While the pursuit of a gas-to-shore project in four years is already hailed for its potential to significantly reduce energy costs, it would also be in keeping with Guyana’s goal for a green economy. In fact, the transition to gas production would actually prepare the oil producing State for the use of other cleaner sources of energy such as solar and hydro. This much was said and agreed to among experts who appeared on OilNOW TV’s inaugural webinar which examined the project’s environmental impact, financing models that could be used, and other spin-off benefits.
The programme which was moderated by Content Manager at OilNOW, Chris Chapwanya, saw insightful contributions from Arthur Deakin, Co-Director of Energy at Americas Market intelligence; Joel Bhagwandin, Financial Analyst at JB Consultancy and Associates; and Roger Kranenburg, Vice President of Energy Strategy and Policy at Eversource Energy.
Kranenburg was keen to note that “gas is completely and wholly consistent with planning for an environmentally sensitive future.” Further to this, The Vice President at Eversource shared that gas is actually very complementary with future plans to transition to solar energy and would even help the country prepare to absorb other types of renewables. Be that as it may, he said it is important for one to examine the local and environmental impact while noting that the companies which are involved with the realization of the project must be held accountable for their respective roles.
In agreement with points shared by Kranenburg, AMI’s Co-Director of Energy Practice, Arthur Deakin was quick to point out that a country cannot move straight from heavy oil to renewables.
“You don’t have the infrastructure to support that and you don’t even have the generation assets in terms of solar and wind, ready to deploy enough energy to stay in the grid. So, having the gas is essential to have that firm base,” the analyst stated.
Deakin said the benefits of cost reduction on electricity bills, a reliable energy network, and the overall competitiveness that Guyana will realize from this project really do outweigh any presumed negative effects.
Pivoting off of Deakin’s mention of reliability, Kranenburg emphasized that this is a benefit that should not be taken or seen lightly as he noted that in a first world economy, reliability is paramount.
In this regard he added, “In New England we have some of the highest electricity rates than in the US…but this is just some rough numbers from the Bureau of Economic Analysis. For every dollar businesses spend on electricity, they get 100 to 150 x economic value out of it; so what that means is reliability is paramount.”
Financial Analyst, Joel Bhagwandin, who has been a staunch supporter in Guyana for the project, shared that while his previous analysis did not consider the costs of the project’s environmental impact, he does agree that it is an important factor to be considered. He reminded however that the government has already initiated studies towards this end.
With respect to the financial aspect of the project, he recalled that Vice President, Dr. Bharrat Jagdeo would have said that the rough estimate for the project’s pipeline would be somewhere in the vicinity of US$500 to US$800M. But Dr. Jagdeo had also said that the true cost of the project would only be known when it goes to tender. In the interim, Bhagwandin believes that overall, it could be as much as US$1.1B.