A week ago, ExxonMobil upped its running total for Guyanese oil finds to ten billion barrels. That’s more oil per person than any country except Kuwait. By August, they had accumulated US$436 million in their sovereign wealth fund, all since the start of last year.
ExxonMobil aims to pump 800,000 barrels a day offshore Guyana by 2025, fourteen times what Trinidad and Tobago produced last year. Guyana will spew more oil per person than any other country, even Kuwait.
Meanwhile, we’re headed for a climate crisis. Worldwide temperatures are already more than one degree above the pre-industrial average. That’s enough to bring the Caribbean intense droughts, powerful hurricanes and rising sea levels.
It’s enough for bush fires to roar through Australia and the US, for temperatures nudging 50 degrees in Turkey, for melt water covering 40 per cent of the Greenland ice cap.
The International Energy Agency, the UN and the Inter-governmental Panel on Climate Change want oil and gas exploration and development to halt from this year.
But Guyana and Suriname say their rain forests are soaking up carbon on land, so they should be allowed to push ahead freely with their soaring offshore oil expansion.
Two weeks tomorrow, the COP26 climate conference opens in Glasgow. It’s the 26th held since 1992 under the UN Framework Convention on Climate Change.
Six years ago, COP21 in Paris asked countries to set “nationally determined contributions” limiting global heating to “well below” two degrees, and if possible to 1.5 degrees. But collectively, they came up with targets which would bring heating to almost three degrees—and that’s if everyone keeps their promises. A climate shock like that would spell worldwide disaster. There’s a whole lot of uncertainty in extrapolating weather impact from policy statements, but the broad lines are clear.
So, where does that leave Guyana?
Guyana is ultra-vulnerable. It won’t take much sea level rise to flood Georgetown and the coastlands where 90 per cent of its people live. The interior rain forest is an extension of Amazonia, which is close a tipping-point transition from lush woodland to parched savanna. Guyana’s coalition government, which lost power last year, proposed to cut carbon emissions to zero by 2025—but did not say how.
Irfaan Ali’s current administration proposes an ambitious 50-per cent cut. Electricity generation would shift from high-carbon fuel oil to natural gas and hydro-electric power. Guyana has banked US$84 million from Norway for not chopping down the rain forest. That cash would be used for solar power.
But the gas plant needs a 200-kilometre pipeline, the hydro plant is still at request-for-proposals stage, and there is no long-term river-flow data. The solar projects are just a wish list. There’s a lot to get done in four years.
And then, there’s the small matter of those ten billion barrels. On standard carbon accounting procedures, crude oil exports don’t count towards carbon emissions. They are charged to the country where the oil is consumed. So Guyana can have a squeaky-green target carbon while still pumping.
For T&T, it works the other way. Natural gas is processed into petrochemicals, whose end users are elsewhere. T&T’s per capita carbon emissions have been among the half-dozen highest in the world.
But they’re on the way down for good reasons and bad. They’re reduced every time a petrochemicals plant goes on shutdown. More sustainably, they will be cut by removing those free-handed subsidies which encourage wasteful usage of gasoline, diesel and electricity.
How will the energy markets react if oil producers keep pumping while some big users switch to renewables?
Market chaos with unpredictable price swings is one possibility. In which case, we have a taste right now as the post-Covid-19 recovery prompts a spike in demand.
Oil prices are back over US$80. Colm Imbert is laughing.
Europe’s wholesale electricity prices have doubled this year. Gas prices in ill-prepared Britain have risen fourfold in 12 months, prompting chemical plant shutdowns and—weirdly—a carbon dioxide shortage where it’s needed for food and drink industries.
The response is not climate-friendly.
China—source of almost 30 per cent of the world’s carbon emissions—is burning more coal and now plans more coal-fired power plants. Coal-based electricity produces twice as much carbon as natural gas generation.
China proposes to keep increasing its carbon output until 2030, then go carbon-neutral by 2060—a comfortably distant end-date.
In the US, Biden has pledged to move faster, cutting emissions to around half their 2005 level by 2030. Getting that plan through Congress will be a challenge.
A good result from COP26 depends on trust, smooth forward planning and international cooperation. Politicians need to offend powerful lobbies in their own countries—as T&T has by cutting fuel subsidies.
Hosting COP26 is Britain’s Boris Johnson. He promises “the turning point for humanity”.
Meanwhile, he wants to tear up an agreement with Europe he signed less than two years ago. His former trusted adviser says Johnson never even intended to honour that deal. His government this year junked its long-standing overseas aid commitments. British offshore oil and gas investment continues, and a new coal mine is proposed.
Safe hands for a global crisis? Maybe not.
—Mark Wilson is an international journalist based in Port of Spain