Oil and gas in a ‘Green’ State future

PRESIDENT David Granger has declared that Guyana will become a ‘green’ state, defined by protection of the nation’s natural patrimony; its diverse eco-systems, vast untouched forests teeming with magnificent flora and fauna. Guyana is committed to green-energy generation, even as it looks to use the revenues it will gain through its oil-and-gas future.

In the last Government in Action, we discussed the Government of Guyana’s push for transparency and accountability in the emerging Oil and Gas sector, as well as what are the benefits to be had for the ordinary Guyanese. This week we will focus on how the administration intends to balance the exploration of the country’s oil wealth with its ‘green’ future.

Oil and the ‘Green’ State

As it stands, the country is aggressively pursuing a Green State Development Strategy, which is aimed at building greater economic resilience by diversifying production and reducing our dependence on fossil fuels and generating renewable energy from a number of sources – biomass, hydro, solar and wind; emphasise low-carbon manufacturing. It goes without saying then, that the delicate balance between the extractive industries, including oil, and the commitment to green development must be clearly defined and maintained.

President Granger, during his address to the High-level Event on Combating Pollution in the Extractive Industries on December 4, 2017 at the United Nations Environment Assembly in Nairobi, Kenya, said that our natural resources cannot be developed at the expense of the future of our people. “People, therefore, must be at the heart of the development of our natural resources. People must come before profits. The pursuit of profits has been accompanied, over the past century, by an exponential increase in extractive industries. This expansion, however, has aggravated environmental damage, which can have a long-lasting and harmful negative impact …on human dignity and well-being,” he said.

The Head of State said that pollution in the extractive industries threatens environmental security and it increases human vulnerability to human-induced environmental degradation and impacts on human security. Guyana has faced these risks before, with the extractive industry being one of the major income-earners. President Granger believes that as we look to an oil future and learn the lessons of the past, we can align divergent sectors to create an economy which is centred on ‘green’ development.

“Guyana’s ‘Green State Development Strategy’ will become our blueprint for moving towards becoming a ‘green state.’ The ‘green state’ will exemplify the policy of placing people before profits. The ‘green state’ will demonstrate how our extractive industries – bauxite, diamond and gold mining and logging – can be aligned with the protection of our environment, the preservation of our biodiversity and the promotion of the generation of energy from renewable sources. The ‘green state’ will become a model of environmental stewardship. It will demonstrate the signal role which a small state can play in protecting the world’s air, water and land from the threat of pollution,” the Head of State noted.

GSDS gaining international momentum
Head of the Project Management Office (PMO), Mr. Marlon Bristol, in an interview with the Ministry of the Presidency, said that the actions of government demonstrate that it is serious about the development of a diversified economy, built on a climate-resilient, people-centred approach.

“The Green State Development Strategy is basically putting the people before the profits. What has basically been the criticisms of the LCDS is that it has not been inclusive. What is it that makes the GSDS inclusive is the consideration for the people and consideration for the sectors. So we moved from low carbon to low emissions, expanding from the forestry sector to beyond. If you look at the pillars of the Green State Development Strategy, you would see that the human development and human welfare is a very, very critical focus,” Mr. Bristol said.

Minister of State, Mr. Joseph Harmon, who holds responsibility for oversight of the Department of the Environment, in his presentation to the National Assembly on December 7, 2017, added to the President’s comments, noting that Guyana has been a global leader in the fight against climate change by not just pursuing a ‘green’ agenda in the face of an impending oil-and-gas sector but an agenda, which is comprehensive and seeks to promote the wholesome development of the country with a special emphasis on the protection of its environment and extensive biodiversity. “I believe that in any part of the world, Guyana is the place to be. We have a broader strategy that [sic] the Low Carbon Development Strategy. Our strategy involves everyone, it involves the transportation sector, the use of solar energy, of wind energy, of technology and all of these elements,” he said.

Mr. Bristol echoed these sentiments, saying that the government’s Green State Development Strategy (GSDS) is a far more comprehensive approach than the Low Carbon Development Strategy (LCDS). The GSDS is so far-reaching and comprehensive, that the Government of Guyana has managed to receive funding from the Government of Norway to the tune of US$1.5M to take the strategy to citizens to ensure that it is wholesome, well rounded and representative of all Guyanese.

“This is why the Minister of Environment has endorsed the President’s Green State Development Strategy. The Green State Development Strategy looks at energy and resource-efficiency, it looks at reducing carbon emissions and pollutions, it looks at a more equitable distribution of income, it looks at increasing decent jobs and it also looks at preventing loss of biodiversity and ecosystem services. So those areas show that the GSDS is far more comprehensive than the Low Carbon Development Strategy, which is focused on low carbon, low emission from deforestation and degradation…,” he said.

