewable energy, he called for Guyana to employ hydropower as a feasible source of alternative energy generation, and described the country’s reliance on fossil fuels as an act of “abject stupidity.”
The National Economic Forum 2013 was a two-day event convened under the auspices of the President of Guyana, His Excellency, Donald Ramotar, in his capacity as Chairman of the National Competitiveness Council. It concluded yesterday at the Guyana International Conference Centre.
