Just on eve of the APNU taking power here in Guyana, oil was found in commercial quantities. It is one of the largest finds in recent times. Understandably the new regime is ecstatic at this find. Indeed, they seem to be thinking that this is the answer to all our problems.
This find is most likely one factor that has influenced their decision in relation to the sugar industry. The old attitude to sugar workers re-surfaced. They have announced that they are closing several estates. The intention is to shut the whole industry down. This decision to close the industry was taken even though the Commission of Inquiry (CoI) that they set up did not recommend any closure. It is clear that they believe that oil will more than compensate for the loss of revenue from the closed sugar industry. They, therefore, decided to abandon the plan to re-structure and re-vitalize the industry. This will prove to be a colossal mistake, one from which Guyanese will suffer great pain both now and in the future.
If you look around the world you will find that countries which are very heavily dependent on oil are going through great economic difficulties. Some have major political problems as well because of the hardship flowing from loss of oil revenues. We don’t have to look very far to prove this. A Caribbean Development Bank senior economist, just released an opinion in which grave concerns were expressed about the economic difficulties that Trinidad and Tobago is experiencing because of the fall in oil revenues. Venezuela’s economy is also in some crisis mainly due to the fall of oil prices. In that country economic difficulties have led to a dangerous political situation. Further afield, even though to a lesser extent, Russia’s economic problems are also traceable to the fall in oil revenues. There are many other examples.
It is not likely that the price of oil will reach the heights it did in the 1970s in the future. Since the oil crisis in the 1970s, countries have been searching for alternative sources of energy. In the post oil crisis period another huge problem has arisen that has forced the best minds in the world to deal with it. That is the problem of climate change; all the evidence is there to prove that our climate is changing rapidly. This is mainly caused by the heavy dependence on fossil fuel. If nothing is done the world can experience more and more catastrophic disasters. This has fuelled the search for alternative energy.
Indeed, scientists have gone a far way to finding alternative energy. Solar, wind, bio-fuels have all made considerable strides, and are poised to replace fossil fuel as the most used product to generate energy for our industries and transportation, etc.
One of the main obstacles to the commercial uses of alternative energy is now being overcome. That obstacle was the development of batteries to store large quantities of energy. Our scientists have now developed batteries to perform at the level needed by industries and transportation. It will be comparable to oil, keeping in mind that batteries are being improved all the time.
This means that oil is losing the strategic importance it once held, and to a lesser extent, it still holds. However, technology is moving so fast that it is predicted that by the year 2020, alternative fuels will become cheaper than oil. Many countries in Europe have been setting dates to stop producing vehicles powered by fossil fuels. France, for instance, has just announced its intention to stop the production of vehicles driven by fossil fuels by 2040.
Another development that suggests that alternative energy is going to largely replace oil is the fact that many big oil companies are investing heavily in companies that produce alternative energy. The reason for this is two-fold. On the one hand they have huge investments in fossil fuels and would like to ensure maximum returns for their capital. Therefore, one of the reasons is to slow down the growth of alternatives, to keep oil prices up. On the other hand, they are recognizing the inevitable and the need to stay ahead of the curve, so to speak.
While we must welcome the oil find and try to maximize our benefits, we must not lose sight of these facts. We can become a major player in alternative energy as well. Our potential in bio-fuels is significant. Sugar offers us the best opportunity in this regard. Already we have sunken capital in the industry and that will give us a strategic advantage. With sugar at the base, we can also develop alternative energy using rice, coconuts, soya, and other crops.
President Granger has professed a commitment to a green economy. He is on the right side of history in his pronouncement. However, it is hard to see how he will succeed in building a green economy when he has abandoned the Amaila Falls Hydro Project and is now devastating the sugar industry, both of which could go a far way in reducing our carbon footprint.
It is still not too late to prevent this inevitable hardship that the closure of estates would cause.
President Granger has an opportunity to reverse this ill-advised position. We can be both a major player in oil and in alternative energy. Let’s grab the moment. Do not squander our future.
We could avoid this colossal mistake by not closing the sugar estates.