Balancing Oil and Protection of the Environment
Addressing a gathering of Guyanese in New York in September, the Head of State said that Guyana will be “walking on two legs” as it intends to ensure that while it reaps the economic benefits of a booming oil and gas sector, its national patrimony, fragile ecosystems, pristine rainforest and biodiversity are protected.

“When we speak of petroleum exploration, when we speak of the prospect of becoming an oil state, we are not abandoning our commitment to our biodiversity – we will walk on two legs. We will become a ‘green’ state and we will use the petroleum profits to develop the infrastructure, and develop the other requirements of our country. Petroleum is going to be transformative from an economic point of view [but] we are not going to destroy our biodiversity, our beautiful rivers and waterfalls, our lakes. We’re going to ensure that new industries fit into our landscape, fit into the plan for the economic development of our country,” President Granger said on that occasion.

The Head of the PMO, Mr. Bristol too, believes that the balance is more than possible, as he noted that the pursuit of a ‘green’ state can run in line with the production of oil. The commitment and political will from the Head of State and the government, he said, makes it even more realistic. “Definitely we can balance both and that is why the voices on social media and other places are as loud as it is right now. Those voices are there because they are seeking for that to be achieved and that is what the government has committed to, having a ‘green’ economy in the midst of oil and we can definitely achieve that. I do not think that the oil is more or less for local consumption. It will be exported and that is why you see the production of oil moving our current deficit to a surplus so exports will escalate definitely. I do not think that finding oil is an impediment to achieving a green state,” he said.

Moreover, the strategy will add value to production through cleaner, cheaper and renewable energy- generation and propose plans to move closer towards the goal of full, renewable energy by the year 2025, thereby reducing the country’s exposure to the volatility of oil markets. What is interesting is that the new stream of revenue that oil is expected to pump into the economy will enable the country to implement this green strategy.

This point was reinforced by Minister of Public Infrastructure, Mr. David Patterson, who explained that on the part of the Administration there is a strong, unwavering resolve in so far as it relates to green development and oil will only serve to strengthen that resolve. “We see oil as a resource which we will use to empower our renewable-energy portfolio. The revenues from there will be pumped into our green initiatives…we will be able to transition even faster with additional resources,” Minister Patterson said.

Mr. Bristol agrees that the oil revenues will fuel initiatives, projects and programmes, which can see the country becoming a full-fledged ‘green’ nation.

“There are two initiatives that will drive that. One is that His Excellency talks about establishing a Sovereign Wealth Fund (SWF). In fact, Norway has the largest SWF in the world and what the SWF does is it makes investments into other sectors and initiatives even outside the boundaries of Guyana to stabilise the fluctuation of oil prices. This ensures a stable economy and resources are there to ensure that development is consistent over the years. In addition to that, the reason why Guyana is pursuing an Extractive Industries Transparency Initiative (EITI) is not limited to transparency and accountability in the mining sector. It is also about transparency and accountability in the oil-and-gas sector and the revenues, which we will get,” he said.

The ‘Green’ State and renewable energy

Already, the government through various partnerships with local and international partners and donors have been embarking on projects, which will solidify the commitment to the ‘green’ agenda. Through the Government of Norway, the country has secured funding for three major projects, worth over US$32M even as a ministerial team is expected to meet with the Norwegian Government to discuss and fine-tune the plans with regard to hydropower.

In the meantime, however, Mr. Bristol explains that the projects will target the Green State Development Strategy, Information and Communication Technology (ICT) and Sustainable Land Management.

Additionally, through funding from the Italian Government to the tune of US$650,000, a project was launched earlier this year with the aim of establishing a reliable point of reference for the existing state of energy use in Bartica. Further, in collaboration with the United Nations Development Programme (UNDP) on July 13, 2017, the Japan-Caribbean Climate Change Partnership (J-CCCP) was launched in the town. Through that initiative, the town benefitted from the installation of a 20Kwp grid connected Solar Photovoltaic (PV) system at the Three-Mile Secondary School along with the installation of energy-efficient lighting, as well as light-emitting diode (LED) street lighting. The partnership was funded by the Government of Japan to the tune of US $15 million and supports countries in advancing the process of improving energy-security planning for adaptation to climate change.

Guyana in partnership with the United Nations Development Programme (UNDP) is also in the early stage of a US $1.6M programme known as Mainstreaming Low Emissions Technology in Guyana. The funding is being secured through the Global Environment Facility.

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