BY now, I’m sure we’re all inundated with stories on the 2023 National Budget. And if you follow Parliamentary proceedings, you’d know that we still have a few more weeks to go as Guyana’s lawmakers go through the budget debates (starting tomorrow) and the budget estimates. Still, I wanted to talk about one specific project that received a substantial budgetary allocation in the budget presented by the Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh. That is the Wales Gas-to-Energy project.

There has been much talk about this project over the past two years. As its name suggests, the project will be established in Wales on the West Bank of Demerara (WBD), Region Three (Essequibo Islands-West Demerara) and, in summary, hinges upon the use of natural gas produced in the oilfields offshore- for energy generation on land.

In the 2023 Budget, $43.4 billion was budgeted to facilitate the construction of a power plant and associated facilities there. That is certainly a significant sum and it goes to a project that is poised to be the single largest investment in Guyana’s energy sector

In this column, I’d like to zero in on this project focusing on three key areas: its energy generation potential, its role in Guyana’s energy transition efforts, and finally, its appeal.

First off, it is important to establish that Guyana’s energy needs are projected to triple by 2025. With several sectors of the economy expanding and expanding so rapidly, this should be no surprise. Now, the Gas-to-Energy project promises to help meet that demand by introducing a whole supply of energy- that is, from a 300-megawatt (MW) natural gas-fired power plant.

Not only that this project will introduce a newer, much-needed supply of energy, but it is also expected to do so at a cost much lower than is currently paid to produce electricity. Currently, most consumers across Guyana pay about 30 cents per kilowatt hour for electricity (and this is among the highest rates in the Caribbean). With energy from the new project, Vice President, Dr. Bharrat Jagdeo, believes that consumers would pay about 5 cents per kilowatt hour for electricity. The government promises that, at the very least, consumers’ electricity rates would be slashed by half. And this is expected to spur Guyana’s manufacturing sector, which has long been beset by the high cost of energy.

But let’s also talk about this project’s role in Guyana’s energy transition efforts. Globally, countries agree that energy needs should shift from environmentally-harmful sources (fossil fuels like diesel and coal) to more environmentally friendly, renewable energy sources like solar, wind, and hydropower. Many countries, like Guyana, agreed to transition away from those harmful energy sources. And this project, according to various government leaders, including the Vice President and President Dr. Irfaan Ali, is expected to help Guyana do just that. Based on the country’s revised Low Carbon Development Strategy (LCDS 2030), Guyana will phase out the use of about 70 percent of non-renewable fossil fuels by 2027 through an energy mix of natural gas and renewable energy sources.

Many don’t agree that harnessing natural gas should be a local priority since natural gas, though less harmful than fuels like diesel, is still a fossil fuel. And by it being a fossil fuel, it conflicts with Guyana’s long-standing environmental stewardship (as oil production offshore seemingly does) and adds to the ongoing climate crisis. These are fair positions to adopt, given that the oil and gas sector has historically been a notorious contributor to climate change. The argument against this is that even though Guyana may be contributing harmful emissions now, those emissions are still far lower than the amount of carbon dioxide trapped by the country’s lush, intact forests.

And that brings me to my final focus, the appeal of this project. In a general sense, conversations on `new oil and gas development in developing states increasingly consider equity and fairness. It has been argued that Guyana, for example, has not contributed to the climate crisis because it has not emitted large amounts of harmful gases, and its trees have trapped those gases emitted globally. Still, the country is challenged by rising sea levels, something set to worsen with the climate crisis. So with the chance to make money needed for climate mitigation and adaptation, Guyana seeks to capitalise.

Bringing that conversation down to a community level, in Wales, it is important to recognise that this project is appealing because of its appeal to the community. A once-bustling sugar estate in this community was shut down in 2016, leaving many residents and other surrounding communities jobless and forcing businesses to shut down or migrate. Now, with a hive of activity expected, residents of the community and the region are optimistic about their prospects.

With contracts inked and allocations being made, I think it is obvious that this project is steaming ahead. While there is much to consider about this project, especially on the environmental front (including factors I have not addressed here), this project brings with it much hope. And as it rolls ahead, I hope that people will feel the tangible benefits promised.

If you would like to discuss this column or any of my previous writings, please feel free to contact me via email: vish14ragobeer@gmail.com