Thursday, June 1, 2023

Gas pipeline could deliver huge benefits to hinterland communities, says int’l economist

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Former Director of Economics at the Caribbean Development Bank, Dr. Justin Ram, said it has been observed in the past that the commercialization of mineral resources has not resulted in the kind of “broad-based” benefit across the Guyanese population, that some have hoped for. But where the Gas-to-Energy project is concerned, he believes a renewed and greater opportunity is presented for this “broad-based” economic benefit, including for the upliftment of residents of hinterland communities.

He made the comments during a webinar hosted by the Guyana Business Journal and Caribbean Policy Consortium, on Tuesday.

Dr. Ram, who has 25 years of international experience in practice, research, development, and management in various economics disciplines, produced a white paper which examines the impacts of the upcoming project on Guyana.

“This gas-to-power project must benefit the most deprived populations living in the hinterland and rural communities,” the economist said, in a presentation on his study.

“So, it is either that the grid is going to be extended out into those communities or perhaps the savings, the overall economic savings that this gas-to-power project is likely to provide certainly for communities along the shoreline will generate savings for the government which can then be invested in supplying proper electricity at a more reliable and lower cost for hinterland and rural communities,” he said.

Whatever the approach, Ram urged, hinterland and rural communities must also benefit from this project. This is one of several recommendations he made, to ensure the success of bringing gas to shore.

The economist also recommended that the project be married with adequate grid infrastructure, as part of an overarching policy framework which supports the expansion of electricity so that everyone can benefit.

Consistent with this recommendation is government’s plan to upgrade its grid infrastructure with a stabler smart grid, according to statements from Vice President Dr. Bharrat Jagdeo. In the next few years, government sees this as critical because it expects its electricity demand to triple.

President Dr. Mohamed Irfaan Ali said last year that the natural gas project will be the first of an energy mix of 500 megawatts (MW).

Natural gas should be considered as a bridge to a low carbon future, Dr. Ram said. This is also consistent with the government’s vision. Ram said it is not a substitute for renewables, but that it should be seen as a bridge that continues Guyana’s development while those are being developed.

The landmark project is expected to provide 250 MW of power to meet Guyana’s domestic demand, natural gas by-products to supply other industries, and excess gas to supply the country’s neighbours. Construction of facilities for the gas-to-energy project is expected to begin later this year, with commissioning scheduled for late 2024.

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