Blinded perhaps by the headlights into which we glare directly and which, perhaps, cause us to see only the ‘bright side’ of the oil & gas story arising out of ExxonMobil’s huge and still growing oil finds offshore Guyana, there is every likelihood that we are inclined not to look too far beyond those prospects that have to do with our years of waiting for our oil ‘miracle.’
If, however, we were to peruse the bigger picture we are likely to discover a somewhat more worrisome scenario. As far as Guyanese are concerned ExxonMobil is diligently recovering and exporting the country’s offshore oil deposits, and we are well on our way to the other end of our rags to riches story. These days, however, the ‘whole story’ includes an escalating pushback against fossil fuels and by extension, against oil exploration and recovery pursuits.
Nor is the environmental lobby targeting oil confined to noisy fringe groups of clean-air converts whose ranting amounts to no more than an irritating distraction. These days, the anti-fossil fuel furore has been enjoined by much larger numbers of individuals, influential and enlightened pressure groups and globally influential international organisations. Perhaps even more significant is the wall of corporate support as the fight against fossil fuels continues. These days, finally worn down, oil company executives are beginning to concede that their efforts to roll back the tide of the environmental lobby are now pointless. Their pronouncements do not come in the form of tongue-in-cheek utterances about the need for more responsible oil & gas recovery pursuits. Rather, they are now accepting openly, the long-existing evidence that there exists unchallengeable evidence of a growing oil & gas-related environmental footprint that is now visibly apparent. Accordingly, they concede that it would be foolhardy to allow that footprint to extend itself further and faster than the rate at which it is travelling at this time.
The immediate relevance of all this to Guyana reposes in the fact that a great deal of the climate change ‘heat’ is targeting the US company, ExxonMobil, the entity that is now engrossed in what is currently one of the world’s biggest oil recovery exercises, offshore Guyana. ExxonMobil’s current oil recovery pursuits offshore Guyana is intrinsically linked to the country’s extrication from its condition of persistent poverty, so that like it or not and environmental considerations notwithstanding, the future of fossil fuels is a matter of earth-shattering importance to Guyana.
Last Sunday’s Bloomberg Green article – “A Tale of Two Oil Giants With Two Strategies That Aren’t Working” – alludes to the less than comfortable circumstance in which Exxon and Chevron, two of America’s giants in the fossil fuel recovery industry are enduring on account of what, in recent years, has been a significantly ramped up global hostility against the oil & gas industry.
The Bloomberg Green article alludes to what it says were, in 2019, the two companies’ “worst results in years.” But that is not all. Exxon and Chevron, the article says, have also become “lightning rods in the backlash against fossil fuels.” As the global lobby, which these days, has now been fully enjoined by the United Nations and other international organisations, intensifies, much of the high-browed bombast associated with the pronouncements of oil industry and banking CEO’s has disappeared.
These days, there may be a much greater willingness on the part of the oil majors to listen to the environmental arguments, to be more mindful of the polluting effects of their pursuits. There is, as well, evidence of a preparedness on the part of the oil giants to pour some of its own millions into various environmental causes aimed at rolling back climate change.
For all that, the oil majors’ battle to continue their oil recovery pursuits are, these days, confronted with growing numbers of frowning faces from amongst some of their once staunchest allies. “Commercial banks,” the Bloomberg Green article says, are now beginning to don the attire of “climate warriors.”
The posture of central banks has been revealing. Responding to what Bloomberg Green says has been “a growing body of research… (suggesting) … that climate change poses the greatest long-run threat to the global economy – including inflation and financial stability, which central banks oversee,” the banks are beginning to assume an increasingly militant anti-fossil fuel posture. It is a posture which has reportedly been steadily gathering a head of steam ever since the 2015 pronouncement by the then outgoing Bank of England Governor Mark Carney about what he alluded to at the time as the “tragedy” of climate change. Carney’s position, interestingly, was reportedly underlined by the argument that the continued climate challenge posed by fossil fuels could even inflict serious damage on conventional business interests. Out of that initiative was created an organisation known as the Network for Greening the Financial System, a group that reportedly numbers about 50 central banks and related groups that ventilate “research and potential policy solutions.” Last year the group created a set of guidelines that advocated the pricing in of “climate change risk when regulating financial companies and to invest with sustainability goals in mind for their own portfolios.” The fact that central banks are now intimately involved in discussing and taking assertive positions with respect to the fossil fuel climate change challenge, is, of course, of huge significance to the sector.
Over time, the banks may have been slow in stepping up to the tape insofar as the global environmental lobby is concerned, but in recent years there has been movement. Reports indicate that even the state-run People’s Bank of China, now provides direct investment in sustainable projects, encourages and curbs loans to polluters. At the end of last year the Bank of Canada announced the financing of a research initiative on climate change. Last year, Sweden’s Central Bank reportedly disposed of some of its Canadian and Australian provincial bonds, intending, it seems, to signal Sweden’s uneasiness with those countries’ reliance on the production of fossil fuels. Even the US Federal Reserve and the European Central Bank are beginning to have serious conversations about climate change and their own policy positions, according to reports.
Interestingly, the timing of Guyana’s oil discovery and exploitation pursuits coincides with the Granger administration’s increased vocal advocacy of its pursuit of the “greening” of the Guyana economy. The question that arises here, of course, is whether the official advocacy of a green economy, on the one hand and the high dependence on the returns from one of the most globally significant oil finds, on the other, does not create something of a challenge (to say the least) for Guyana.
The current preoccupation at all of the various levels of the society is with the varied and often contentious discourses that arise out of, first, whether or not the country is getting the best deal out of the contractual agreements that it has concluded, secondly, ‘counting the money’ that will (or should) derive from oil and thirdly, the fashioning of a development plan that will ensure that the benefits accruing from the oil & gas sector have a transformational effect for the country as a whole rather than largely for those who control the levers of power.
Guyana, however, cannot dictate the pace at which the ‘climate warriors’ advance their lobby and sooner or later it is likely that the tide of that advance will challenge us to fashion policy positions that are in step with global climate change pressures on the one hand and the developmental imperatives of the country, on the other. Creating a policy that can maturely address both sets of considerations could prove to be the country’s most formidable ‘oil & gas challenge’ that it may have to face.
