The President and energy security

Dear Editor,
Having already addressed the President’s food security challenge highlighted in his purportedly last address to the UN last Thursday, I now turn my attention to his energy security reference. The President reportedly noted and then asked, “[The world] is likely to demand 36% more energy by 2035. How do we generate the energy needed to meet this demand in a way that helps people everywhere to develop, and does not choke off economic growth through high prices caused by energy scarcity?” As a Soviet-educated economist, this was his unique opportunity to answer his own question with at least a couple of suggestions or by telling the world body what Guyana has been doing under his presidency with impressive results.

He couldn’t because his rhetoric does not match up with his reality. Almost every international institution knows that Guyana is one of the poorest countries in South America, despite government’s boasts of strong economic growth and stability, and for a poor country, Guyana’s fuel bill is extraordinarily high. On the website, Caribbean Construction Digest, of July 22, 2011, there is a news article attributed to GINA, with the caption, ‘Guyana hydro-power construction likely to start by year-end.‘ It noted that Guyana’s fuel import bill is US$350M, and that the President has said that the development of renewable energy sources is needed to increase energy security and maintain macro-economic stability. Separately, according to the Guyana Energy Agency, in 2008, the amount of foreign currency expended to import fossil-based energy sources was about 43% of the country’s declared official Gross Domestic Product (GDP). With such a high bill, talking about reducing that amount is different from actually doing something that reduces it, and government’s bungled approach to the AFHEP says a lot about how far apart the President’s rhetoric on energy security is from his reality.

Editor, it is an established fact that Guyana sits on oil and is surrounded by oil, yet Guyana is being left out of the windfall of high oil prices. We are literal consumers, not literal producers. To our west, Venezuela has oil, and is the world’s 9th largest oil producer. To our east, according to the US State Department, Suriname’s economy has been dominated by the exports of gold and oil, and to a lesser extent, alumina. To our south, Brazil is the world’s 13th largest producer of oil. Even a little farther east, French Guiana, earlier this month, announced news that Tullow had found oil in that country. Guyana has oil. The problem is that we have never had the right type of government in Georgetown that would ally itself with nations capable of helping us defend our energy development aspirations. We seemed to be cursed with the types of regimes – from Cheddi Jagan and his communism, to Forbes Burnham and his socialism, to Bharrat Jagdeo and his anti-Americanism – that some of our neighbours think it is okay to ‘tek dem eyes and pass we.’

Venezuela has traditionally objected to development projects both on land and offshore Essequibo, and Hugo Chávez indicated during his February 2004 visit to Guyana that although Venezuela would not oppose certain kinds of project for the development of the people, there were others it would oppose. With that, what good is the North West region to Guyana if we cannot develop it?

Then while the Canadian firm, CGX, was about to begin oil exploration in June 2000 in Guyana waters which Suriname claimed, Surinamese gunboats expelled the CGX rig. And even though an UNCLOS ruling seven years later favoured Guyana, this much was obvious: Guyana’s energy development agenda is under threat from external aggression and needs a strong defence.  Guyana‘s Jagdeo has close relations with his ‘brother,’ Venezuela’s Chavez, and Guyana is an importer of Venezuelan oil under PetroCaribe.  So, it hardly matters when the Jagdeo government talks about oil exploration projects or making progress on the proposed 140MW-154MW Amaila Falls Hydro Electric Project slated for operation by 2015 or even about energy security. The fact is, the President has no idea about what it will really take to make Guyana a true energy player, and so no world leader will take this President seriously when he asks the question about how to generate energy, and he cannot answer it.

Yours faithfully,
Emile Mervin