Co-Director of Energy Practice at America’s Market Intelligence (AMI), Arthur Deakin believes new oil producer Guyana could pave a low carbon path for its oil and gas sector with the help of ExxonMobil’s carbon-capturing utilizing and storage technology (CCUS), and implementation of a carbon tax.
In one of Deakin’s recent commentaries titled, “A two-fold approach to lower emissions in Guyana: Exxon’s carbon capture strategy and a potential government carbon tax,” he noted that CCUS technology is the cheapest and most advanced option for reducing emissions in heavy industries. CCUS is the term coined to define the process of capturing carbon dioxide (CO2) that would otherwise be released into the atmosphere from industrial activity and injecting it into deep geologic formations for safe, secure, and permanent storage.
Deakin then noted the extensive work ExxonMobil has done on this front. He said in February 2021, Exxon had launched a new venture aimed at commercializing its low-carbon technology portfolio. Through this venture named Low Carbon Solutions, he highlighted that Exxon is advancing plans for more than 20 new carbon capture and storage opportunities around the world to enable large-scale emission reductions. The company plans to invest US$3 billion on lower-emission energy solutions through 2025.
Exxon, he pointed out, is also seeking to build a U$100 billion carbon capture hub in the Houston shipyard, where it will remove carbon emissions at about one-fourth to one-half of the price it takes for electric vehicles to do so.
Against this background, Deakin said Exxon should use its expertise in the CCUS space to pave a low-carbon path for the development of Guyana’s oil and gas sector. Along with this, he recommended that the Guyanese government should implement an attractive carbon pricing framework to provide market certainty.
A carbon tax would be beneficial for Guyana, Deakin wrote while adding that this tax would have to be properly studied. He went on to say that a carbon tax would also have to be accompanied by a holistic set of climate policies if environmental damages are to be fully mitigated while simultaneously allowing for the growth of the country’s energy sector.
With this two-pronged public-private approach, Deakin said Guyana will hopefully serve as a successful example for other emerging oil and gas economies.