Guyana’s President Dr. Irfaan Ali, has defended the energy policy of his administration amidst global challenges dismissing those whom he said speak on the virtues of climate change and the environment but are yet to develop a single policy that can be used to make the natural and national asset of a country a revenue earner.
“They can’t design anything for 80 percent of consumption,” Ali told the opening ceremony of the 2023 International Energy Conference and Expo being held under the theme “Harnessing Energy for Development”.
He told delegates at the four-day event that “if we are to achieve net zero by 2050, there is a set of required actions which need investment.
“The gap to achieve this is US$1.35 trillion for emerging and developing countries,” Ali told the estimated 1,200 delegates, adding “if we are going to reduce emissions we have to start from the highest form of emissions and that’s coal”.
He said in terms of renewable forms of energy it requires investment of US$11 billion in order to “realize the achievable renewable energy target.
“That is what CARICOM (Caribbean Community), we have committed ourselves to (and) to get to this target it requires investment of UIS$11 billion. Guess what the committed investments is so far,” he asked the delegates, telling them “you are just as I am, silent on the matter.
“Where is the US$11 billion coming from? Who is investing US$11 billion…why can’t we answer these questions,” Ali said, noting that while “we are in support and we are transiting to renewable, but where is the assessment”.
Ali said there were a number of regional prime ministers who have made a commitment on moving to electric vehicles (EVs) in the public transportation system.
“One prime minister told me I made the commitment and the next day I made a call to place an order for EVs and then they told me ten years down the line, maybe five years down the line. This is the reality.
“We can’t be pushed into an environment to make political commitments when in reality we cannot realize those targets, unless we are asked to continuously mislead the population,” he said, noting that his administration on coming to office in 2020 “immediately we re-assessed some targets that were committed to”.
He said in a “very frank and open way” the government made it known that “these are not targets that are achievable because we are nowhere close to building infrastructure to achieve the targets.
“Now how do we in this global environment get the capital that is required to move to renewables? We can’t get it by saying to the oil company you have to shut down in ten years or 20 years. We have all agreed that oil and gas, the shelf life is nowhere close to what some believe it is.
“So how do we sit around a table and say, listen if we have 70 years, 80 years in oil and gas how do we find a formula in which you will now rework your business model to stay sustainable after 70 years. How is it you can take some of your net profit and start investing in renewables?
“How is it you can help in the research and development to reduce your emission level,” he said, adding that this would require all stakeholders to be “around the table.
“You know there is a lot of talk about Guyana’s PSA (production sharing agreement) and recently I made the point that governments have to make decisions that are in the best interest of the country,” he said, telling the conference that his administration came into office and “met what we have said publicly is a one-sided agreement.
“But we have a responsibility to honour an agreement that was made. I spoke about the consequences of walking away,” he added.
In November last year, Guyana’s Vice President, Bharrat Jagdeo announced new fiscal terms as part of an updated model production sharing agreement. The government had indicated that new terms will not apply to the existing Stabroek Block agreement which has been heavily criticized as being too favorable to the ExxonMobil-led consortium operating offshore.
A ten percent royalty rate will head the new model agreement, up from the two percent granted to Exxon for the Stabroek Block. The 75 percent cost recovery ceiling has been lowered to 65 percent. The sharing of profits after cost recovery will remain 50/50 between government and contractor. And a corporate tax of ten percent will be instituted, where there was none before.
Jagdeo had explained then that while the old terms granted the government a 14.5 percent share at the start of production, the new terms increased this to 27.5 percent plus corporate tax.
CMC/
