Guyana’s Vice President, Dr. Bharrat Jagdeo is of the view that the South American country has already met net-zero status in the global efforts to reduce emissions.
“In Guyana’s case, because of our huge forest, we are already at net-zero…because our forest serves as a huge carbon sink to the world,” the VP said. “So, in terms of global responsibility, I think Guyana pays more than its fair share in terms of the effort to achieve 1.5 [degrees celsius] although we are not responsible historically for the current level of CO2e gases which is causing global warming.”
With that in mind, he is of the view that the country has ample time to capitalize on the exploitation of its light, sweet, cheap-to-produce crude, to transform its economy. The former President proffered this position in an exclusive interview with OilNOW.
The Vice President was at the time responding to a proposal in a recent report by the International Energy Agency (IEA) to have no new fossil fuel developments, in order to effectively tackle global warming. The IEA’s ‘Net-Zero by 2050’ report outlines a strategy to limit the global temperature increase to 1.5 Degrees Celsius, above pre-industrial levels by 2050.
The IEA Executive Director, Fatih Birol, would later go on to discuss the report in a May 22 LinkedIn article, during which he said, “Our Roadmap sets out a pathway to net zero by 2050. We do not claim it is the only one. Different countries are in very different places on the path to net-zero, and each will chart its own course.”
In this regard, Mr. Jagdeo explained the rationale behind the Guyana government’s position. “Now we have to look to the future and as the IEA said there are technologies that have to be developed to use nitrogen as a fuel source and that is still in its experimental stage and it would require large scale investments in other renewables to get us where we have to go and in the meantime, the world still has to run and it will be run significantly on fossil fuel until those major transformations take place.”
The Government he said, sees the world continuing to have demand for fossil fuels for the next two decades at minimum. The VP also said that many projects around the world are on the higher end when it comes to the cost of production and pollution because the crude being extracted is heavy and sour.
“So, as the industries become more competitive, the natural thing to happen would be to push fossil fuel out of production in those countries with high production costs. But there will still be a demand for fossil fuel and so that’s where Guyana comes in,” he said.
Guyana’s multi-billion-barrel oil resources carry low breakeven prices making the new oil producing country a very competitive investment destination. Chief Financial Officer at Hess Corporation, John Rielly last year described Liza Phase 2, slated for first oil in 2022, as arguably the best in the industry.
“And that is why I believe investments will continue to be made because of what is happening globally and that is why Exxon and others are looking to Guyana in a major way because doing business here allows them to be competitive as long as fossil fuel demand exists and it is less polluting,” Mr. Jagdeo said.
Furthermore, the Vice President said that Guyana has a unique opportunity to make and utilize the money earned from oil during the world’s transitional period to renewables and invest in a range of industries including health care, infrastructure, and even renewables to enable its own energy transition. He posited that this would ensure Guyanese can enjoy an improved and decent standard of living when fossil fuels are completely phased out.