THE big story on day two of Guyana’s 2023 International Energy Conference and Expo was a very unique item by global standards: The government’s decision to make 15 per cent of its multibillion-dollar carbon credits returns from Hess Corporation, totaling US$22 million or G$4.7 billion, directly available to 241 Amerindian villages, to fast-track their development and upgrade their ability to better care for themselves with state assistance.
The carbon credits share is only part of an overall $35 billion (US$166 million) much-improved package the government has budgeted for 2023 Amerindian expenditures.
Each village will receive between $10 million and $35 million, but while village leaders have been asked to establish bank accounts, the funds will be released only after villagers meet and decide on what’s to be done with the money.
However, the bigger picture is Guyana being the first oil-based economy in Latin America and the Caribbean to enter into an agreement with a major oil company to pay carbon credits – and allocate a dedicated 15 per cent share to the nation’s indigenous communities.
It’s a historic giant step that the government – with 70 per cent of its carbon credits still unsold – is now aiming to have the world replicate this by lobbying the United Nations Framework Convention on Climate Change (UNFCCC) to create room for a compliance market for carbon credits.
The government’s Low Carbon Development Strategy (LCDS) has been earning millions of dollars for Guyana since 2009 when it got US$220 million from Norway to avoid deforestation, and last year sold 30 per cent of its jurisdictional carbon credits to Hess for at least US$750 million.
By the government’s measure, carbon credits currently fetch between US$20 and US$25 per tonne, but with the proposed compliance market can reach as high as US$80 to US$90 per tonne, which can be put to better use to assist the most needy and marginalised groups in other countries worldwide.
All nations have historically neglected First People and Guyana is leading the way in encouraging Big Oil to see the wisdom of buying carbon credits to help governments help more people in need, from indigenous communities to minority groups historically excluded from national development agendas.
Guyana’s historical protection of its huge forests has also started yielding real fruits while developing oil and gas, as it was also announced on day two that arrangements are in place for real-time satellite monitoring of its huge forest by over 500 officers to be placed throughout the interior hinterlands.
There was expected criticism of the government by the Amerindian People’s Association (APA), an NGO that agitates for Amerindian rights, which expressed problems with the government’s approach.
But the government insists it will deal directly with the villages and chiefs, as it feels indigenous people — contrary to popular condescending views – are highly capable of planning how to use their additional resources, while the government is willing to provide the technical resources they may need.
Steps have also been taken to ensure transparency and accountability in the process, with annual audits of how all monies are spent by both Central Government and the indigenous communities.
Guyana’s lucrative LCDS policy can be adopted (and adapted) by heavily-forested developing nations and its success can also encourage neighbouring oil-generating Suriname, which is also heavily forested to do likewise.
It can also encourage governments and aboriginal people (like in Australia, for example) to discuss adopting a similar approach to developing a LCDS.
Likewise, indigenous people across the Caribbean and Latin America can use the Guyana model to press their government to either do likewise, starting with supporting Guyana’s proposal for the UNFCCC to create the proposed compliance market (for carbon credits).
But that was not all the good news on day two, as the Guyana government also indicated it had put aside some $400 million to compensate for 75 acres of land compulsorily acquired from 65 persons with properties in the path of the US$43 billion gas-to-energy project, aimed at eventually lowering electricity bills for all Guyanese.
Guyana will pay ExxonMobil US$55 million annually for the gas-to-energy pipeline over the next two decades, but the Task Force overviewing the project has assured persons that the amount is manageable, as it estimates the nation will not only save, but can also earn ten times that amount over the same period.
Meanwhile, ExxonMobil also indicated, on day two, that its investment in Guyana currently stands at over US$30 billion — and by the time it allocates to its latest Uaru exploration field (with over a billion barrels of oil estimated), the new figure will be US$40 billion.
Canada-based CGX, the latest North American player investing in Guyana through its Wei-1 well in the Corentyne, also announced on day two that it has been able to clear all its debts and is heading to develop a deep-water port in Berbice to explore and upload oil and gas along with its majority partner, Frontera.
Meanwhile, the government and planners of the international conference and expo ended day two pleased with the presentations by representatives of the investing companies, but also with the wide range of oil and gas skills, supplies and services on display at the expo, which featured over 200 local, regional and international companies – including Barbados, Suriname and Trinidad and Tobago.
There was also much discussion at the conference and in the local, regional and international press about the presentations by the three Caribbean leaders (from Guyana, St, Vincent and the Grenadines and Trinidad and Tobago) looking to Guyana to integrate the regional ambition for Energy (and Food Security) leadership and cooperation.
By the end of day two, it was clear that the annual international energy conference and expo has grown considerably in scope, evidenced by the overwhelming attendance by close to 1,200 international, regional and local delegates and guests, as well as the high level of international media attention it has drawn.