Getting the work done

Every Man, Woman and Child Must Become Oil-Minded (Part 53)

 

Introduction

Surprise would be a mild word to describe the reaction of many Guyanese to the report by Minister of State Joseph Harmon that President Granger had appointed Dr. Mark Bynoe to head the Department of Energy in the Ministry of the Presidency. Dr. Bynoe was identified in a 2017 news report in Caribbean Climate, a regional climate change blog as a senior environment and resource economist with the Belize-based Caribbean Community Climate Change Centre (CCCCC).

The CCCCC helps countries develop Green Climate Fund programmes and projects and acts as a vehicle for the dissemination of relevant information to help the Green Climate Fund process and to help countries development priority programmes and projects under the Fund. Dr. Bynoe was particularly involved in a project in Belize to assist residents of Trio Village in combating the effects of climate related events such as deforestation due to lack of water, insufficient arable land and forest fires which threatened crops.

It seems a transformational change for Dr. Bynoe to move from a job in which it was all about mitigating the effects of climate change to a sector which is a major polluter and contributor to climate change. It is not clear how the President arrived at his pick, what inquiries he made of persons who know and have worked with Dr. Bynoe, or his attitude to the extractive industry in general or the petroleum sector in particular, and his views on how the sector ought to be regulated.

To have arrived at a decision without the benefit of such a process would be considered human resource heresy on the part of the President while for Dr. Bynoe, the transition will require an epiphany of biblical proportion. 

Handpicked

Dr. Bynoe was reported as having been handpicked by the President even as a committee of five senior Ministers were tasked with recruiting a world-class professional in the petroleum sector. Speaking to the media two days after Harmon’s announcement, President Granger is reported in the online Demerara Waves as saying that Dr. Bynoe would be responsible for “mobilising experts to manage the industry.”

The President identified as tasks to be completed in the next two months by the Department and Dr. Bynoe to include advertising “all over the world” for experts, drafting of legislation, looking at financing and the operationalisation of the department. The reports did not disclose the nature of the financing or the legislation to be drafted which only fuels the guessing game and the suggestion that at the highest level, the Government is finding it extremely difficult in handling the sector. With no apparent connection with or in the petroleum sector and few persons in the Government with any experience or expertise to assist him, it is difficult to see how Dr. Bynoe will be able to lead and achieve these objectives within the timeframe identified. .

Trial and error

The President has stated that Dr. Bynoe would be responsible for mobilising experts to manage the industry. Not only is this confusing but raises the question whether this was the considered view of the President reduced to writing or simply some inelegantly expressed thoughts from him to respond to the media.

Trial and error is not a good idea in the most benign circumstances and the President and Cabinet should understand that they need to foster confidence in the public that they are capable of making rational, coherent decisions on this sector. It is estimated that with all things being equal, with no Dutch Disease and no resource curse, oil and ExxonMobil will soon come to define the country. The risks in such a situation are considerable and only the best thought out plans properly executed will ensure that present and future Guyanese can benefit from the petroleum sector. 

Structure

In so far as structures are concerned, it is obvious that a department is not a statutory body or a legal entity capable of acting on its own, of owning property, of entering into contracts and agreements or bringing and enforcing charges against persons. To assign it responsibility for the management of the industry therefore would require an elaboration of what “management” in this context means and whether the President really meant regulation of the industry.

What has been clear since the May 2015 announcement by ExxonMobil of the oil discovery is that the Government is desperately in need of sound advice and it is not clear whether Dr. Bynoe’s department will have as one of its functions, in addition to responsibility for the management of the industry, the provision of advice to the political directorate which in turn will articulate policies and give directions to the Department.

With this announcement, the government structure for the energy sector will now comprise the Department of Energy in the Ministry of the Presidency, the Ministry of Natural Resources, the Guyana Energy Authority and the Petroleum Unit of the Guyana Geology and Mines Commission.  Expected to come before long is the Petroleum Commission for which a Bill has been prepared and tabled in the National Assembly. The name of the Department suggests that the scope of its responsibility is more than petroleum and would include energy from both renewable and non-renewable sources. On the other hand, everything the President has said suggests that its primary area of responsibility is the petroleum sector. 

According to the President, one of the functions of the Department of Energy will be to decide on granting oil concessions and licences. This overlaps or rather conflicts with the Petroleum Commission Bill whose functions will include:

“(a) review and recommend to the Minister for approval, amendment or rejection the plans, proposals, reports, analyses, data and any other information submitted by an applicant or operator in support of an application for the granting or renewal of a petroleum prospecting licence or a petroleum production licence; and

“(b) when required by the Minister, manage bid rounds for the grant of licences.”

Clearly, “Minister” in this context can no longer be Minister Raphael Trotman who will now be freed of any responsibility for petroleum. As the Department of Energy falls under the Ministry of the Presidency, ministerial responsibility for the Department can fall under the President or Mr. Harmon while parliamentary responsibility for the Department will go to Mr. Harmon. Alternatively, both responsibilities can be vested in Mr. Harmon, extending his already extensive portfolio. 

However it turns out, or does not turn out, the announcement of the appointment of Dr. Bynoe raises a host of questions about himself as well as about the framework in which he will operate. The road is becoming unduly bumpy as we head to First Oil and the President’s decision has raised as many questions as answers. That is not reassuring.

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