By Mark DaCosta- In this second part of our series on this issue, we delve into the substantial criticisms and concerns surrounding the People’s Progressive Party’s (PPP) massive Gas-to-Energy project, bringing to light the concerns raised by both reputable international organisations and knowledgeable local experts.
The internationally recognised Institute for Energy Economics and Financial Analysis (IEEFA) argues – in a comprehensive analysis – that the Gas-to-Energy project will result in an overbuilt electrical system, with a new natural gas plant generating more electricity than necessary. ExxonMobil is positioned to gain significantly from the project, reaping huge profits from pipeline construction, lending money to Guyana, and selling natural gas. This critique raises questions about the project’s efficiency and whether the PPP regime prioritises the interests of foreign corporations over those of the Guyanese people.
The widely respected IEEFA further contends that the project will burden Guyana Power & Light (GPL) with substantial debt, jeopardising the already precarious situation of the electric utility. The new debt incurred may necessitate government intervention to bail out GPL, potentially compromising Guyana’s fiscal stability in the future. This criticism challenges the financial sustainability of the Gas-to-Energy initiative, urging a reevaluation of the economic implications for our children and grandchildren.
The IEEFA analysis offers some insights into the financial aspects, estimating a capital investment of approximately US$2 billion. It highlights concerns about undisclosed contractual details, costs, and potential risks, emphasising the need for greater transparency in financial matters.
Despite Guyana’s pledge to transition to 100 percent renewable energy, IEEFA argues that the Gas-to-Energy project, reliant on natural gas, will hinder solar expansion. This raises concerns about the PPP government’s commitment to environmental sustainability and whether the project aligns with Guyana’s stated climate goals. In other words, the PPP regime is saying one thing and doing the opposite thing. The critique emphasises the need for coherent energy strategies that place renewable sources over fossil fuels. It also raises alarming questions about the honesty, sincerity, and real intentions of the Irfaan Ali regime.
Economist Ramon Gaskin, a transparency advocate, highlights the government’s reluctance to address critical questions regarding the Gas-to-Energy project. Gaskin’s concerns extend to the legality of the project, asserting that its magnitude requires parliamentary approval. He plans legal action to challenge the project’s economic viability and the government’s adherence to legal processes, signaling potential legal hurdles for the initiative.
Ramon Gaskin said, “The gas-to-shore project is a big project where billions of US-dollars are involved, and it may even be the biggest project ever done in this country. It will bankrupt this economy.”
Environmental lawyer Melinda Janki challenges the Environmental Protection Agency’s (EPA) decision to exempt the 300-megawatt natural gas-fired power plant from an impact study. Janki deems the exemption unlawful, citing breaches of environmental regulations and a lack of transparency. Her perspective underscores the need for thorough environmental assessments and adherence to regulatory processes.
Melinda Janki said that, “The agency’s decision to exempt the gas plant project from an environmental impact assessment is unlawful…”
Ms. Janki emphasises the economic impact of the Gas-to-Energy project on the country, underscoring Gaskin’s questions about the project’s cost-effectiveness, comparing it to existing power generation methods. Additionally, concerns arise about the equitable distribution of benefits, with skepticism about whether the promised, unbelievable 50 percent reduction in electricity costs will genuinely reach ordinary citizens, if it is realised at all.
In light of Guyana’s past challenges with mega projects such as the failed Skeldon Sugar Factory, the undersea cable, and Amaila hydroelectric project – with the Fip Motilal fiasco – questions arise about the Bharat Jagdeo party’s capacity to undertake a project of this magnitude. The history of failed projects raises doubts about the PPP government’s ability to effectively manage and implement any large-scale initiative.
The criticisms surrounding the PPP’s Gas-to-Energy project raise valid concerns about its economic viability, environmental impact, and transparency. As the world enters a new phase in our energy future, addressing these criticisms becomes imperative to ensure responsible governance, sustainable development, and the well-being of the nation.
