THE transition to renewables is just and necessary. While some campaigners advocate for an abrupt end to oil, events like the COVID-19 pandemic and Russia’s war in Ukraine, have taught the world valuable lessons about the dangers of a ‘hard’ transition.
Oil’s proven utility to the world means that it will continue to be needed in strong supply, to support the energy transition. Luckily, countries like Guyana have found a way to use the resources to do just that, as well as power their transition agendas.

In the first regard, Guyana has already kicked off a transition which has benefitted from the fiscal space facilitated by oil and the energy to be sourced from natural gas. The 250MW Gas-to-Energy project is in play and will slash emissions associated with power generation, as it replaces heavy fuel oil (HFO) as the main source. In addition to the expected reduction in consumer utility bills, the project is expected to kick off an industrial renaissance that will boost opportunities for private investment in renewable projects. One such project, the 25 MW Hope Wind Farm, has already been envisaged.

Meanwhile, the government is executing small solar and hydro projects across the country. The larger Amaila Falls Hydropower Project is expected to be pursued, with the government’s blueprint specifying 165 MW of additional power. These projects will not just replace the dirtier HFO, they will boost Guyana’s capacity to levels never before achieved by the country, necessary to power the rapidly developing economy.
In another regard, the revenue from the oil sector is boosting the country’s ability to pursue climate adaptation and mitigation projects.

A country accustomed to flooding events which sometimes damage crops and injure livelihoods, is spending its money now on more canals, pumps, kokers and sea defenses. These are projects that have languished far too long, as Guyana waited for the developing world to fulfill its promise to provide the necessary aid. President Irfaan Ali has frequented international fora, taking those countries to task, even as Guyana is buffeted by climate change impacts. The President has said that the time is now for Guyana to develop on its own terms.

But the oil and gas sector is doing more than just making money. It is using the learnings of decades of experience in other jurisdictions to run a sector that is as sustainable as it gets. The world needs oil to power the transition, and other jurisdictions that produce the resource should take pointers from Guyana.
The Liza Unity floating production, storage and offloading (FPSO) vessel is one such aspect of the Guyana story that has established a model for others.

The vessel was the first in the world to be awarded the SUSTAIN-1 notation by the leading classification society American Bureau of Shipping (ABS). This means it has been recognised for its alignment with key elements of the United Nations’ Sustainable Development Goals (SDGs). All of the following Guyana FPSOs are expected to follow its direction.

Norwegian energy analytics firm, Rystad Energy, has said the emissions intensity from Guyana’s offshore oil production operations are among the best performing in the world, outpacing 75% of global oil and gas producing assets. This means that as oil and gas jurisdictions around the world close shop in the years to come, countries like Guyana have more leverage to remain as the last producers.
Guyana’s approach to leveraging its oil resources demonstrates that a balanced and responsible energy transition is possible. The local model may well serve as a blueprint for other nations navigating a difficult path to a green future.